Want extra money for shopping? Here's how to detox your finances in a week

Free clothes, no credit cards and budget lunches helped spendthrift Jeanne Tai pocket an extra $200 in monthly savings – here’s how


Day 1: Confronting my money

My wake-up call came after I realised I’d splurged $2,000 in mere weeks. All those little things – new clothes, drinks with friends, a haircut – had added up to a big financial blow-out. My philosophy towards money is that ignorance is bliss. But I couldn’t ignore the flashing number before me.

So I got help from Andrea Kennedy Chamorro, asset manager at MBMG International and independent financial planner. “No one ever got wealthy without mastering their cash flow,” she says. My first task: Find out where my money goes to each month.

So I tracked my expenses. It wasn’t pretty. While a third of my pay goes into a separate emergency funds account, I was dipping into my savings “cushion” of a few thousand dollars in my current account, which was dwindling.

Tip: The first step to mastering your money is to not ignore it.

Use a smartphone app to track your purchases, or spend 10 minutes a week sorting through your receipts. Once you’re aware of your cash flow, you’ll know where to cut corners.


READ MORE: Shameless tricks to save money you never thought were possible​ and 3 tricks to save money and live comfortably in Singapore​


Day 2: Setting a savings goal

I’m relieved when Andrea tells me she’s seen worse. The pluses: I have a robust emergency fund and no credit card debt. The minus: I’m not saving with purpose.

My emergency fund totals 10 months of take-home pay – way more than the recommended six – but it’s sitting idle in the bank. Plus, I had no idea what to do with the money. Andrea says I’d been saving simply for the sake of saving, accumulating money without any financial goals. Yet jealously guarding my nest egg was hurting me as bank interest rates generally don’t keep pace with inflation rates. “You may feel you have a large sum of money now, but just leave it in the bank and it’ll melt. You’ll feel poor later on,” she says.

My takeaway: Save wisely by setting goals, instead of stockpiling mindlessly.

Tip: Draft out mid- and longterm financial goals. 

I decide to save for the down payment on a HDB flat and retirement. I realise I already have enough money for the first goal by combining the money I have in my CPF and emergency funds. So, I can recalibrate my savings: I’m going to transfer my savings “cushion” from my current account to top up my emergency fund. From now on, 70 per cent of my monthly savings will be for my retirement, and the remainder for “fun” expenses like travel (see Day 7).



Day 3: Stashing my cards

Andrea recommends surviving on a “cash-only regime”. Counting bills makes you more conscious of your money, a sensation that’s lost when you pay with plastic.

So, I withdraw $250 for the week. As I see it dwindle, on things like topping up my EZ link card, I realise I need to streamline my purchases. For instance, when deciding where to have dinner with a friend that evening, I tell him I can afford, at most, a $20 meal. He’s understanding, though bemused when I stash the restaurant bill away in an envelope marked “Jeanne’s receipts”.

Tip: Get a friend to be your spending watchdog.

I log my expenses into a Google spreadsheet that Andrea can view. Knowing that someone might ask “why did you blow $500 on a dress?” motivates me to spend smarter.


Day 4: Brown-bagging lunch 

I cheat today. When reconnecting with an old friend over dinner, we over-order and I end up with a hefty bill. As I don’t have enough cash, I put the amount on my credit card.

Andrea reassures me: “If you have to spend more to feel normal, then do. Just know it will cut into your savings.” To make it up, I pack lunches to work – sandwiches and leftover dinners. This saves me about $5 a day, or $100 a month. Enough for a fancy restaurant meal or a new cocktail dress.

Tip: Watching your spending doesn’t mean being a social pariah. 

I realise it’s okay to treat myself occasionally to nice dinners. On some days, I lunch with my colleagues but negotiate affordable options. Try helpful suggestions like “I’m tight on cash, but don’t mind those really good beef noodles at the coffee shop.”



Day 5: Swopping, not shopping

I lose a lot of money to “one-hit wonder” buys – clothes I buy that make me go: “What was I thinking?” Instead of buying more, I organise a clothes swop with colleagues.

I trade two dresses and a necklace for three tops and a tunic that would have cost me over $100. They’re in bright punchy colours, which I’ve always wanted to experiment with but never did, in favour of putting my cash on “safe” neutrals. But as they’re free, I can afford to take fashion risks. Talk about cost-free experimentation!

Tip: Pre-loved clothes portals and book club Books & Beer host swops every few months. Check out their Facebook pages for updates.


Day 6: Learning to invest

I learn from Andrea that most experts recommend having an emergency fund of six times your monthly expenses. Then, if you have spare cash, consider investing in unit trusts or dividend-paying blue chip stocks to grow your money, she says.

I’ve never started investing because I’m intimidated by financial jargon. I decide it’s time to tackle this by educating myself. I log onto online investment platform, which allows users to create a free account to research and buy unit trusts. They also have useful articles on, say, the difference between bonds and stocks. I realise it doesn’t take much effort to grasp the basics, and decide to spend half an hour every week to read up and get clued in. Once I’ve saved up enough, say about $5,000, I’ll invest.

Tip: Look at investments as a medium- to long-term savings plan, rather than a way to make a quick buck. 

That means holding onto your investments for as long as a decade or two, says Andrea. If you aren’t retiring anytime soon, you can afford to wait longer to see returns on your investment and ride out dips in the market. This is different from people who enter the market looking to make a killing within a few months – they may not have the luxury of time, and may be forced to sell off stocks even when prices are low, ending up with losses.



Day 7: Investing in fun

I’ve never been able to stick with “austerity budgets” that are all about scrimping and sacrificing. So I’m glad when Andrea encourages me to allocate 30 per cent of my monthly savings into a “fun fund” – meant for enriching experiences like language classes, a holiday or a wakeboarding workshop.

I make my first “fun” splurge for the month – a salsa-dancing workshop with my boyfriend costing $150. As Andrea explains, these are activities I should do when I’m young and fit. Plus, factoring such treats into my budget makes me feel my savings plan is doable, rewarding and, well, fun.

Tip: Set a limit to how much you want to allocate for “fun”. 

It’ll make you really think about what you should invest your time and money in. You’ll also be more committed to your purchases – no more impulse gym memberships that end up unused – and value them more.

The pay-off? All the sweeter.


This story was originally published in the January 2013 issue of Her World.

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