Tips for Saving Money

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Hi Sandy, are you off today?

Yes. Actually, I found a part-time job recently. I’ve just back from work during weekend and I’m so tired today.

Oh, my friend, why not taking some rest during holiday? You should relax and enjoy your personal free time after a busy week.

I’m ok. Hey, we’re still young and energetic, right?

Yes, time flies. We graduated from the college two years ago.

My memory was still filled with our happy, funny and unforgettable moment at school.

Me, as well. Work is sometimes boring now. In fact, I’ve no idea of my future planning.

I’m planning to enrich my knowledge and go back to school. I would like to take a Master course five years later.

It sounds great and are you considering a full-time mode?

Yes, it’s my short-term goal to attend the full-time course. Therefore, I’m now trying different ways to save up enough money for the school fee within 2-3 years.

It’s cool. Although I do not have any short-term goal, it’s always my interested topic in managing money well.

Good. I’ve researched some tips for financial management. You know, it’s very important to start savings as young as possible.

Really? I think it’s a good starting point to control the budget by spending money wisely.

It’s true. Basic principle goes to the difference between needs versus wants. I always think twice before purchase.

Needs is an essential requirement or a necessity whereas wants is a desire which is not necessary for our survival at all.

To have a more complete picture of my spending in a month, I use money management mobile App to track my spending and the detail of each category. It’s simple to take photo of receipts and expenses will be recorded by category automatically.

You are so smart.

I can clearly track non-essential spending and will be more conscious about the unnecessary expenses. Based on the figures, it would drive me to change my habit for the purpose of reducing spending.

It’s awesome. I think I should also try to make use of the financial management tool.

Yes, it can remind me where the money goes. I’ll be more careful when spending money on those items that are based on unplanned decision. It’s certainly useful for me to achieve my target savings amount each month.

I do not know why I sometimes have a bad memory. I forgot to pay the credit card payment several times and felt surprised of the extremely high interest fee.

To avoid this situation, you should set up the credit card payment immediately at digital banking. Please do not delay the action.

Once receiving your e-copy or physical copy of your statement, you can simply set up forward-dated payment based on the designated payment date at the statement. It can solve the problem of your bad memory.

Yes, I’ll bear in mind to stay out of debt and there is no excuse for late payment because all the payment transactions can be checked and tracked conveniently online.

It’s also not worth for paying such high interest due to this reason.

As an alternative, you can also consider paying debit card rather than credit card each time. By using debit card, the payment will be made through the deduction of money from your savings account immediately.

I understood. It’s transparent and there will not be the case of racking up interest-bearing balances and finally coming up with high interest loan.

Correct, you can check your balance and know the status of your account activity.

Do you think saving 30% of my monthly salary is good?

It’s not bad. I think it’s totally not acceptable to have expense exceeding the income. Exercising self-control is truly crucial for accumulating savings.

I try different means to save more each month, however, it seemed infeasible. Those spending cannot be avoided.

There are both ways to increase your savings. First, you can increase your income by contributing your personal time at weekend.

Oh, finding a part-time job at weekend?

Yes, it may sometimes cause you feeling exhausted. If you’ve a clear personal goal, it would not be an obstacle and you can overcome it.

What’s my short-term goal? I think that I would like to buy a small apartment after five years.

Good. You can either find a part-time job or be more devoted to your work for making achievement.

I think that the prospect of my job is quite good. I’ve good working relationship with my boss. If I stay at the existing employer for another three years, it’s not difficult for me to get promoted. If I can be promoted, I’ll be able to grow my money.

It may not be true for growing savings even your salary is increased. Unless that you can be disciplined with prioritization and have the skills of managing wealth, I think overspending is the key to failure. It all comes down to your attitude towards financial management and spending. 

There are some saving tips for your reference. First, please avoid impulse purchase. It’s caused by the irrational thinking. As mentioned before, the item to be purchased is classified as needs versus wants. In addition, if you can’t comfortably afford it, you should rethink before purchase.

I’m so outgoing and it’s actually not easy for me to master it well. I’ll try to handle it.

Based on some researches, it’s the common problem of youngsters.

What’s the second one?

Second, please compare price at different retail and online stores. Especially for internet-savvy consumers, we’re the group of consumers to engage in product comparisons frequently before making purchase decisions.

I currently use comparison shopping mobile App which help me to find the best deal conveniently. You may find that some stores can offer more competitive price. Being a smart consumer, you’ll become more satisfied with the purchase because we can get the most out of the money.

I can’t imagine that technology increases our efficiency of filtering criteria and finding the most suitable product within several minutes. It’s amazing.

Third, please check if substitute can be considered for similar product but at a relatively cheaper price. If the purchase of items can also be cut finally, it would definitely be good for the environment because less is more.

It’s the knowledge that everyone should take note of it.

If you pay more attention of the spending habit, it can help increasing your savings gradually.

Thank you so much. I’ll follow some of the tips.

If you do not walk the talk and are able to execute the action, it is likely to save an extra of 20% more from your monthly income.

Right, it’s unquestionable that those mobile Apps can provide us extra information of the e-commerce merchants in addition to pricing. They include refund policy, delivery time and shipping cost.

Please also be reminded to reserve money for emergency fund.

As a conversative approach, it would sometimes be your monthly expenses lasting for 6 months. In case of any unexpected issue, it can avoid any financial burden or trouble at difficult period.

If I can save up to $50,000, I would like to start my investment e.g., buying stock to generate profit.

Investment involves risks. You may consider other low risk approach.

For example, you can purchase fixed amount of stock in a monthly basis so that you can enjoy the opportunity of lower average cost over the investment period as well as the potential growth of the stocks.

That’s a good idea. I can buy more shares when the stock price is low and fewer shares when the stock price is high. 

If you would like to purchase stocks at one time, please learn basic stock analysis which can help making right investment decision.

Buying stocks involve both analytical and psychological skills. It’s a common mistake that some investors may invest in the unknown. Unfortunately, the stock price drops significantly. Indeed, it’s not easy to earn money at the complicated stock market.

I heard from my dad that there was no guarantee of the return. Although the yields may be a better return than savings, the news of the stock may suddenly cause the stock price going down unexpectedly.

Agreed. You should diversify the risks by investing in products with low, medium and high risks.

As a result, you’ll not be frustrated due to the drop of value of the overall portfolio. There is so much knowledge and skill that we should learn in detail. Having strong willpower and resisting temptation are both important for managing personal finance as well.

I’m clear of my goal now. Let me join you to start budgeting.

Let’s plan the expenses and savings, set our goals and monitor the result. My dream is to have financial independence earlier that my savings and investment can sustain my lifestyle indefinitely.

I would love to retire early rather than the mandated retirement age as well!

Same to you. Let’s catch up later.