Our 7 Simple Family Finance Habits

This is a continuation from my last post. My family follows 7 simple habits to improve our family finances. Most can be easily achieved and have helped us over the years.

Habit 1: Always check our receipts

My wife has a habit to check our receipts after paying at supermarket and restaurants. Several times, we discovered errors and promptly asked for a review in the payment. We should never pay extra for something that we should not. Do remember to check your receipts on the spot rather than doing it back home!

Habit 2: Only buy what we need

It is easy to be distracted by “special discounts” or “Buy 3 get 1 free” when you don’t really need the item or the bulk. Interestingly, there are times when “special discounts” are indeed special as they are pricier than the price from another store. Buying in bulk at times can be more expensive than buying individually from another store. No matter what, it is best to only buy what we need rather than choke up your house with more clutter.

Habit 3: Compare prices

A simple price comparison between nearby similar stores could save us some money. We had the habit of checking prices from both Watsons and Guardian, or between departmental stores before buying what we need. The price difference for similar items can be much more than we think.

Habit 4: Use discounts and cashbacks

Store discounts, Credit card miles/cashback, GrabPay discounts, Shopback cashback? Nowadays, there are many discounts and cashbacks which we can easily leverage on. Simply pay with credit card to gain miles/cashbacks or automatically gain cash back when you use a registered credit card at Shopback’s merchants. Why resist bringing in some cash back into your pocket!

Habit 5: Pay our bills promptly

Not paying our bills promptly will result in additional interest payment which will really burn our pocket bigger every month. We always aim to pay up our bills in advance at times before the statement comes in.

Habit 6: Bring own water bottle instead of order drinks

We developed the habit of bringing our own water bottle along. Drinking plain water keeps us well-hydrated and helps us to reduce the excessive sugar intake from soft drinks. Each drink cost around S$1.50-2 (US$1.10-1.50) and we could easily save around S$90 (US$66) a month per pax.

Habit 7: Stay healthy

Falling sick costs money and time. Better to stay healthy by eating right, sleeping well, exercise regularly. We make sure our breakfast is simple and nutritious – oats, wholemeal bread, 8hrs of sleep, regular jogging, etc.

Having good financial habits enabled our family to build up more cash over time. We can use the cash in many meaningful ways including spending time with family on a good holiday! What are some of your interesting family finance habits? Feel free to share!

GoHuat

Related Post

1.       Is there a definition of success by Millennial Family?

A Definition of Success by a Millennial Family

I came across several posts that discussed how millennial define success including today's report on Business Times: https://www.businesstimes.com.sg/brunch/young-and-not-so-upwardly-mobile

This inspired me to think through my family's definition of success, and that is to achieve family financial freedom. 

Money is required for basic daily needs such as paying for our meals, as well as electrical, water, gas bills. To support these needs, we have to work very hard to earn our paycheck. Gradually work becomes a priority and later on, we regretted  not spending enough time with our family.

Financial freedom offers a choice to escape this rat race and allow us to focus on things that we believe should be our priorities. Many people might think that financial freedom requires a lot of money.

But... is it true that financial freedom equate to being wealthy? Need not be!

It simply means having constant cash inflow that can comfortably cover our expenditure. Hence if your monthly family expenditure is low, you would require lesser cash inflow to achieve financial freedom.

So how does our family plan to achieve this? Through 3 steps:

1^st is to follow good family financial habits. Will elaborate more in our subsequent blog post.

2^nd is to maintain family lifestyle spending even as salaries grew each year. This can also help mitigate some family financial risks. Again, will share more soon.

3^rd is to generate more passive cash inflow through investment e.g stocks, fixed deposit, etc. There are many choices and considerations e.g. market outlook, inflation etc. So we should adopt an approach that best fit our investment needs, profile and goals. It is important to do the math and assess the length of time needed to realistically achieve your goals, level of investment risks versus its reward and your risk mitigation measures. 

Hope you enjoyed this post. Would be keen to find out what is your family's definition of success. Feel free to share!

GoHuat

Related Post

1.      How have our financial perspective changed over the years?

Looking back at 2017 & setting Family Finance resolutions for 2018!

I hope everyone out there have already set your resolutions for the New Year?? After all the excitement of setting them, we usually find it challenging to keep track especially when our busy schedule takes control. Let us take a look at how our family finance performed in 2017 and our target for 2018:

Savings

We saved 57% of our total annual income from salary, 7% more than our target. Despite an increase in the number of overseas travels, we managed to keep our dollars in control with our savvyness. Will elaborate more in future posts. In 2018, we would need to spend more on the purchase of new household items including furnitures, kitchen appliances, as we would be settling into our new house. Based on our cash flow forecast, our expected savings for 2018 should be around 29%. We intend to go for a stretch target of 35%.

Stock Investment

Based on trading gains and stock dividends, our investment rate of return has improved from 3.55% in 2016 to 4.6% in 2017, 0.6% above our 2017 target. We are targeting a rate of return of 5% in 2018.

Emergency Funds & Cash War-chest

Our cash is divided into emergency funds (for urgent needs) and cash war-chest (for investment). In 2017, our emergency funds have expanded from 18 to 24 months of our monthly expenditure. Our war-chest has increased to form 25% of total portfolio and we intend to continue increasing it to at least 30% in 2018. We are also thinking of putting some spare cash into currency, likely Chinese Renminbi, but have not made a decision yet.

Overall, we managed to achieve our 2017 targets. The Singapore stock market has been trading sideways over a range of 3000-3400 this year. We believe 2018 will be a more challenging year for investment and will likely be adopting a more cautious approach for our investments. 

We have reached the end of our first 2018 post. Here, we wish our readers a prosperous and fulfilling 2018! Invest well and may all of you continue to advance towards your financial goals this year!