A Simple Way to Really Save Money

When I was a kid, saving was easy. I got a dollar for pocket money everyday and I would use part of it to buy food at the canteen in school. The remaining amount I would put it into the piggy bank and once its full it will off load into the bank.

This was a rather slow process but I was pretty surprised at how much I could save after a while. After turning 17, I received the ability to withdraw money from my own savings account and my savings have dwindled to almost nothing.

I realised that for someone who lacks the discipline to save, the only way is to keep our savings out of our reach.

So after I started working, I created an account purely for saving such that I have no ATM card to withdraw money from the account and I made sure I paid myself first, before paying all my bills and using it for expenses.

Pay Yourself First

Set aside an amount that is reasonable like maybe $10 to save each month. You probably won’t even miss it. If it is easy you can set aside more money to save. But as it takes enormous willpower to set aside money and not spend it after you see it there in your account and you know will have stuff to buy like a new shirt, shoes, iPad, iPhone etc.

What we can do is simply put the money in another account where you cannot access, like how you would deny an alcoholic from access to the beer cabinet.

Next step is to Make it Automatic.

How to do it :

e.g If you use DBS as your main transaction account, get another account from UOB or OCBC or other banks as the savings account. If you love the same bank or find it a hassle, just make sure you do not have easy access to the account.

Once your pay or allowance comes in, set up a Standing Instruction through internet banking if you use POSB/DBS every month to transfer $X to your savings account at the same day each month ( your payday ).

Once you have set it up, its done ! you have taken the first step to becoming a Saver.

You are free to use the remaining amount in your current account or transactional account. It may take some time but after a while you will get used to using less money as the new “normal”. If you feel like challenging yourself more, just go back to the Standing Instruction to increase the amount.

This is pretty much how CPF is deducted from your account each month before you even see the money. You are already pretty much living on 80% on your income already if you are a local employee in Singapore.

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