I was reading a couple of financial sites / blogs.
And most of them don't tell the whole truth about what they think.
I can hardly blame them. People like to read what they want to read. If you don't say nice things or things that are fairly expected, people don't go to the sites. So it makes good sense to bend the truth a little to make their message more acceptable to the masses.
Note: When I say most readers or masses, I mean most average Singaporeans. Not the frugal financially discipline community.
For me, I don't really care, I typically say what I want. I have some readers, not a lot compared to other blogs/sites and I'm very grateful for my readers. So I always want to keep things as true as possible for my readers and not just put across a message just to seem less extreme.
So about today's topic, when I used to get my salary, the company would pay to my OCBC account. It was the account for good interest last time. I had a standing instruction set up, which would transfer $2,000 from OCBC to my DBS account, which is my float account. Basically, that's my spending money for the month. It never changes year after year. $2,000 is plenty of money to work with. SO when my salary increases, the $2,000 still remains the same. Every increment goes straight to savings. I only adjust every few years, if/when life has some milestone changes.
So what's this nonsense about spending 80% and saving 20%, or whatever percentage which so many sites talk about. Ok I understand when someone just starts work, he/she may save less, that's fine, but why are we talking about percentages here. The necessary spending every month, is typically fixed. Why would you want to increase your spending just cos you have gotten an increment? Furthermore, you have already gotten used to spending X amount every month, so there's no real need to spend more right? Once you have gotten used to spending a lower amount, WHY INCREASE IT??? Then you'll get used to spending the larger amount, then the next year upgrade again?!
So you know, I get it, I get it, people like to upgrade, ok fine, so many writers would say set a budget of 80%/20% or whatever other percentage they recommend, so that people can enjoy their increments. Ok maybe I'll close one eye for this way of thinking...
But when I read these sites again, and they talk about how to spend the bonus, it's in some percentage breakdown again!? Hello? Want to upgrade how many times? Bonus should be saved. 100%. That's it. Daily spending has been budgeted for, by absolute amount or by percentage, why is there any need to splurge when getting the bonus? People should be recommended to live on their monthly salaries and keep within their budget so that they can plan for their retirement.
The thing is, I think, it's fine, IF the writers really believe that funds should be budgeted by percentage or IF they think readers should spend a share of their bonus. BUT, I believe, many financial writers DON'T believe in this. Look, many financial writers are frugal, save hard, and try to gain financial independence as early as possible. It is highly likely that they would have a hard budget of their monthly salary and save their increments, and when bonus comes, they would likely save 95% of it and maybe treat themselves to a nice meal.
But I can't really blame them, if they were to write like me, and advocate a high savings rate and be tight on the bonus spending, who's going to read their sites? If most financial writers say to lock their monthly budget up for 10-15 years, and spend only 5-10% of their bonus, who's going to read it? If I were an average reader, I'd think this guy is mad and go to a "less crazy" site, who is going to advise me to save 10-20% and "allow" me to spend large chunks of my bonus. Because a financial writer says it, it must be right, so I feel better spending 80% of any income that I receive. It makes me feel better to spend cos someone who has financial knowledge has endorsed it.
And yet if we think about it, most financial writers ARE "crazy" most are considered extreme vs the normal context. Since they practice good financial discipline, it is highly likely that they are very prudent in their spending regardless of their increment or bonus. Which leads me to conclude that most of them are typically not telling the whole truth. What they would probably like to say is, "Spend a fixed amount every month. Save any increment. And give yourself a small treat and save 90-95% of your bonus." And yet they can't say that, cos it would turn off too many readers.
So it's an unfortunate situation...
I'm not saying everyone SHOULD be extreme. To each his own choices. But rather, I'm highlighting that most financial writers would recommend a normal advice, so that they would seem more mainstream, and appeal to readers, whereas, their feelings, beliefs and their own practices differ significantly.
So, personally, what I'd recommend is spend a fixed amount every month, $2k, $3k, whatever, save the rest regardless of increment. Don't even adjust for inflation. Inflation is your "challenge" to cut your spending by the level of inflation every year.
As for bonus, save 100%, cos you won't know it even came into your bank account. When I set up my bank account, the bonus went into the OCBC account so I hardly noticed that it came in. Since I have gotten used to the fixed amount every month, why is there a need to spend anything more?
If you think this is too extreme, then just adjust the numbers to amounts which you feel that you can accept. That's your choice. You always have a choice.
The thing is, most readers would adjust their budget to whatever amounts they feel like, regardless of who they read. It just makes them feel better that they aren't deviating too far off the recommendation. So a "crazy" recommendation makes people feel worse than "normal" advice, so people like to read normal advice.
But that's how the world works. Can't blame them. Readers like to read what they like to read. They read news that appeals to them, and reject or avoid news that they don't like to hear.
Life's just like that. Unfortunate but true.
