Entry 54

How I saved $20,000 in 3 years?

Just like any other teenager, I started working after my O levels ended. A hefty sum of $1500 was received from my part time jobs. $1500 to a 16 year old kid at that time was a huge sum.

However, poor money management led to all the money being spent just 1 month before my polytechnic term started.

Looking back, I was glad I made that mistake. Since then, I promise to instill the right money habits. I have religiously abided to these rules which allowed me to save $20,000 at the end of my 3 years here.

1) TRACK YOUR LAST MONTH’S SPENDING PATTERNS

Right from the start, I analysed my spending patterns, variable expenses and fixed expenses.

Fixed expenses remain the same every month (e.g. Hand Phone Plan, School Fees). Variable expenses include food, entertainment, clothing, and other expenses that may change every month or year. I cut down on my variable expenses till I hit my monthly target.

2) DEVISE A BUDGET PLAN

Recording all my expenses, it helped me plan my budget wisely. I categorize my expenses to sections such as Groceries, Entertainment, Savings, Loan, Travel, etc.

For example, if you are a currently polytechnic student who works during holidays, allocate your money with the fixed expenses first.

3) PUT YOUR INCOME IN SEPARATE ENVELOPES

I used a marker to assign each category on every envelope. Using small envelopes, it enables me to put them into my wallet. Following my budget plan, I allocated my money accurately.  For each designated envelope, I will only spend what is in it.

This practice of discipline will help you save a great deal of money. So what are you waiting for? There is no better time than now to implement this simple 3 step process!