Gilbert Goh
This statement is, I am afraid, easier said than done. When one decides to downsize due to financial constraints, it is always tough as we are used to a certain lifestyle that has become a part of us.
The basic necessities such as groceries, bills, food stuff still need to be paid and these items are must-haves. You can’t delay too long also on paying electricity bills or the house will be in total darkness after two to three months of payment default. There were some occasions when Singapore Power threatened us with a power shut down when we were late in paying up for three months. The way to go about this is to pay a bit every week so that the bill is not accumulated so much that it becomes an astronomical sum after three months. The same goes for other bills such as service & conservancy, telephone, etc.
Some families experience the mini crisis of a power shut off at home and it is not only inconvenient but also pretty demoralising. This will be the time that you see breadwinners going round to borrow from friends or relatives as desperation sets in.
We also work around the income of one person so that we are realistic about our expenditure. This is no time for pride/ego and unless we work on the situation amicably together, you will find yourself having a crisis at home if we. As only my wife is the only one who brought in an income at that time, we began to work the bills around that income. Trust me, this is not as easy as it sounds.
When I was jobless, our family made out a list of items that we can do away with and we were surprised that they were quite helpful in cost savings when implemented over a period of time:
a. Movies – as a ticket costs around $9.50 during weekend, we save around $30 when my family avoided the movies which we indulged in at least once a week previously. Savings – $120 per month.
b. Restaurant – we like a pamper or two occasionally when we were doing well but the downturn had discouraged us from eating in such posh places. We saved around $150 per month this way. Foodcourts are still decent eateries anyway.
c. Holidays – this is a big ticket expense and by not going on holiday we must have saved at least close to $3000 a year. We chose cheap holidays in neighbouring countries such as Bintan or Kuala Lumper if we absolutely needed a family outing, spending not more than $500 per trip. Gone are the days when we travelled lavishly to Europe, Australia or New Zealand at least once a year. Savings – $2500 to $3000.
d. Car – I was fortunate not to have own a car at all in my life. This is another big money drainer and could easily save us at least $700-800 a month. I must have been the only family in the condominium then that did not own a car. Savings – $700 a month. No regrets whatsoever.
e. Downgrading – purchasing the private house without first having a full time job must be the biggest financial mistake of my life. Many friends have advised me to sell the private house and downgrade to HDB flat but as the property market then was very weak, we may have had to top up the bank’s loan after selling the house. So, we continued to struggle to service the mortgage loan and it was only after five years that we could sell the house – incurring a loss of around $150,000 due more to the bank’s interest than selling at a loss. We have since decided not to take any bank loan from any home purchase in future but rather spend within our budget.
f. CDs and books – I stopped buying my favourite music CDs and DVDs. I used to spend $50 a month on the latest CDs and DVDS and must have chalked up at least 200 CDs in my catalogue. I also spent around $50 a month on books. Now, I borrow books from public libraries or buy from second-hand bookshops. Savings – $100 a month.
g. Handphone plan – I always find our handphone plans here expensive so I decided to switch to a top up card. There were months that I had over $100 in bill charges when I had a local telco plan and I decided that this had to end. Top up card is affordable and I can control my usage as I can track the balance of the value on my phone. For the big three telco regular plans, there is no way that you can know how much you have spent until the bills come and you get a rude shock of your life at the end of the month. There is also the temptation to upgrade your phone with all the attractive new plans to change your phone every few months. Savings – $50 a month.
h. Maid – we had a maid for about a year or two before we decided to cease her services. Our daughter was only seven years old then and needed someone at home to care for her needs. However, we realized that we could replace most of her duties and by putting our daughter in after school day care when she turned 10 years old, the maid services were not so essential after all. Savings – $700 a month.
There are many ways to stay lean during tough times but we do not need to be miserly about it. Though cost cutting is important we also do not want to abruptly change our lifestyle totally. That will be total misery as if being jobless is not miserable enough. If you decide to catch a movie to unwind, go for it. I found that in life many things can be enjoyed for free. A day spent together with your family at East Coast Park can be both relaxing and carefree. Going to the airport for a family stroll can also be fun.
It is not the places you go to but who you spend them with that is more important.
Finally, tough times do need tough cost-cutting measures. There are no two ways about it. Certain expenditure that are unnecessary needs to go so that you can live on one income or no income at all in this tough time.
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