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And most of them don't tell the whole truth about what they think.
I can hardly blame them. People like to read what they want to read. If you don't say nice things or things that are fairly expected, people don't go to the sites. So it makes good sense to bend the truth a little to make their message more acceptable to the masses.
Note: When I say most readers or masses, I mean most average Singaporeans. Not the frugal financially discipline community.
For me, I don't really care, I typically say what I want. I have some readers, not a lot compared to other blogs/sites and I'm very grateful for my readers. So I always want to keep things as true as possible for my readers and not just put across a message just to seem less extreme.
So about today's topic, when I used to get my salary, the company would pay to my OCBC account. It was the account for good interest last time. I had a standing instruction set up, which would transfer $2,000 from OCBC to my DBS account, which is my float account. Basically, that's my spending money for the month. It never changes year after year. $2,000 is plenty of money to work with. SO when my salary increases, the $2,000 still remains the same. Every increment goes straight to savings. I only adjust every few years, if/when life has some milestone changes.
So what's this nonsense about spending 80% and saving 20%, or whatever percentage which so many sites talk about. Ok I understand when someone just starts work, he/she may save less, that's fine, but why are we talking about percentages here. The necessary spending every month, is typically fixed. Why would you want to increase your spending just cos you have gotten an increment? Furthermore, you have already gotten used to spending X amount every month, so there's no real need to spend more right? Once you have gotten used to spending a lower amount, WHY INCREASE IT??? Then you'll get used to spending the larger amount, then the next year upgrade again?!
So you know, I get it, I get it, people like to upgrade, ok fine, so many writers would say set a budget of 80%/20% or whatever other percentage they recommend, so that people can enjoy their increments. Ok maybe I'll close one eye for this way of thinking...
But when I read these sites again, and they talk about how to spend the bonus, it's in some percentage breakdown again!? Hello? Want to upgrade how many times? Bonus should be saved. 100%. That's it. Daily spending has been budgeted for, by absolute amount or by percentage, why is there any need to splurge when getting the bonus? People should be recommended to live on their monthly salaries and keep within their budget so that they can plan for their retirement.
The thing is, I think, it's fine, IF the writers really believe that funds should be budgeted by percentage or IF they think readers should spend a share of their bonus. BUT, I believe, many financial writers DON'T believe in this. Look, many financial writers are frugal, save hard, and try to gain financial independence as early as possible. It is highly likely that they would have a hard budget of their monthly salary and save their increments, and when bonus comes, they would likely save 95% of it and maybe treat themselves to a nice meal.
But I can't really blame them, if they were to write like me, and advocate a high savings rate and be tight on the bonus spending, who's going to read their sites? If most financial writers say to lock their monthly budget up for 10-15 years, and spend only 5-10% of their bonus, who's going to read it? If I were an average reader, I'd think this guy is mad and go to a "less crazy" site, who is going to advise me to save 10-20% and "allow" me to spend large chunks of my bonus. Because a financial writer says it, it must be right, so I feel better spending 80% of any income that I receive. It makes me feel better to spend cos someone who has financial knowledge has endorsed it.
And yet if we think about it, most financial writers ARE "crazy" most are considered extreme vs the normal context. Since they practice good financial discipline, it is highly likely that they are very prudent in their spending regardless of their increment or bonus. Which leads me to conclude that most of them are typically not telling the whole truth. What they would probably like to say is, "Spend a fixed amount every month. Save any increment. And give yourself a small treat and save 90-95% of your bonus." And yet they can't say that, cos it would turn off too many readers.
So it's an unfortunate situation...
I'm not saying everyone SHOULD be extreme. To each his own choices. But rather, I'm highlighting that most financial writers would recommend a normal advice, so that they would seem more mainstream, and appeal to readers, whereas, their feelings, beliefs and their own practices differ significantly.
So, personally, what I'd recommend is spend a fixed amount every month, $2k, $3k, whatever, save the rest regardless of increment. Don't even adjust for inflation. Inflation is your "challenge" to cut your spending by the level of inflation every year.
As for bonus, save 100%, cos you won't know it even came into your bank account. When I set up my bank account, the bonus went into the OCBC account so I hardly noticed that it came in. Since I have gotten used to the fixed amount every month, why is there a need to spend anything more?
If you think this is too extreme, then just adjust the numbers to amounts which you feel that you can accept. That's your choice. You always have a choice.
The thing is, most readers would adjust their budget to whatever amounts they feel like, regardless of who they read. It just makes them feel better that they aren't deviating too far off the recommendation. So a "crazy" recommendation makes people feel worse than "normal" advice, so people like to read normal advice.
But that's how the world works. Can't blame them. Readers like to read what they like to read. They read news that appeals to them, and reject or avoid news that they don't like to hear.
Life's just like that. Unfortunate but true.
<<PREVIOUS POST // NEXT POST>>
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