The Best Personal Finance Decision Mr Budget Made In 2019 – Expenses Tracking

Regular followers of Mr and Mrs Budget will know that we track our expenses monthly.

We have been publishing our monthly expenses since the start of this publication and if you have missed it, here’s our expenses for October, November, and December.

Many might find that tracking expenses is a tedious thing to do, especially you need to log down every single transaction that you spend on a daily basis. Mr Budget, like many many Singaporeans or Malaysians trying to sort out his life, tried to start tracking his finances long time ago, and always failed to keep to the habit. 

I remember my first attempt of daily expenses tracking was in university back in 2010, when I needed to know where I spend my money on. After tracking for a few days, life caught on and I soon stopped tracking because I didn’t understand why I need to track my finances, and told myself that since I have no control over my finances, there was no point in tracking.

After all, every month I would always end up spending everything in my bank account.

I tried again when I first entered the workforce in 2012, but because I was living pay check to pay check, with an entry salary of S$2,400, all of my salary would be used up for my rental payment, school loan payment, and my daily expenses.

To me, there was no point in tracking my expenses too because the entry would be the same – I would spend S$500 on rental, S$500 in school loan payment, S$500 on food, and the rest would either be brought over to next month, or will be spent indulging on entertainment.

It was only in mid 2018 when I finally sit down and told myself that I need to know where my money is going and only with these information can I optimise for my cashflow. 

This was also due to the fact that all financial gurus out there included expenses tracking as one of their mantras – surely all of them cant be wrong?

Here’s the first annual expenses report after I started tracking my expenses:

Expenses CategoryTotalAverage%
Meals$4,861.24$405.105.05%
Transportation (mrt)$795.04$66.250.83%
Entertainment$1,278.51$106.541.33%
Groceries / Home$9,931.37$827.6110.31%
Shopping / Cloths$1,525.40$127.121.58%
Phone Bill$687.20$57.270.71%
Utilities$495.25$41.270.51%
Insurance$2,720.51$226.712.83%
Parents$2,574.66$214.562.67%
Income Tax$1,415.72$117.981.47%
Hair Cut$323.20$26.930.34%
Digital Subs$302.51$25.210.31%
Malaysia Mortgage 1$10,222.20$851.8510.62%
Malaysia Mortgage 2$1,308.91$109.081.36%
Rental$2,125.00$177.082.21%
Singapore Mortgage & Home Renovation$16,102.11$1,341.8416.72%
Travel$2,575.48$214.622.67%
Hometown Expenses$1,305.12$108.761.36%
Wedding$13,758.50$1,146.5414.29%
CPF / EPF$8,000.008.31%
Others$13,976.99$1,164.7514.52%
Total$96,284.92$8,023.74100.00%
Mr Budget 2019 Expenses Table

Looking at Mr Budget’s 2019 annual expenses, the highest expense categories are our current Singapore home related expenses, taking up a 16.72%. This is on the high side as we just moved into our new home this year and incurred a one off renovation and move in expenses. 

This is followed by our wedding expenses, which Mr Budget spent almost S$14,000 on. This is another one off item and the cost is cushioned by a one off receipt in January from our wedding angpao received. 

Another high expenses category is the monthly mortgage payment of Mr Budget’s condo in Malaysia, which will be done soon, earmarked for investment purposes. 

Our home and groceries expenses is also another high expense category as both Mrs Budget and I are still purchasing new stuffs for our home occasionally and we are figuring out our co-living expenses. We foresee this to ease a bit this year in 2020.

Surprisingly, Mr Budget’s food expenses only makes up 5% of his total expenditure in 2019. We will be using this as a barometer to compare against our projected expenses for our retirement planning. 

While the overall expenses is high, eclipsing almost $100,000 of cash outflow in 2019, Mr Budget draw comfort in the fact that the high expenses categories are either one off items or are for asset building purpose.

These are the expenses paid in 2019 for asset building:

Asset Building ExpensesTotal%
Malaysia Mortgage 1$10,222.2010.62%
Malaysia Mortgage 2$1,308.911.36%
Singapore Mortgage & Home Renovation$16,102.1116.72%
CPF / EPF$8,000.008.31%
Total$35,633.2237.1%
One Off ExpensesTotal%
Rental$2,125.002.21%
Wedding$13,758.5014.29%
Others$13,976.9914.52%
Total$29,860.4931.01%

Minusing these, the actual day to day expenses such as meals, insurance, commute, groceries et cetera only makes up 32% of my total expenses in 2019.

