Many people give advice on how to save money. Two years ago, our beloved Lau Ming-wai, son of property developer Lau Luen-hung, gave youngsters some advice on how to save up to buy a flat. “Go less to the movies and travel less to Japan,” he says. I’m not the Chairman of Commission For Youth so I have no place to give advice to young people. But what I can do is tell you how I manage my finances.
I don’t buy what I don’t need
I only have one golden rule — I don’t buy what I don’t need unless I really want it. I don’t even have a budget. I don’t allocate a certain percentage of each pay cheque to save up. I don’t do a spreadsheet and list out all my expenses. I simply only buy stuff that I need (e.g. food, groceries, toilet paper, detergents etc.), pay for services I need (e.g. electricity, water, gas, phone bills, etc.), and save everything else. It’s just that simple.
I differentiate “needs” and “wants”
I need necessities like soap, detergent, toothpaste, etc. But I don’t need to go to Japan or Korea for vacations. I do enjoy going to the movies if there are certain ones I want to watch. Yes, I do need to eat to survive, but I prefer buying groceries and cooking over eating out because outside food is so unhealthy. I try cooking 2-3 nights a week if possible. With friends, I invite them over for a homecooked meal from time to time.
I choose for quality that lasts
In my experience, buying quality saves money because they last. By quality, I’m not talking about brand. Quality things, like watches, wallets and belts, last for years. Good watches are timeless and last a lifetime. There’s a misconception that tailored suits are expensive. Suits are as expensive as the material they’re made of. My suits are tailored and are less expensive than overpriced “luxury” brands that charge a premium.
I understand that in the commercial world, you need to be well-dressed and presentable to your clients. But being well-dressed doesn’t mean you have to wear brandnames. It just makes you look obnoxious. Well-dressed simply means your clothes suit you well. The real question is a matter of desire. I have no desire for things that don’t improve my quality of life. I don’t need the latest iPhone to prove my worth. Flashy things simply detract from my real worth.