I did watch movies when I was younger though. And there was this movie which I learnt quite a bit from. Have any of you watched "The Patriot" starring Mel Gibson, it's about the American Revolutionary War. So you may think, what has an old war movie got to do with budgeting and financial prudence.
The movie is about the some American war, I'll not go into details. In a few parts of the movie, the main character, Mel Gibson, teaches his son to shoot a rifle. "Aim small miss small". Meaning, if you aim at a smaller area of the target, you may miss, but you will still hit the target in general. So if you aim at someone's head, you miss, well, you miss the head, but if you aim at the eye, you miss, you may still hit some parts of the head.
So let's take this to budgeting. I keep a real tight budget for my travel spending. $6,000 for 2 pax for 4 trips a year. We're fully aware that this is not much to work with. I set my Taiwan trips to be $1500. So if we work backwards, we'll need $500 for our food and transport which leaves us $1000 for our flight and accommodation. We can get our flight for $450 and try to keep accommodation within $550 for 7 days. It might sound tough, but we've been constantly hitting these budget numbers for the past few years. We go to Taiwan every year.
My thinking is very simple. When we are in Singapore, we have control over the flight and accommodation. We can slowly choose and wait for deals. So we run a very tight and tough budget especially when we are still in Singapore. Cos we can always say, nevermind, let's wait for a better deal another time. When we are overseas, we will spend normally. But yet, we don't control too much. If there's a fancy restaurant we want to try, we'll try it, if there's a new food we'd like to experience, we do it. When I'm overseas, my thinking is, I've already flown 4 hours here, paid for flight and lodging, I'll enjoy it if it's reasonable. That's not to say I go crazy with my spending. I just loosen up the budget a bit.
That's the thing about running a tight budget when in Singapore. Cos we still have control over everything. When we are in another country, we lose some control. So we let money be our power. So if we need to take a cab cos we got lost, then we just do it.
Sometimes, we exceed the budget, by a bit. But cos the bulk of our planning has been settled in Singapore, anything we exceed is the spending money. So maybe we exceed it by $100. No real issues.
IF we had been loose with our funds during the flight and accommodation planning, let's say $1200, this leaves us $300 on spending money for the trip. Possible to work within, but it's more challenging and there's a higher room for error. Not to mention, if we see something interesting to eat or try, we wouldn't be able to easily budget it in without exceeding the budget. The numbers just become harder to play around when we're already at the location.
So this is what I think is an example of "Aim small miss small". Set a tough and tight budget, even when I miss it, I don't miss it by much.
This mentality can also be used for many other things in life.
For example -
Setting savings goals. Let's say we want to save $1 million by 45 years old. It's tough, but probably possible. So we may be really frugal, go on less trips, invest wisely, etc. Even if we don't hit $1m, we may still end up with $800k. Still not too shabby.
Or students can aim to get top 5 in class. So study smart, study hard, etc. Must still study the right way, sometimes hard work isn't enough if the student is studying incorrectly. Let's say the student is doing most things right, even if he/she doesn't get top 5, maybe still end up in top 10.
Same like weight loss
Or training for a long distance run
Sales targets, etc
Essentially, aim small miss small.
Set a tough but possible target. With some luck, maybe you can hit the target. Even if you miss it, you still get a good end result.
It probably won't be wise to put the minimum result to be the target. Cos miss then...
The mind works in strange ways. I find that usually the mind can get close to the target, as long as the target is possible. So setting a low target, usually the mind will just barely make it there.
I used to have this issue when running.
When I trained to run 2.4km, I got tired around 1.8km.
When I trained to run 5km, I got tired around 4km.
When I trained 15km, I got tired at 10km.
For me, I find that typically, my mind and body will strive to reach the target but barely get me there. But if I change the target and train for it, the mind and body will just exceed the previous target and adjust to the new "normal" target, but yet barely making the new target.
Anyway, hope you have found this post useful today.
Remember. Aim Small Miss Small
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