With these data points, Mr Budget looks forward to comparing them with my 2020 expenses to see if there will be any improvements. I foresee that while bulk of the one off expenses this year will be channeled towards the asset building expenses this year, especially to continue servicing my mortgage responsibilities, we will see an overall reduction in expenses this year. 

For those of you who have not been tracking your cashflow, Mrs Budget and I really encourage you to start doing that. Once you get into a monthly habit of collating your expenses, you will continue to do that to find your spending patterns and with that, you are able to better optimise your personal finance and make data driven decisions. 

Happy tracking! 

Side note, do you track your expenses? What do you use to track them?

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Thailand Returned 300% More Than Singapore In Past 10 Years And That Intrigued us

While browsing around the web for news, Mr Budget came across these tables that I thought would be interesting to document it here.

The first compares the 2019 global market returns, ranked best to worst, with its 2018 return as a comparison. The second is global total returns for the 2010s decade.

Source

Some interesting notes:

  1. Saudi Arabia returned double digit returns in 2018 and 2019.
  2. Both 2018 and 2019 saw a negative return for the Malaysia market.
  3. IT, Consumer, Healthcare and Real Estate is still the biggest growth sector in the US, and probably applies to other economies too.
  4. In the past 10 years, Thailand and Philippines returned the most, charting a growth of 181% and 154% respectively. Singapore on the other hand – 63% while Malaysia is at 33%, and China 71%. 

Point number 3 is interesting, and when we look at our portfolio, most of our investments are also in the IT and Real Estate industry, and if there are any opportunities that arises from healthcare or consumer products, we will be taking a closer look at them. 

But what caught our attention was point number 4, that Thailand and Philippines has been returning good rewards to investors. We’ve occasionally heard about Thailand being a good stock market haven for investors, but we have never really paid much attention to it. Of course, how can we do that when there are just so many things for us to monitor, especially since we are investing in the Singapore market, the US market, and are looking at the Hong Kong Market now. 

However, the lack of time shouldn’t be an excuse for us – looking at the total returns over the past 10 years of Thailand vs Singapore, Thailand returned 300% more as compared to Singapore! 

We also did a quick check if Saxo or DBS Vickers, both the brokers we are using, to see if they allow us to trade the Thai stock market, and to our surprise, they don’t allow us to do that!


Source

It seems like we may soon need to open up or change another brokerage account! 

Are there any readers who have traded the Thai market? Where should we start at? 

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Moving Out Of DBS Multiplier Account

Hi all! We are probably a bit late but Happy New Year to everyone!

As mentioned in the last update 2 weeks ago, Mrs Budget and I have been busy with our wedding and now that it is over, we are back with our regular publishing schedule.

A few key things in the financial space happened over the past 2 weeks, and we wanted to share our thoughts on them.

Firstly, the change in the DBS Multiplier account. Many other financial bloggers have shared about the changes, but basically the most important changes are that your dividend no longer counts as the ‘investment’ category and if you only fulfill one category of the required spending, the interest is only applicable up to S$25,000.

I guess too many people have been abusing the bond ladder method to get monthly dividends when the account was announced, and now DBS finds that the interest rate is not too sustainable.

We previously shared that our individual main account is the DBS Multiplier account. With the new change in the DBS Multiplier account, if I were to continue enjoying the current rate, what I will need to do is to ensure that I have monthly trades, or I start a regular savings plan.

To be honest, that’s a bit too much trouble for me. As much as I want to support DBS which I am holding some shares in, what I will be doing is to swap my main savings account to my UOB One account and will try to hit the 3.88% interest rate. Of course, I will need to make sure that I have more than S$60,000 in the UOB One account for the switch to make sense.

UOB One Account

Perhaps I should be picking up UOB shares soon too! 🙂

In terms of portfolio, both Mrs Budget and I did not make any trades last few weeks, and we will be waiting for any opportunities to deploy our capital as and when they come by. Nothing particularly stood out for us at this point but we will be sharing them if any trade happens.

