Please Don’t Fall Into This Spending Trap

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spending trap

The other day, my dad gave me one of the worst financial advice I’d ever heard from an adult (sorry dad).

We were talking about saving money, which was pretty much one of my most important student life principles, and I told him how I could’ve bought the new Samsung Galaxy S8 (but didn’t because at that moment it would have literally brought down my savings account to 0). Instead, I decided to be an angel by using the money to pay for my own expenses (including rent) for my 3-week graduation trip.

Here’s what he told me: “You know, Daphnee, you’re young so you should enjoy life and spend on whatever you want.”

I think what he really meant was that because I don’t have any dependents (like a family), I was free to do whatever I please with my money. It easier to take risks when you’re young. I believe this can be true in the financial context of investing: you got extra money and live on your own? It won’t hurt to try those high-risk investment products!

To the core, this is not bad advice but it’s misleading. To the core of my dad’s intentions, he was simply telling me to buy a new phone, one I’ve been eyeing ever since it came out, even if it means wiping out my savings cushion… because I’d get the money back when I start working.

But that kind of young-and-free-and-secure mindset isn’t what I’d call healthy.

In the adult world, this can lead you to live from paycheck to paycheck. Which is bad for your financial security and future.

‘Security’ and ‘future’ often sound boring and unrelatable to people of our age, but frankly, I’m done with those broke student days when the only choice I had was eating ramen for dinner. I’m done with the days I used to freak out about not having enough money for the rest of the week. I’m done with the thoughts I used to have when it was the end of the month: what if my allowance doesn’t get transferred to my account? What if my mom forgets to send it to me? Then I’d have nothing.

I used to be so stressed out about hitting ‘0’ in my bank account in my early days at my university that I vowed to myself to aim for the goal of never running out of money throughout my life. It is too stress-inducing and besides, I want to be independent and not fall back on my parents every time I need extra cash. That’s how I basically started being religious about saving money.

Don’t you wish you could stop worrying about money? Then, it’s important to be mindful of how you spend. 

Whenever my sister and I talk about the new Samsung phone, my dad chimes in and tells me: “You could buy it as soon as you get your first few paychecks.” Meaning: as soon as your bank account gets loaded, spend it.

Nope. Before getting a brand new phone (which I don’t need because my phone works perfectly fine), I want to build a proper emergency fund, contribute to a retirement fund, then start saving for my own apartment/loft! It’s not easy to see so much money coming in every month and not be tempted to spend all of it, but it’s necessary because your parents won’t always be able to help you. Bad things happen and you might need that kind of cash sooner than you think.

I know that owning my own place feels so far-fetched into the future, and I feel some people may judge me for pursuing an ‘impossible’ dream, but it’s something that aligns with my long-term goals of living on my own and be fully independent, so I’ll take it on even if it takes me 10 years to do it.

The lesson to be learnt is this: don’t spend on things just because you can afford them.

Spend on things that matter to you and that will get you closer to your life goals. 

And never, ever, make your bank account go down to ‘0’. (But don’t accumulate bad debt either! That topic would probably need another post of its own.) Just don’t run out of money. Build your emergency fund.

That’s your first step towards financial control and freedom!

What is one spending trap you’ve been falling into lately? Let me know in the comments below!

D. K. Waye.

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