The more I read personal finance blogs, the more I realise the secret towards financial freedom is within our grasp. It is something that all of us have known in our lives but were too set in our ways to realise it. We caught sight of it in some of our parents’ lives, some of our grandparents and those people who choose not to live like everyone else.

What is this secret to financial freedom?

It is to realise that to live more, we don’t necessarily have to spend more.

Spend Less, Live More

Any personal finance book worth its salt will tell you that one of the principles of achieving financial independence is to live within your means. It is simple but it is not easy. To live within your means in practical terms results in you confronting your worst enemy when it comes to financial independence. YOURSELF.

You are both an asset and a liability towards your goal of financial freedom. You are an asset in that you gain in value through experiences and skills you gain from your job, career or business. You represent a stream of cash flows accruing from trading your time for money. Your life energy to put food on the table and to put a roof over you and your family’s heads.

You can be a liability in that your lifestyle drives the expenses in your life. Your standard of living defines how much income is “enough” and why you spend on the things you do. How you define what is “enough” and how you see yourself in relating to others when it comes to what is “enough” makes a big impact on your standard of living.

How can you spend less and live more?

1) Live like no-one else

Keeping up with your neighbours or trying to play the one-up game with your peers is one of the worst things you can do. In trying to live like other people (or get broke trying), we sometimes overextend ourselves. What car does your friend drive? Is it bigger than yours? What house does your cousin live? Is it in a nicer neighbourhood than yours? What watch do you wear? Is it a value-for-money Seiko or a jewel encrusted Rolex?

To be human is to want to see how your neighbour fares materially and to go one-up on him or her. Singapore society prides itself in trying to be number 1 in the economic competitiveness, GDP growth, airport. These indicators mean nothing if the trickle down of economic growth doesn’t flow to your own income. The reality is that the rich WILL get richer in Singapore and in other countries and if you are not part of the group that is contributing a big chunk to gross domestic product, then forget about keeping up with the Lims, Alis and Muthus. Even if you are earning that big chunk, you should not get involved in the game of “Appear Rich or Die Trying”.

2) Value People not Things

The cult of consumerism and materialism that propels us to go one-up against our peers by acquiring material goods and services that doesn’t make us happy demonstrate how we are increasing valuing things more than people. Singapore Inc. signifies some of the ills because of the relentless tune played by the mainstream media that the Singapore Dream is about acquiring the 5Cs (cash, condo, credit cards, country club membership and car). Our Government also frames policy issues in largely economic terms because Singapore as a City-State exists because the economic imperative prevails over all else.

I have done my share of volunteer activities and agree wholehearted that valuing people over things does something for our souls that material things cannot. How much happiness can your latest GPS/3.5G/Bluetooth/GPRS/GSM/CDMA/MP3 playing mobile phone give you versus the memories of the lives you have touched in helping others. I can still remember the laughter of the boys and girls I taught in kidsREAD three years ago but can hardly remember the various models of handphones that I have gone through in the last 10 years.  Those memories of sharing stories to children will stay with me even as my mind forgets what types of handphones that ever came into my possession.

3) Live in the present

If you ask your friends and family what would make them happy, invariably the answer would be to strike TOTO (lottery), 4D, etc. Of course health and happiness also rank high as answers but happiness has been strongly linked to MONEY because it is seen to solve our life’s problems. We also tend to seek happiness in having something HAPPEN. When I was in primary school, I thought achieving PSLE was happiness. When I reached secondary school, clearing my ‘O’ levels would send me over the moon. And on and on it went until now I am married with a spouse and a cute baby (my mini-boss) am mortgage debt free. Am I really happy? I too fall into the trap of waiting for happiness WHEN I’ve reached certain goals. It’s important to set goals to provide a target that you can strive for but it’s equally important to be happy JUST AS YOU ARE.

If you can be happy only when certain things happen, that you are setting yourself up for LOTS OF UNHAPPINESS because you and I know that SH*T HAPPENS.  I learnt from a Landmark course that LIFE IS EMPTY AND MEANINGLESS EXCEPT FOR THE MEANING YOU GIVE IT. Reading personal effectiveness and personal development books led me to this realisation. Unfortunately, I still find it challenging to put it into practice in my life.

Living in the present means to be thankful for what you have and appreciative. It means to compare DOWNWARDS. When I sometimes worry about my own financial freedom, I forget that there are so many more people who have to work 30-40 years and STILL NOT PAY OFF THEIR MORTGAGE. I have my health, my family and my career. I am appreciative and thank God for that. But even when I know this at an intellectual level, I have to keep reminding myself to appreciate it and know that each moment now is what life is.

Happiness is to appreciate each moment for what it is and to also know there are really people in worse-off situations. My 2.5 years and 10 years of reservist were useful references to know when I was in worst situations than the SH*T that I face sometimes at work, at home or in my personal life.

4) You are not what you spend on

Your clothes, lifestyle and spending patterns reflect your personality. But if you divorce yourself from your spending, you can live more with less. A lady image consultant ever took one look at me up and down and remarked, “Panzer, you are one of those who wear clothes not to be naked…” This meant that I didn’t have much of a dress sense. But that’s me. And it’s the bit of me that allows me to be relatively frugal and be able to live like no-one else in achieving debt-free status for my housing loan.

5) Some things REALLY are free (or at low cost)

Public libraries. Public parks. Neighbourhood garden/park connector. Sports Stadiums. Seaside. Shopping malls (window shopping). Cooking and eating nutritious home-cooked meal at home. Many amenities are taxpayer funded and you can make use of it at low cost. Exercising or taking a stroll near a public park is a good way to enjoy fresh air, light exercise and bonding with the family. Having a family meal together cooked with love and fresh ingredients beats any restaurant meal. Taking refuge from the heat of the weather by walking around in shopping malls without buying anything is a great way to enjoy the air-conditioning without paying for it.

At the end of the day, living more doesn’t have to always mean spending more. It is knowing what are your NEEDS, satisfying them simply and enjoying the occasional WANT being creative in value-for-money ways to do so. It is a fine-balancing act between knowing your NEEDS from WANTS and especially for WANTS masquerading as NEEDS.

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