We will be sharing our wedding related expenses in the next update so do keep a look out for that!

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Year End Note From Mr and Mrs Budget

The year is coming to a close soon and Mr and Mrs Budget will be busy attending to our year end catch ups as well as our upcoming wedding.

As such, there won’t be any much articles and updates coming for the next 2 weeks. 

As per our annual habit, we do our annual reconciliation and look back at how we did financially this year and then chart down some actionables for us in the new year.

For Mr Budget, 2019 has been a great year in the personal finance side of things. Mr Budget’s net worth grew 87% from S$153,000 last year to about S$285,000 this year.

The main source of the growth is from his salary and bonuses, which would be case for most Singaporeans at our age. 

For investment wise and dividend wise, investment capital gain was roughly at S$7000, while dividend collected for the year is at S$2140. 

One interesting thing to note was that, the dividend collected this year was more than doubled from the dividend collected last year (S$1065). This coincide with the fact that Mr Budget doubled his Singapore portfolio from S$35,000 last year to the current S$77,000.  This is mostly due to capital injection as the overall portfolio only performed 6-7% in terms of IRR. 

Item20182019Change
Net Worth$153,000$285,000+87%
Singapore Portfolio$35,000$77,000+106%
US Portfolio$46,000$45,000-2%
Dividend Collected$1,065$2,140+101%
Summary of Mr Budget’s 2019 finances

One of the biggest thing for Mr Budget this year was that, we have very high variable expenses. My total expenses this year is about $95,000, of which $66,000 consist of variable expenses. These variable expenses are:

  1. Housing renovation
  2. Wedding related expenses (bridal package, wedding dinner)
  3. Wedding Ring and wedding dowry
  4. Travelling expenses

Other fixed expenses like mortgage payments, income tax and utilities will still be the same expenses category that we have to pay for the new year.

The good thing is that, these are all what I call life milestone expenses, and would be a one off expense. For 2020, I don’t foresee any big expenses that we will be incurring, so I am really looking forward to a year of wealth building. 

So for 2020, here’s what Mr Budget expect to be doing:

  1. Increasing Mr Budget’s Singapore portfolio to at least S$110,000 via capital injection and portfolio gain / loss
  2. Continued annual S$7,000 contribution to CPF SA Account
  3. Net worth should be hitting S$350,000
  4. Reduction of annual expenses from current S$95,000 to a more manageable S$60,000. 
  5. Start renovation for Malaysia property and then rent it out for rental income to balance off the monthly mortgage payment

Wow typing these out and reading it makes me realise that these are boring stuffs – but I guess this journey is a slow and boring process. Hopefully we can hit our 1M mark sooner so that we can move on to do more interesting things in life. 

For Mrs Budget, she only started tracking her net worth and expenses this year, hence there are no year on year comparison. However, this year, her net worth grew from S$186,000 in January to S$250,000 in December, registering an increase of 34%. We will be able to do a year on year comparison starting from next year onwards.

For Mr and Mrs Budget, you can expect us to write and share more on the following topics in the new year:

  1. Our regular updates on investing with roboadvisor Syfe
  2. Our financial preparation towards having our first kid
  3. Our portfolio updates on which counter we are buying and selling along with the quick thought process behind them
  4. Our thoughts on living expenses, cost of living and salary matters
  5. More Q&A sessions with Mrs Budget
  6. Managing finances as a couple

Thank you all for following our journey so far!

Although we have only starting writing in October, we have reached over 40,000 Singaporeans to date, and hopefully by this time next year, we would have reached 400,000 Singaporeans! 🙂

In case you missed them, here are some of our best articles to date:

The Ideal Minimum Salary Range For 30 – 35 Years Old Singaporean Is Between S$3,500 To S$4,500

Civil Servant’s 0.1 Month Bonus – What It Means And What Are We Doing About It

At 30 Years Old, Your Monthly Salary Should Have Been S$2,600 For You To Feel Financially Secure.

