Wednesday, 1 February 2017

Spending Habits

(image credits:

I pondered about this as i bought my cup of KOI tea (for those of you who are unfamiliar with this, it is a chain of shops which sells "premium" bubble tea, aka tea with tapioca balls) as per usual today.

I have been drinking a cup of KOI tea nearly every day since they opened their stores on our sunny island. Thinking back, instead of "wow, I loved every cup of KOI tea", my first thought was "wow, I wasted a lot of money". I do know of others who also has bad spending habits, be it a daily cup of overpriced tea or dining daily at expensive restaurants, and I believe this is very common in society nowadays.

Let's now move on to the tangible aspects of the discussion, using my case as an example:

A standard cup costs about $3.50
There are 365 days in a year
If someone were to buy a single drink daily, they would have spent: $3.50 x 365 = $1277.50 by the end of the year.

It is really difficult to include in the discussion intangible benefits and to churn out some value buying the drink would confer; e.g. "increase in productivity", "brings about relaxation" which is arguably true as it is after all something people enjoy. Or they wouldn't buy it right? So we would be assuming no intangible benefits at this point in time.

Lets say we invest the $1277.50 spent yearly into a fixed deposit or savings bond with a coupon rate of 1.2% per annum, with the interests reinvested. And lets also assume that the rate remains unchanged (which is unlikely) but its not the point of this discussion.

After 5 [+1: I've included the duration of the final (5th year) whereby the 5th interest would be paid out for the investment on the 1st year] years we would have:

$1277.50 + $12.78 + $12.90 + $13.03 + $13.16 + $13.29
+ $1277.50 + $12.78 + $12.90 + $13.03 + $13.16
+ $1277.50 + $12.78 + $12.90 + $13.03
+ $1277.50 + $12.78 + $12.90
+ $1277.50 + $12.78
= A hefty sum of money which could have been saved 😟

Now the point of this post or discussion isn't to tell you to quit your hobbies, or to stop what you enjoy doing, nor is it telling you to be extremely thrifty, nor to scrimp and save. The point is that we should all reflect back on our spending habits and ask ourselves; "is it all worth it? Is there anything that I should have/wanted to achieve now, but haven't due to these habits? Would I have done it any differently?"

Perhaps from these questions, you and I will be able to get answers eventually, answers which may guide us towards what to do next, and hopefully, it will be ultimately beneficial in contributing to our financial freedom in the future.

Till next time!

Best Regards,
A 😁

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