I have my parents to thank for instilling in me a self-imposed, non-negotiable rule to save a portion of every set amount of money I get — whether it’s an unexpected gift from an aunt on a holiday, a check from my previous employer, or the salary I earned. I was able to reach financial milestones even back when I was young. I didn’t fully even realize that until now, in hindsight.
When I was in college, I was incredibly lucky to get a scholarship to study abroad, and it was the first time I ever got to travel abroad by myself. That was also the time when it dawned on me that I had money to spare and that I could use that money to travel with friends on some weekends. Before then, I hadn’t been truly able to pinpoint that feeling of not needing to worry about money because I had money. But when I came back from that exchange program, I had almost no savings left, and I had to start from scratch. It was honestly harder to start then because of the stress of resuming my normal, slightly-less-exciting life. I gradually realized that whatever went into my savings was actually the cost of my present peace of mind.
When I started my full-time job after graduating from college, I finally had a more stable source of income. Every payday, I would move a significant chunk of my salary to a separate savings account — to be momentarily forgotten and to be lost to my present self. I saved like crazy. It helped big time that I was working in sales, earning a commission. I was able to treat my family out to dinner, got to fancy exercise classes with my friends, pledge a monthly amount in support of my advocacy, and purchase 2 to 3 pairs of brand-name shoes. All these expenses are made only after a percent of my money has been stored elsewhere, out of sight and out of (easy) reach. I was comfortable seeing my payroll hit zero because I know that money has been spent well, on my savings and others.
As I started to transition jobs over the months and figure out all of these financial decisions (with much guidance from TFD), I decided to open a retirement fund, which is important because of its inaccessible and strictly-off-limits nature, at least for a while. Because I started maintaining this, the money that was going into my contingency fund slowed down a bit.
Cut to what happened last month — when I spent the most I ever had in a 30-day period. Here is a list of those experiences/things I had spent on:
- My mom’s dream recliner couch — for my parents’ house.
- Half the cost of a brand-new fridge — the cost is split between me and my sister, who I live with. Our old fridge served us well for six years and has moved on to a better place.
- A portion of the cost for one hotel and one Airbnb — my friend from Shanghai visited me and we traveled to two different cities together, splitting the cost of our accommodations.
- My shockingly huge Uber bill (for all those times I traveled with my friend) — thankfully, we also split this along the way — him paying me in cash after every ride.
- Half the cost of hotel accommodations for my family for New Year’s Eve — split with my sister.
- 25 Christmas gifts for 25 friends and family members.
- Other holiday-related purchases for myself.
The exact total amount of all my out-of-the-ordinary purchases is 100% overwhelming — something I’m not at all comfortable seeing. I understand that this is all coming from a place of privilege. I’m lucky came from a financially responsible family who valued what they had, never once taking for granted any resource they had access to. That value has been passed on to me. I also have a stable enough job that allows me to plan my expenses ahead. I am very grateful for these and I am grateful to my parents who invested in my education, my sister who has been an extremely reliable housemate, my past self for learning to control my then-spending-urges, my employer for employing me, and God (or the universe) for the things that are beyond my control.
Needless to say, I was able to afford all that by dipping into my contingency fund like crazy.
Here are some of the things I learned:
- I realized that it’s important to know what it is you are comfortable paying, and make peace with it. Saving doesn’t have to be about depriving yourself. It’s about being honest with yourself, and occasionally saying no to activities that will put a strain on your financial goal.
- For the most part, I don’t like being surprised. So I made it a habit to pre-check everything online for the sake of my mental health before actually making any purchases.
- When you want that experience, you have to pay for that experience. When you want a service, you have to pay for that service. It is what it is. Accepting that relieves some of the mental and emotional burden of spending money.
- If you are iffy about saving because you like to live in the moment, here’s my advice: your peace of mind in the moment is what you’re paying for when you save for your future.
- Finally, it’s totally okay to spend your contingency fund. That’s why you saved it. But know that there’s a time to spend and a time to save. As for me, it’s time to save again.
Krissa Magdaluyo aspires to be a novelist and a social entrepreneur, occasionally dabbling in standup comedy. She is still trying to figure out how to be all that. In the meantime, she is a Project Manager by profession and is looking for ways to contribute to the growing startup ecosystem in the Philippines.
Image via Unsplash