Mistakes We (Women) Make About Money

I love talking to my friends about money, how we spend it, how much of it we set aside for savings etc. I know money is such a sensitive issue, and many cringe at having to discuss about it. But once a while, I love throwing a question on money related issues that all women can relate to, like shopping and shopping. Listening to how they handled the questions, I find a trend or pattern on money usage that we are all too afraid to admit.

Women my age, fresh out of college and start getting their paychecks from their first job, mostly have only one thing on their mind at the end of the month: What should I buy first?

Getting first paychecks is like an instant upgrade to your life, suddenly you don’t have to ask your parents for allowances, you get to sign a car loan, and if you are lucky, your paycheck enables you to snatch that new Tory Burch tote, without having to tighten your belt later on.

Well, let me share with you how an average 25 years old young exec spend their hard earned cash monthly:

Let me walk you through.( I’m assuming that we all live with our parents, so we don’t pay for rent)

If you work in Kuala Lumpur (put any city), a standard lunch will cost you at least Rm10 per pop, and that is if you forego the occasional fancy sushi and dimsum joints which will definitely set you back another Rm 50 per person/per visit, and don’t even tell me you don’t have Starbucks once a while.

Usually, younger women have good skin and requires less maintenance and prep work on their faces, so makeup usually lasts longer. But younger women have serious Korean women skin envy, therefore besides the usual Mascara, lip tints, primer, foundations and blusher(all liquid form), we spend quietly on products with a Korean soap opera actress face on it, and I can assure you those Jeju island face packs are not cheap.

A Myvi or a Swift is what I would like to call a startup car, cars which you can afford whilst the pay is not great yet.  Downpayment aside, I ballpark you monthly car installments at somewhere around Rm300-Rm500.  If you work and stay in the same area, minus the traffic jams and tolls, daily fuel will be around Rm5, monthly fuels will set you back at least Rm100, again, if you are lucky, we all know how traffic in KL is during peak hours, expect to burn money on fuels, ladies. (Calculation is based on Brent under $40/ barrel, current it trades below $30/barrel, so lucky you!)

Women go crazy on shopping, and retailers know this. Women, whatever their age, are captivated by things of beauty easily and some are willing to pay for it at exorbitant price. Peer pressure, alongside constant reminders from social media made women the self-conscious persons that we are, and we are secretly ashamed of it (some are proud). Blame it on Gigi or Kendall or Kate Spade or Topshop, but they did not open your purse for you when you splurge.

“I wanna be a Billionaire, so freaking bad. Buy all the things I never had. I wanna be on the cover of Forbes magazine, smiling next to Oprah and the Queen.”

                                                                                                                        -Bruno Mars, “Billionaire”

So, where did we go wrong?

   1. Not living within our means

This is usually easier said than done, with the existence of credit cards, many of us swipe at will and end up with deficit balance at the end of the month. AKPK (Agensi Kaunseling dan Pengurusan Kredit) last year quoted that 47% of young adults aged 18-35 faced bankruptcy, with the main reason being spending beyond their means. Under court rule, you will be declared bankrupt with debt over Rm30,000. Being mollycodled since young, most young adults are used to getting what they want since they were kids. Growing up into adulthood, once the paycheck kicks in, discipline took a backseat and most are willing to part ways with their money early of the month over lavish items. If you have an income of circa Rm2000-Rm3500, you know where you stand with your financials, and splurging beyond your means will definitely add you to the 47% of “the young and reckless”.

2. Wrong allocation of money

If your monthly expenses follows the above chart, whereas you did not allocate any portion for savings, unless you are very happily married to a prince named Harry or a man called Zuckerberg, I would suggest you change your money allocation, and change fast. There are various reasons why we need to put a stash of our money for savings i.e. retirement, medical treatments, children education, open new business, purchase properties et cetera, so having discipline in managing your finances is crucial. I won’t even suggest you to become a full on wallstreet trader or investment gurus, but if you are able to set aside 30%-40% of your monthly salary for savings purpose, you are already helping yourself a great deal. How do you do that? I will deal with this issue in my future post.

3. Remember your family

A lot of finance book and article fail to mention this, but as a child, it is important for you to allocate a portion of your salary for the people who have been supporting since you learned how to crawl. Many young people, put their needs and wants first, and put their family second. It is never about how much your parents earn, it is ultimately, what you as a child can offer as a repayment. If you think they won’t accept your money, splurge them many other ways! Buy them travel tickets, treat them to meals, bring them to the theatre, whatever they fancy! If you are stingy with your own family or parents, there will come a day when you regret not spoiling them enough when they are still alive, and I have seen some examples.

4. Not succumb to pressure

Are you pressured into buying the very purse you are holding right now because your friends are buying them? Hey girl, if you can afford it, by all means, go ahead. If you can’t, and you still spent many a restless nights dreaming about the smell of the leather and the exquisite design, what you should do is start saving bit by bit for your big purchase! But if you are not big on savings, and you haven’t found out where the rainbow ends, do yourself a favor and cut that plastic card into half right now. The reason why you should take this drastic move is that, you know all too well, that once the purchase is done, you will only appreciate what’s in your hand for a few moments, and before month end, you will be salivating over the new Spring / Summer collection. Humans are such greedy creature, you know you can only afford a Kate Spade, but you want what you can’t have or afford, you want a YSL.

Am I good at managing my own finance (since I blab so much about this)? I would say I am learning to, and so should you. The very purpose of me emphasizing this is not to be a smartypants, but to give an in depth look into how we, as women, can improve our life through our finances.  I am no finance guru, but I want to embark this journey with all my readers.

Thanks for reading.