YOU CAN’T SAVE YOUR WAY TO FINANCIAL FREEDOM
When I was in my 20s, saving money was my superpower.
I became an expert at finding discounts through various means, including using coupons, membership deals and email newsletter promotions, as well as strategically deploying my credit cards for the right spending category each time for the maximum benefit.
But after a few years of trying whatever I could to save more money, I was already spending just S$500 a month on a take-home salary of S$2,000, and it was close to impossible to spend anything less since I still had bills to pay.
I had to learn the hard way: You can only cut so much of your costs before hitting an irreducible minimum – a pretty miserable point where you’re left with only strictly necessary expenses like housing, food and transport.
Even this floor is one that keeps rising. In the last few years alone, we’ve seen prices go up for all these things (and will likely only get higher over time).
This floor isn’t entirely unshakeable either.
Imagine saving up S$300,000 for your retirement years, only to be hit by an unexpected medical bill (one that your insurance no longer covers, since you couldn’t afford to keep up with the rising premiums in your non-working years).
Or perhaps, you budgeted that you would spend S$2,000 a month in your retirement on life’s essentials, but over time, inflationary pressures have driven up your monthly expenses by 30 per cent even though you’re not spending on anything more than exactly what you planned.
Cost-cutting alone will never give you the financial security that you seek.
