luxury cars singapore
Who’s driving these luxury cars? The answer may surprise you.

It’s that of year again when we, with all our good intentions, list all the various health, self-improvement, and financial goals that we aim to achieve in the coming 12 months. Each year, the same New Year’s resolutions appear – make healthier food choices, exercise regularly, spend less, save more – yet most resolutions are broken within the first 2 weeks. It seems that we all know exactly what we need to do, but the knowledge-behavioural gap is wide, and translating what we know into actions is where we fail. So here are some ways in which this gap might be lessened, at least when it comes to meeting our financial goals.

  1. Stop Acting Rich. According to Thomas J. Stanley’s book, “Stop Acting Rich: And Start Living Like a Real Millionaire“, 86% of all luxury vehicles are driven by people who are not millionaires. How much do most millionaires pay for haircuts? $16 (And no, I didn’t forget to put a 0 at the end!). Being wealthy means that you have a lot of money saved (a high net worth), but most people confuse being wealthy with spending a lot of money or making a lot of money. The vast majority of high net worth individuals are extremely frugal, spending only a mere fraction of their income, and making sure that most of what they spend gives them a return. The whole notion of “rich people” in our popular culture is really distorted. Many of the so-called rich are just “wannabes”, those who are financially poor but who spend recklessly and amass great debt to maintain a facade of a lavish lifestyle.
  1. Track Your Spending. How do you know what the best route is to your destination if you don’t know where you are right now? Unfortunately, most of the people who share their financial goals (destination) with me don’t have a clue where they are now with respect to those goals. They give arbitrary figures like “I want to have a net worth of 3 million” when they have no idea how much their net worth is currently. It all starts with tracking your spending – every cent of it. You need to know where the monetary outflows are, and how much they account for your overall spending. There are a lot of free expense tracking apps to help you do this. I personally use a desktop program which supports multicurrency accounts and produces monthly reports. It gives me useful information such as how much I’m spending on groceries (3% of total expenses) versus eating out (2.6%), how much more I’m paying for public transport ever since the rate hike, what purchases produced unusual spending patterns, and just how much “petty cash” I spent here and there added up to be (usually people spend more than what they think!). By tracking your expenses, you can also more easily detect fraudulent purchases or fees.
  1. Give Yourself a Raise. By spending less, you are essentially giving yourself a raise. It’s all about framing and shifting perspectives. Instead of thinking that you are depriving yourself when you don’t spend, think about the benefits. For example, don’t think about foregoing that $1000 Channel handbag, think about how you just saved 45 hours of work (based on $22/hr wages) or how you don’t have to worry about getting it stolen or damaged. Similarly, don’t think about giving up donuts, think about how you are adopting a healthier lifestyle and how you enjoy having more vitality, energy and longevity.
  1. Delay Gratification. If there is something that you really want, whether it’s a handbag, a handphone, or a holiday, delay buying it for at least a few days or a few weeks. The desire to have the item may wane over time, and by delaying, you condition yourself to think more carefully and consciously about your spending and to not buy on impulse. Everything in our culture and society now is instantaneous, from streaming movies to booking a taxi, but studies have shown that the faster things come, the more we impulsively react, the more money we spend, and the higher our expectations. It then becomes harder and harder to please us, as we lose patience easily and our attention spans shorten. By delaying gratification, we exert control and recalibrate our expectations and sense of entitlement, while increasing our happiness and gratitude.
  1. Ditch the Debt. Debt is not your friend. Neither is the banker who is selling you debt. Chances are, that banker is in a lot of debt and only “looks” like a millionaire. Never use debt just to keep up an unsustainable standard of living. It used to be that the only way to have more possessions was to work for them. Now, you can just borrow and go into debt to obtain just about anything you desire. And it’s easy and readily available, as opposed to hard work. But every time you swipe that card and take out a loan, you are essentially borrowing against your future. You are trading the immediate possession of an item for future time and work. Therefore, you must be very careful and think twice before using debt to enable you to live a certain lifestyle.
  1. Pick Different Heroes. One of the reasons why I think it’s hard for people, especially the younger generation, to adopt a frugal lifestyle is because wealth, or rather, displays of “wealth” are ubiquitous in Singapore. Everywhere you look, there are ads and signs screaming “buy me”, “must have”, “you deserve this” and “you will be happy, famous, smart, popular, etc. if you buy this”. Everywhere you go, there are luxury cars, handbags, watches and other material goods. And on television, all you see are the glamorous celebrities and socialites. Those who are high-income earners and high spenders are “worshipped” and become role models (as opposed to those who are frugal and save their income). The fact is that this type of lifestyle marketing works. This is how businesses and brands make you eagerly part with your money. There are very few ads, commercials, or news stories about being financially responsible or living a healthy, sustainable lifestyle. The main goal of such advertisements and shows is to tell you that your life is not complete without x-y-z. This is why you must pick different role models. I recently was part of a youth focus group that investigated why some young people have no interest in being economically or environmentally responsible. Many of them noted that they were given mixed messages and a certain level of hypocrisy from the older generation. We must choose different role models, and at the same time, be aware that we are also being watched and judged by the younger generation as role models ourselves. To me, I feel a bit insulted whenever someone like Michelle Obama talks about hardship when she also parades around in one-time-wear outfits that cost over S$16,000, more than many people’s annual salaries. I remember reading that the late Mr. Lee was extremely frugal, having kept the same furniture for 30+ years. He was open about his frugality, and in fact, attributed some of Singapore’s success to the government’s frugality. I hope that this new group of leadership in our government will also make good role models for our younger generation. I hope that there will be a good handful of them that will not be seen as “ivory-tower” dwellers, but as humble, frugal folks who share the same struggles and concerns as everyday Singaporeans.
  1. Keep the Future Nearer to You. Too many times I hear the phrase “but the future is so far away, there will be enough time.” I also commonly hear the phrase “time flew by so fast, like in the blink of an eye.” The future does seem quite far, until you realise that another year has gone by faster than the last. The word “future” sometimes gives the impression that it’s a long ways from now. Even a resolution that is to last for an entire year can seem daunting. So why not make goals that are much nearer in time, like monthly goals, or quarterly goals? Maybe start by making a January resolution (e.g., I will track my expenses for a month), then a February resolution (e.g., I will try to cut my expenses by 5% as compared to the last month), and so forth.