What Is The Ideal Stock Amount To Buy For The Brokerage Fees To Make Sense

Our Portfolio Is Probably Lacking A Roboadvisor Component – Here’s Why

We also want to welcome our new subscribers TWK, Credit Counselling Singapore, Kah Bian, Ritesh, Chin Poh, Alliance, Valerie, Nooruddin for following us. And to all the commenters who are actively sharing your thoughts on our articles, we want to say we enjoy reading and learning from them, so do keep it up. 🙂

Have a great Christmas ahead everyone!

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Penny Wise Pound Foolish

One of a mini scolding from Mrs Budget to Mr Budget recently knocked some senses into me. 

While preparing for our wedding, Mr Budget overspent on the booking of the bridal car. And it is by a large margin. This was done as Mr Budget did not do much research and just wanted to get the line item over and done with.

Another factor was also caused by the fact that not a lot of bridal car companies replied and that the cars he wanted to book was all unavailable on the day of the wedding.

Hence when one finally got back, he decided to confirm the booking without consulting Mrs Budget. 

After Mrs Budget asked, she was shocked to know the unreasonable price. She gave a mini scolding to Mr Budget as there are a lot of other options to look for bridal car booking. 

I think this serves as a very good lesson for Mr Budget – while we scrimp to save S$10 – S$20 on other stuffs such as price haggling with supplies to give discounts of S$5 on Carousell, I might fall into the trap of not looking at the bigger picture, such as splurging unnecessarily on the bridal car. 

Reminds me of the saying – penny wise, pound foolish. 

And I thought this serves as a very good reminder here. Some other potential case of being penny wise, pound foolish:

  • Trying to buy big lots of a particular share to save on the stock brokerage fee without doing in depth study of the stock, which may cause a capital lost.
  • Eating cheap and unhealthy food to save money but end up spending more when health takes a hit
  • Actively signing up for many cards to earn the welcome gift, but end up paying more when the annual fees are charged

Are there any other examples that you can think of?

Thank you Mrs Budget for knocking some sense into me.

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Upgrading To A Bigger Condo Doesn't Make Much Financial Sense

Mr Budget came across a recent article which resonated a lot with him.

Lizardo shared this in a recent article titled “angst of replacing home”:

“A 17th floor condo at 1292 sq ft bought 12 years ago was $501,000, and is roughly worth $950,000 now. That sounds like so wow. BUT, to get an equivalent place, the price tag appears to be $1,300,000 for a 5-year resale condo on a mid-floor, with only ~1000 sq ft!  That’s a differential of +$350,000 for a smaller space.”

One of Mr and Mrs Budget’s plan is that we will be upgrading our current condo to another new place (can be private or HDB) in the future when we have more than 1 kid. 

Our current place is 872 sqft and comes with 3 bedrooms, one of which is the master room, the other one is a guest room, and another is a small room which we double up as a study room now because it is too small to fit anything larger than a single bed.

Hence, it is not feasible for the house to accommodate more than 4 person if we were to get a helper next time.

Based on our timeline, if we were to upgrade our current place in 5 years time from the current 872 sqft to something like 1100 to 1200 sqft feet, the price of a resale condo will be at S$1,500,000 – S$2,000,000 then, and even higher for new condo projects.

Here’s the rough value estimation of the condo we are living in now:

Condo ValuePSF872 sqft1100 sqft1400 sqft
Price In 2015$895.00$780,000.00$984,500.00$1,253,000.00
Price In 2019$1,261.00$1,100,000.00$1,387,100.00$1,765,400.00
Price In 2023$1,778.00$1,550,000.00$1,955,800.00$2,489,200.00
Projected Value

Although the price of our condo would have appreciated in 4 – 5 years time, if we were to move to another condo at 1100 sqft, we will probably need to top up at least S$400,000 – S$500,000.

And finding that additional S$400,000 to S$500,000 is not something that is easy, and will affect our retirement planning in a substantial way. We can fund that via a higher loan quantum, but that will increase our debt servicing ratio. 

Bigger sized private properties are really getting very expensive, and we may be looking at public housing and renovating it into something comfortable, should the time come for us to move to a bigger place. 

Anyone has any experience in terms of housing upgrade from a smaller unit to a bigger unit? How do you work out the finances? 

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Our Portfolio Is Probably Lacking A Roboadvisor Component – Here’s Why

Earlier last week, after reading our post on the ideal minimum salary range and the thoughts on retirement, Syfe reached out to us to have a chat with us on our financials.

