I would periodically update everyone my personal spending. This is the update for this month.
You can review my past spending logs by going to the personal notes section of investment moats here in the future.
How I Group My Spending.
One of the reasons for publishing the spending is to show people just how spending should be. Some would wonder if it is consistent or erratic, high or low. If you are interested, you see it, and you form your own tale about it.
You will be able to tune in to a spending profile of someone who is single, older, a fully paid up home. If you spend more than this, then you can ponder why is that and what you think about it. If you spend less than this, then you can ponder why and what do you think about it.
I group my spending based around a few technical grouping:
- Flexible or Inflexible: There are some spending that we can be more flexible with. The spending tends to fluctuate over time. There are some spending that is more inflexible. The impact of this is felt more if you are retrench from work, wish to take a hard pivot in your life or career, planning for financial security or future retirement. A more inflexible spending would require your planned income stream to be more conservative while you can take some more risk if you have flexibility in your spending.
- Finite or Ongoing: There are some spending that will stop at some point but there are some spending that we don’t see it stopping objectively. Finite spending are insurance premiums, mortgage, allowance for kids, allowance for parents etc. Ongoing spending is a certain kind of transport spending.
- Role or Responsibility: What am I currently? Am I a worker? A husband? Or a Son? Some of the spending are group this way so that we are able to see just how much we are spending on something. Some of these responsibility will go away. For example, you spend on some travels, clothes, pay income tax because you are a worker. But if you are planning for a non-working phase of life, would you wish to know how much that you spend today can be peeled away.
In a way, this works for me because I always have an eye from the Financial Independence planning perspective. You might not, and you have your own reasons.
I hope that your way of grouping have some sensibility to it and helps you in your own way.
This is the spending for the month of October. Illustrations can be found on my Instagram here.
We start off January lower.
We will usually have Chinese New Year in the past so the spending would usually be higher due to gifts but since the Chinese new year this year is pretty late in February we won’t see it here.
I will break how I spend in the subsequent sections.
The Essential Inflexible Spend
I wrote about my essential inflexible spend here in this note: What kind of lifestyle would I need to buy for myself?
I group and track this set of rather inflexible spending to be reflective about how realistic is the numbers as part of the notes written above. The income stream from my Daedalus Income Portfolio is meant to pay for this spending as well.
The food spending is mainly the groceries that I use in my meal prep. I would eat 1 meal mainly a day, but think 15 days in a month, I would usually eat 2 meals. So what you see is just that.
A side goal for this year may be to eat more so I do expect the essential food & groceries to go up. It is a matter of how much.
Since I spend 2 weeks in Guangzhou and Hong Kong you won’t seem much here. In the past, I will explain to some in my community that you can account partly your meals to be essential and less essential. For example if you and your friends went out for a lunch that cost $30, technically you need to have a meal that cost $5 but because you are meeting your friends, you decide not to think so much.
So technically, $5 will go to essential food and $25 will go to flexible spends.
In this way, you are able to still have a reasonable view of how much you spend on essential food and how much that is less essential.
I can do the same for my vacation spending but it is a bit challenging so I account for most under my more flexible spend under vacation (which you would see later).
Transport is lower because I travel less in Singapore.
But it is also if you tap in any of the 6 NEL stations from Punggol Coast and Kovan, before 7.30 am, we will enjoy free travel for the first rail trip of the journey. You can read about free morning off-peak rail rides here.
This is a screen shot of one ride:
I took a bus service to the MRT station and that cost me $1.28. But the train service to office is $0.
If I walk to the MRT station (which is walkable), then most likely the whole ride is free. It is just that I got used to taking the bus in the morning. I am not trying to min-max my transport fee, nor going so early to enjoy this benefit. I just happen to go to office that early.
I have also paid the annual property tax which comes up to $212.
Overall, the essential inflexible spend is lower than the $850 monthly plan for Daedalus Income portfolio.
The Basic Inflexible Spending
The difference between the basic and the essential is that.. its less essential. You can probably think of something that you can at least be slightly more flexible… but actually not too flexible about that would make life more sane.
You want to renovate your place every 10 years or replace something right? You want to try and make life easier on an ongoing basis right? You want to take better care of your health right? Some of you will have strong opinions about some areas, more than others. To you the spending can be rather inflexible, but if you touch your heart, you know you can cut if the conditions are really bad.
If it fits those it ends up here.
This is also eventually what Daedalus Income Portfolio also need to provide.
I describe this spending in this note: Aside from my most essential spending needs, I need $5,160 yearly for my basic needs. I would set aside $174,000 to provide income for it.
Since we went Guangzhou, I decide to order a luggage in case I need to travel next time. I was not too successful with a few hiccups but my colleagues Nataly and Jayla ordered and direct the thing to the hotel:
This is the same one Nataly got personally and cost me $68.
I was on a look out for potential second hand single mattress from Tempur on Carousell to see how much of a difference they make without breaking mad bucks only to know that it really doesn’t help.
So I saw this one going for S$100 and I paid an additional $50 in delivery:
Will probably update you guys next time.
The Flexible Spends
I would group most of my spending that are flexible into one big pot. Realistically, this is the spending that make life interesting.
Realistically, we can be more flexible with these spends as well.
I find this spending to be less important for long term retirement planning but you might hold a different opinion. I do think that if you wish to enjoy something, maybe you would also want to work for it. But there are some sub-accounts that allow me to tune in to them.
I bought Cullen Roche’s new book Your Perfect Portfolio from Amazon:
Always a fan of Cullen’s content and I think there should be some really useful content to glean from this book. The book is on its way so have not actually come yet. $21.05.
In January, I have the privilege to have meals with the following people:
- My ex-colleagues Lucas and Angeline
Decide to treat them and the meal came up to $141.
Aside from that $82 is made up of personal coffee and food in Guangzhou.
I spent like $981 in my Guangzhou and Hong Kong trip. Bought some blind boxes for myself and colleagues as well.
You can read more here.
This month’s treat for colleagues at Providend:
- Peanut and red bean Shiopans from Gokoku: $43
- Pretty Good Muffins: $32
- Baker’s Bench Bakery: $40
- Lots of kopi: $11
Spending Funded from Other Sources
These are spending that comes from sinking fund/saving groups that we capitalized.
This would be mainly for my real insurance protection needs. You can read more about them here: Cutting My F.I. Capital Needs for Insurance Premiums from $131,366 to $58,132 by Prepaying for It.
If I capitalized this spending, I take it out from my recurring spend. A few line items of my insurance are really finite. Term insurance is. My $50,000 Limited Whole Life is. My health insurance is in my inflexible essential spend above, which I have plan as part of my expenses even if I am not spending it today (so as to shore it up for the later years).
The insurance is back to normal.
Spending on Work
I don’t have a lot of responsibilities like a lot of other people. Spending on work is a way to track those spending that is directly attributed to work. If I stop working this goes away.
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Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory Firm Providend. All opinions on Investment Moats are his own and does not represent the views of Providend.
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