How I won an iMac

Like most people, I always wondered what it's like to own a product prefixed with an "i", aka Apple product.  

However, the sensible, rational consumer in me refuses to bow down to their premium prices.  As it turns out later, I didn't need to pay a single cent for it.

This is the winning entry I submitted to the CPF Im$savvy "Are You Ready" Contest.   The prize: the very iMac I am now using to write my blog posts.   Strictly speaking, the prize was a MacBook Air.  I decided to change it to an iMac for the bigger screen.

Budget + Tracking = Cash Flow Management.   Simple.

The worse that one can do financially is nothing.

I can say this because more than 10 years ago, my husband and I were merely talking about being more financially savvy but we ahem well, just talked, and did nothing. The eureka moment came when I was attending a Basic Financial Management course as part of my job training. 

I couldn’t help but ask myself why I was learning how to read other people’s financial statements, and yet failed to set up one for the most important company I keep - our own household.

I decided to start small with a monthly expense spreadsheet. I rounded up all our monthly expenses, dividing them into the “fixed” and “variable” categories. 

In the former would be our monthly insurance premiums, allowances for parents, home loan installments etc; and in the latter, the nice-to-haves e.g. groceries, meals taken outside, books, personal grooming, travel etc.

The fixed expenses were easy enough, since we used GIRO and the billed amounts were reflected very clearly. 

For the variable expenses, I made it a point to religiously record big and small expenses for a few months, just to have a good idea of what and how much we spent on. A lot of people may balk at the idea of recording daily but I think the very exercise itself was revealing.

This very simple act of penning things down made me realize how much we were spending on a rather surprising expense category: food! We were eating out for lunches at work and on weekends too, as well as splurging on that cup of coffee with friends at Starbucks, which really made the food bill swell. 

I also kept all my receipts and that helped me recall the amounts easily. For this to work: Remember, don’t sweat the small stuff. It’s really just to get a general idea of which categories of expenses the money goes to on a monthly basis.

Armed with that, I was able to come up next with our Cash Flow and Budget spreadsheets, simply by plugging in our monthly incomes and any other sources of income we may have then, e.g. dividends from stock investments, as well as setting aside yearly amounts for the following categories: Fixed Expenses, Food, Personal Grooming, Children, Transport and Entertainment/Travel.

My husband and I decided we could aim to put aside at least 10-20% of our monthly income into a Goose Account, named after the goose in the famous Aesop’s Fable.  “Never ever kill the goose that lays the golden egg” – so every dollar that goes into the Goose Account can only be used for investments and absolutely nothing else. 

We still keep that Goose Account till today and I’m glad we did it because it gave us the confidence to invest when markets were low, taking advantage of low price conditions.

Needless to say, some people around me were surprised at my new spending and tracking habits. I even inspired one of my colleagues to do the same. She was still paying off debt from her university days even though she had already begun working for a few years. 

Judging from her rather spendthrift ways, I didn’t think she would last but to my very pleasant surprise, she came up to me one day and announced she managed to pay off all her university loans! All because she had begun to track her expenses and become more aware of how she was managing her cashflow! I was elated for her. If it could work for her, think of what it could do for me!

This simple but powerful habit has helped me in many other areas of my life. It helped us make better decisions on whether to upgrade to a new car or stay with a used one, remain in our HDB flat or buy a private property, and whether I could quit my job and work part-time at home to take care of the children. 

For the past 10 years, I have kept to this habit and have taken on the role of “Financial Accountant” in our household. Till this day, I still email our monthly “Net Worth” chart to my husband, and using that chart, we discuss our future financial goals and investments.

And to think – it all started because I simply wanted to know how much we were spending!


Popular Posts