6 comments on “Why Money Resolutions Fail”

  1. Hello
    I recently found your website and I love your ideas for frugal living! Reading this article above (budgeting New Years resolutions) you mention about role models for frugal living. I guess this is what I was looking for too in coming across your blog. I wonder have you found other role models that you follow that you might share? Eg. On Instagram etc? (Ps I love your mention of mr Lee and his 30yo furniture!!!) your blog is refreshing to read! Thank you 👍🏼😀

    • Hi Anneli, Thank you so much for your comments! I recently was contacted by a contributor to another frugal living blog – Mr Money Mustache (http://www.mrmoneymustache.com), and he and I share very similar backgrounds and views. I especially like his post “If You’re Not Getting Rich in your 20s, You’re Doing it Wrong” and “Getting Rich: from Zero to Hero in One Blog Post”. Of course, people who read it may point out that the writer lives in North America, where the cost of living is much less than in Singapore. There are many ways to live frugally, some are very region specific. And this is one of the reasons why I decided to start my blog – to show others that frugal living is possible here and that there are many resources in Singapore to help us to live comfortably, purposefully and joyfully, while also living well below our means. I personally haven’t found a local role model who openly advocates frugal living (there seemed to be a lack in this niche, which is another reason why I started blogging), but I still hope that one day there will be such a person in our government (preferably a minister).

      • Thanks for replying. mr money moustache definitely seems to be quite a hard core frugalist and his discussion of convenience and wastefulness as lifestyle choices undeniably are a source of stress in life. There’s a lot to read there. I notice that “simple living” and decluttering are Generally topics that many people will warm to, but frugality itself is not exactly a fashionable topic of conversation!! So far I have found your blog to be a great source of inspiration. Also there is a podcast I came across last year, but they don’t seem to get quite as far as advocating frugal Living explicitly http://www.slowyourhome.com/the-slow-home-podcast/

  2. What you have written is simply so true. I see couple of friends around that are not earning alot but are spending way above their heads. Awesome post!

  3. This happens to most of my friends including myself.. We always discuss about our “plans” for the future, but in the end, we are always spending what we should be saving. I must admit it is tough to control our expenses, especially when we are young and playful.

    Nonetheless, it was a good read, makes me realise the importance of how we should live our life. I will share it with my friends too!

  4. What you have written above definitely speaks for majority Singaporeans. However, I feel that some of the factors that caused this are such as environment we are living in, the high cost of livings and many more. Nonetheless, great post!

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