Victor-Fam.com

I still remember in year 2002, my attitude towards money is like this: “I earn some money, I spend it. I buy nice car, I buy nice electronic gadgets, I spend where ever I like. I don’t worry about the money. I can use my expenses to stimulate my earning power. The more I spend, the more I will earn.” Every months I hardly save any money because I spend all of the money.

However there are 2 things that has drastically changed my mindset towards money. First thing that has change my mindset towards money is some incident that happened a few years ago. I believe that most of today’s people know what is organization redundancy exercise. Redundancy exercise basically is an exercise run by an organization when they wanted to reduce their staffs head count. That can be cause by many reasons like downsizing, cut cost or when 2 companies are merging. Basically the company that I worked for are having some downsizing exercise and they are going to lay off about 50% of the staffs. Their target is to get rid of the middle management layer in the company. I was safe at that time because they still need technical people like me. I was lucky. However I witnesses a lot of my colleagues who leave. Some of them had been working for years in the company. They got some compensation for their leaving. But the compensation is not really a lot. Most of them have a family to take care of. It is tough for some of them.

The second one is after reading Rich Dad’s Guide to Investing. I finally understand what is wealth. Wealth is not about how much money you earn. Wealth is basically about how long you can sustain after you have lose your main income. Imaging if I lose my job in 2002. How long can I sustain? I would say less than 1 month. But that is still ok for me because at that time I am still young. It is easier for me to find a job. Further more I don’t have any commitment at all. Today if I lose my job, I can survice for around 6 months. I still have some time to look for my job. I have some house loan commitment. Not more than that. What about for a person who need to pay for their car loan, house loan, a few children’s education, family expenses. Do you think that saving is important for them? I would say definitely yes.

I decided that I wanted to improve my financial situation. I wanted to save more money. I don’t want to have further unnecessary debt. Down in the year 2002, I only manage to save around 100 or less per month. It is indeed difficult for me to start to save because my previous mindset had tell me to spend all my money. I know I have to start from small and persist from there.

Today I can save at least 1000 per month. My strategy is to keep my expense at the same level where my extra income will be either go into my saving or my investment. I try my best not to increase my expense level. I try my best to invest something that are valuable. I try my best to save a decent amount of emergency fund. I work hard to increase my income. Very fast I will be able to save at least 2000 per month.

I think a right mindset is very important towards your money. To change your mindset, it can be easy. But to undo the financial situation that are created by the wrong mindset may takes years. It takes 4 years for me to reach from able to save less than 100 to be able to save 1000 per month. Bear in mind that no matter how much you earn, you will have somewhere too spend it. Your expense level will always catchup with your income level. So be extra careful with your mindset towards your money.