We subsequently agree and met up earlier today. 

If you didn’t know, Syfe is a roboadvisor which adopts a hybrid model – there is the automated monthly investment portion and it is complemented with a human financial advisor.

From a methodology point of view, compared to the other roboadvisors in Singapore, Syfe believes that your investment should be more about managing its risk and if that is properly defined, you are able to see what your potential returns (and subsequently your portfolio allocation) are based on your acceptable risk.

This approach is in line with Mr Budget’s view towards investment – the first step to investing is to know what is your risk profile.

For Mr Budget, I am a rather impatient guy, and has a relatively high risk profile. 

Hence when I first dabbled into investment, my first stocks that I bought were all US stocks. US stocks is probably one of the investment product with the highest risk (daily fluctuation of 1-5%). With an understanding that my investment journey will be at least 10 to 20 years old, I am more focused on building my capital now. 

US stocks also fits me the best because it can provide a decent capital gain in a short period of time (although this can go both ways). I can also accept the higher risk that comes with this.

For other products like ETFs, local REITS et cetera, you can only see the return in 5-10years for the compounding interest to kick in. 

So this forms the fundamentals of my investment strategy: 

  1. For the first 2-3 years, aim for capital gain via higher risk instruments
  2. With the capital gain, invest them into relatively safer instruments such as REITs and subsequently fixed income or bonds.
  3. Rinse and repeat, and at year 5 – 10, I should have built up a strong portfolio of REITs as well as holding on to some of my US stocks which hopefully have become multi baggers by now

For Syfe, the process is largely similar, you identify your risk profile, and then you will be allocated a recommended portfolio based on the maximum drawdown you are able to take. 

So for example, taking the self assessment test on Syfe, my risk profile will be the highest, and I am recommended the high risk portfolio with a potential drawdown of 25%.

This portfolio has a 100% equity allocation.

One of the pointers brought up by Syfe’s head of investments was that, for DIY investors (like us), how often do we beat the index?

More often than not, we can’t, because there are just too much information out there, and that we might miss out on some opportunities because we are caught up with other aspects of life. 

And that is true, if I look at the returns I generated for my portfolio over the past few years, I have not beaten the index at all. So perhaps, our portfolio has been lacking a roboadvisor component which serves as a “professional managed” portion of our overall portfolio.

For a while now, we have been looking to try out roboadvisors, and do monthly regular investments into these platforms and let professionals manage a small portion of our portfolio for us. 

Who knows, with the addition of roboadvisors in our portfolio, our overall portfolio might enjoy higher returns.

The outreach by Syfe is timely since this has been in our mind for a while now, and we will most probably be starting a regular investment into Syfe.

This post is not sponsored, and nor was there at any point did Syfe ask us to help promote the brand, but here are some personal thoughts which I like about Syfe:

  1. Relatively low fees (0.4% – 0.65%) + 0.15% ETF fees, with no withdrawal fees, no trading fees and no entry or exit charges
  2. The investment methodology is in line with my belief
  3. Investment team is definitely more experience than I am
  4. Aggressive portfolio allocation is investment in not just companies that I am similarly following (US high growth equities), but also in other industries I am not familiar in: utilities, consumers, energy etc. Would love to have some exposure to these areas which I am not familiar in.
  5. Access to financial advisors to periodically check in on any gaps that we may have in our financial planning process

To me, the last question I ask myself is, what is the risk for this other than market risk, which I am also exposed to. The biggest risk is that Syfe closes down, and that we will lose all of our capital. But that is minimised by the fact that they are regulated by MAS, and that they have several high profile backers. Hopefully that doesn’t happen.

So for Mr and Mrs Budget, we will most probably start to park a monthly amount to Syfe and use that as our emergency + retirement hybrid fund.

When we start doing that, we will be tracking the monthly investment gain from the portfolio and share it with you guys. 🙂For now, Mr Budget will have to go back to number crunching mode to see how much we can invest and what will the impact be towards our financials projection before committing an amount.

If you are looking to sign up for Syfe, here’s a referral code for you: SRP6X8B8Y

If this referral code, you can get $50 when you invest S$10,000.

Are you investing in any roboadvisors? 

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