How I Became Free
I just realized I haven't posted for a while. As you know, life in the IT world has its own ups and downs -- sometimes you're being bombarded with stuffs that you could no longer handle in your plate, while there are times that you have nothing left to do but surf the internet until your eyes burst out. Well, guess where I'm at? I became quite busy because of automation tasks and good gracious, I was able to see code again after six years!
So why did I chose this topic anyway? (you might ask)
And what is it about my freedom that you might get interested in?
Almost four year ago, I left my hometown and relocate to here in Singapore to fulfill my "Overseas Worker" dream. During that time, everyone else was tendering resignation and moving to this small country in Southeast Asia. I got dragged by the flow and just tried applying for a job online which fortunately landed me to my current job. The independent life, doing your own laundry, cooking for yourself, renting out your own pad -- typical American chick flick movie scenes -- those amazed me.
When I left home, I am not 100% financially ready. Everything was fast-paced. Time suddenly past by in the blink of an eye and poof, my one month grace period is gone. I need to book flights only days before the big trip (which made it more expensive), all from my own pocket, which apparently were my only savings. I borrowed a large amount of money from my Mom to help me with my new start in a new place. I was ashamed of myself because I just realized that in the six years of working on a nine-to-six desk job, I haven't saved anything (except for the flight which was nearly SG$600). I contemplated hard on where I had put all my hard-earned cash for 72 months. I did bloody computations until my brain worn out, only to find out that I bought PSP, Gameboy, Wii, Wii Accessories including Garage Band, Laptop, Mobile Phone, manga, scale model toys, and books that I didn't manage to read all. And almost every weekend, I was never home - I traveled, hiked and sleepover. And so, I revised a plan. I told myself that once I move to Singapore, I will save a lot, invest in stocks or mutual funds, and fill up my bank account.
But nothing of that happened. When I was finally here in Singapore, I was overwhelmed with lots of things. I am earning in dollars. There's always a place to discover and a restaurant to try out. There's a bookstore that sells all the Japanese manga and comics that you could imagine. And there's an opportunity to travel in nearby countries. For two years, I was living more than my means. I traveled here and there; I bought this and that until my credit card debt was around SG$4000. It was crazy. I don't even know how to pay for them. All I think was, this is my money, this is my life and I am happy.
But that Happiness is just temporary.
Not until the third year, wherein we need to move house. In Singapore, if you are moving from one house/room to another, you need to pay "one month advance, one month deposit plus agent's fee" standard. Then with additional fees like deposit for utilities, internet and cable, and lorries to carry your stuffs to your new place. During this crucial time of the year, you will be poorer by 200%. You don't have any right to even eat out. I was always dependent to my close friend (who earns quite big time since she works in a banking firm). I borrowed these standard cash-outs from her and pay her on a monthly basis. Yeah, she's generous and she understands that my salary is smaller compared to hers but I suddenly felt guilty. Should I always be dependent on her? What if she got laid off from work, where will I go? If she decided on returning back home, and I would be left here, how will I manage to pay those standard fees?
So the complete 360-degree turn realization hit. I told myself, "This madness should all stop!"
I started on plotting my financial plan. First, I should finish paying her my debt. Second, I need to pay that SG$4000 credit card debt. Third, I need to build my savings account so in the future, if there's a need to transfer house I know I would be ready. Fourth, if I want something, I should save for it. Fifth, I will keep my credit card but for emergency purposes only.
Little by little, I got out of debt. It took me almost a year to pay all of them. While I am closer to finishing my payable to my friend and to the bank, I started on enrolling in stocks. Well, I just buy because I don't know how to sell. I'm still a novice at that. Every year, I promised myself that I will allot SG$350 for buying stocks from the market. And so far, so good. I am receiving few dividends from my purchases, which is a good thing. It's not much, but at least you know that the market is everyday growing.
Then I purchased an insurance that is investment-linked. Payment would lapse in three more years.
So far, so good. But the other life insurance which is payable until 45yo, I'm trying to weigh if I can withdraw and at least get a small amount from it. Paying until you're close to retirement is hideous.
And I still follow the "manual" envelope method. I have two envelopes to fill up every month. One if for my Travel Fund, and the other is for emergency. I use the 'emergency envelope' to save up money for Christmas. If I have plans on going home for the holidays, I know that it's quite costly buying gifts for loved ones and friends and eating out and all -- so I have that emergency envelope to take care of that expense.
You all know that travel is in my veins. I tend to get restless staying in one place. As much as possible, I want to roam. Since traveling nowadays gets cheaper due to budget airlines, the cost of accommodation and tours will eventually be the ones which will eat up your pocket. So I've got my Travel Fund envelope. Every year, I plot out where I want to go and save up for it. And I always do traveling with a challenge. For example, I went to Malacca with a friend and did a SG$200 challenge, it was altogether fun because you're scouting on cheap but good deals on food and stuffs while having fun in a foreign place. [Btw, we passed that challenge and managed to spend only SG$180 each].
Give it a try, it would be fun! :)
Then as a responsibility of a "good" overseas worker, I still do remittance. I am fortunate because my Mom is still working and she's not using up the money I remit monthly, instead she pays the house bills from her pocket then let my money sit in the bank to grow. She's the one who's managing my and my brother's money. She puts them in time deposits and mutual funds. My Mom is always good with money management and I envy her for that.
Then due to recent events, with friends moving out of Singapore and pursuing something somewhere; plans of migrating is also being considered. Since I am not getting any younger and the want of getting my folks to be with me until they retire and grow old, places like New Zealand and Australia are being put into the picture. Hopefully, with events at hand, opportunity may rise for relocation, but we'll see. ;)
So yes, there's also a separate savings account for building up the fund for migration. I am happy that I am halfway of that fund goal. :)
And lastly, I still keep records of all my expenses. Before, I used to have a small notebook jotting down every items I bought together with its amount. But I recently revised it and created an online spreadsheet in Google Docs, which is of course private. I key in there my monthly salary deducting all the expenses that I need to pay from rent to utilities to insurance to remittance to savings. Whatever is left is my monthly allowance, which includes grocery, eating out, movies or bicycle rental. I told myself, if SG$200 was left in my account, I should live within the 200-bound, nothing more. Equivalence Partitioning. If I ended up with no more money, I still record it so I know how to budget wiser the next month. And since there are unforeseen circumstances that would probably eat up all of my supposed-to-be monthly allowance, that's where the emergency envelope gets into the picture. I "borrow" money from the emergency envelope but come next payday, aside from topping up my contribution for that month, it is mandatory to pay for the money that I 'borrowed' before.
What I shared are just some of the things that helped me get out of my financial debt. Those helped me to become almost a hundred percent free, or at least not having a single payable (to someone) to worry about. I know that I still have a lot to learn in terms of money management. Having such a disciplined perspective in terms of money handling is the greatest key to it all. Even the Bible teaches us that in order to manage our finances well, we should keep good records of them.
We need to know what we owe, what we own, what we earn, and where it's going.
I hope you won't fall in the same trap as me before. But if you did, share me your success story in being debt-free. And if you are currently on that situation, there's still time to make a U-turn, now's the time to move! :)
[images c/o Google]