Saturday, 18 October 2014

My Financial Journey 3 - Be Persistent, Patiently

Sticking to one's aim to build up wealth requires persistence, as I have mentioned in my last post

In analyzing my own situation, I figured I have discipline, but I am also well aware that if I insist on doing things my way all the time, I may end up with no friends and everyone would probably find me a bore.  

The only way to stick to one's financial plans, without hurting relations, is to do it with patience.  If you "arm-wrestle" your friends and family to follow you in your spending habits, not only will it not last, it will also strain relationships. The level of discipline required of a parent is even higher. You have to consistently lead by example. No use teaching your kids to be frugal when you yourself spend with little consideration.  But you also have to teach them patiently, else you are imparting the wrong value that money is everything.

The pressure to spend money exists everyday.  I find that the best way to persist in our own spending plans is simply to say matter-of-factly that you don't have a budget for "so-and-so".  Or state upfront, your budget is "so-and-so" for the meal you are having together, for example.  No justification needed. Of course, if you feel the people you are with are receptive enough, you can always share your bigger financial goals.  

Surprisingly, I found out that this seemed to have rubbed off on some of my colleagues.  One colleague in particular, I remembered, was a self-confessed shopaholic. When she saw how I was keeping a budget, she also started keeping track of her own expenses.  

One fine day, she confided in me that she was still paying off credit card debts accumulated since university days, when she went on a whirlwind tour of Europe on borrowed money before even starting work.  She had discussed with her husband and decided to quickly pay off those debts by lowering expenses.   A "favour" she asked of me was to help her packet some food from a hawker centre near my place everyday. She would then eat that for her lunch, saving on food expenses and also stopping herself from shopping during lunchtime.  Frankly, I was speechless for a while, but gave her my full support.

A few months later, this friend announced to me that she and her husband had managed to pay off all their credit card debts and for the first time, they were able to "own" their full salary, instead of transferring a portion of it to pay off their debts.  That image of her looking so carefree and relaxed stayed with me, and I realized that even though budgeting was meant to help only myself, I was also indirectly helping others.  That was one of the things that kept me going. 

With my children, the self-imposed need to give them a "happy" childhood nagged me almost all the time.  I confess, I sometimes secretly wished that they had cuter outfits, colourful bedrooms Ikea-style and the latest toys.  But the "rational" me know that they outgrew these things really fast.  So, I persevered and told myself to be sensible.

Just some examples: kiddy rides and toys.  I never insert any coins in those coin-guzzling kiddy-ride machines that every young toddler loves. My kids would just sit on them and pretend they are moving haha.  As for toys, I made it a point to never pay for toys in my kids' presence.  My rule was to "window-shop" at stores but they are not to pester me to buy. If not, out we go.  

If my memory serves me right, unlike many other children their age, my boys had never once thrown a tantrum over wanting to buy something.   But, without them knowing, I would make a mental note of what they truly liked.  I would buy it when there is a sale (when they were not with me) and gave them as presents for their birthdays. Once a year, I would maybe add two or three toys and the rule was they had to share with each other.  Most of their other playthings were gifts, hand-me-downs, freebies or even self-made toys.

More than a decade later, I finally found validation for my actions when my boys are in their teenage years.   In our daily conversations, when they recall their favourite childhood memories, what they remembered most vividly was me reading bedtime stories to them and how I would make up stories for them based on characters they chose.

Their favourite toys (defined as the only toy they would save in the event of a fire breaking out) turned out to be two very old, freebie stuffed toys they got when they were toddlers.   I was very surprised by this because during our stint in China, our rich expat friends had given them really nice transformer, lego toys and nerf guns etc.  When I asked them why, they said the two toys have shared many happy memories with them, and were too precious to lose.

So, can you be a cheapo parent and still raise well-adjusted children? Can you be "budget-conscious" and still have friends?  I suppose, the answer lies in what else you do besides being frugal.  You can give freely of your time, your thoughts and your love.  This sounds cliche but it's been proven to be true in my case.  

So, on your way to financial freedom, be persistent, but do it in a patient way with the people around you.  It takes time - a long long time, but slowly, people around you will understand and even embrace what you do.  

In my next few posts, however, I will speak on being "ruthless".  Not to others of course, but to yourself.  How did we speed up the accumulation of our "Goose Account" and how we used the money to invest when the time was right.

Till then, enjoy your friends and family as you embark on this financial path.