How to Kick Ass This Christmas

Credit: http://www.flickr.com/photos/gimmeahug/4209857179/sizes/m/in/photostream/There’s a scene in Jurassic Park (which is my all-time favorite movie btw, sooo awesome) where the owner of the park, John Hammond, gives a tour of the velociraptor pen to a bunch of visitors. You don’t actually get to see the raptors – they’re hidden by thick foliage – but you do see a poor cow, strapped to a harness, slowly being lowered into the pen.

And then you see the thick foliage shaking vigorously, and hear the distressed cries of the dying cow over the unearthly shrieks of the raptors and watch the horrified looks of the visitors, and then… silence. The harness is extracted from the pen and you realize that it’s reduced to tattered little pieces of cloth.

Jurassic Mall

That’s kind of like what the mall was like yesterday. I went down to Raffles City to meet a friend for dinner, and for a moment I thought I was in the wrong place because it literally looked like feeding time at Jurassic Park. First, the place looked like it got hit by a meteor. There was stuff everywhere, and hordes of panicked crowds running around. Ryan from MoneySmart tells us that this is actually a devious psychological tactic to get us to buy more. (“Messy” is usually associated with “cheap”, even though the actual price will probably be your first-born child)

Then there were all these macho dudes all wandering into jewelry and bag shops looking slightly dazed, trying to figure out what to get for their girlfriends. One by one, they were picked off by sly-looking salespeople circling them like sharks before convincing them to buy another overpriced bag/necklace/diamond ring.

And there were the ubiquitous Christmas carols like, everywhere. Now don’t get me wrong – I love carols – but it gets really trying when you hear a pseudo-jazz band butcher Jingle Bell Rock for the 273rd time. Nobody else seemed to mind because they were too busy climbing over each other to claw their way to the sale rack at Robinson’s. They made the Jurassic Park velociraptors look like a bunch of fluffy little bunnies.

Have Yourself a Merry Overconsumerist Christmas

Christmas used to be awesome, dude. It used to be so full of anticipation and magic and laughter and joy. But those damn malls crept into the place where they store the Christmas love and decided to destroy the crap out of it. They taught us that we don’t need love and joy during Christmas; what we need is an iPad so we can play Angry Birds on a wide screen at home instead of spending time with our families.

The problem, as blogger Johnny B Truant points out, is that Christmas has become about forced consumerism, where we kid each other into buying things that none of us would normally bother to get for ourselves. Like I shower all year round with a $10 bottle of shower gel, I don’t actually need that $70 Body Shop gift pack consisting of Shea Shower Cream, Body Scrub and Beautifying Oil, topped off with an Ultra Fine Lily (what the heck is an “Ultra Fine Lily” anyway?).

And then I’ve got to reciprocate and risk my life battling the Jungles of Orchard Road to get you an ugly tie that you will probably never wear, except maybe at your funeral.

The Best Things In Life Are Free

But dude, I hear you say, it’s the thought that counts.

But as Truant mentions in the same blogpost, if it’s the thought that’s so important, why do we have to spend a whole bunch of money to buy stuff? That isn’t thinking, it’s buying.

The stuff that I love most comes really cheap, or absolutely free. Like lunch with good company (we can split the bill). Or watching old movies in bed. Or playing Taboo while drinking cheap beer and eating Red Rock Deli chips. Or a chillaxed Saturday morning run. Or a $4 iPhone case. Or helping to repost or retweet my blogposts if you’ve found them useful. 🙂

Love from friends and family, comfort food, and the satisfaction of knowing I’ve helped you out in some tiny way. That’s really all I need, and it wouldn’t change even if I had a million bucks.

How to Celebrate Christmas, FaReals

1. Let’s forget the malls and the stores this year, and the obligatory Secret Santa game where everyone gets weird generic gifts. Instead, use the money and throw your family/friends an awesome dinner party, a potluck, or a games night (copious amounts of alcohol optional, but definitely recommended).

2. Do something that you’ve never done before. My girlfriend couldn’t think of anything she wanted this year, so I’m offering to cook her dinner (which is a helluva big deal to me because I never cook. Hey, stop judging, I gotta start somewhere.)

Okay that’s just the basic – I’m sure some of you are already awesome like that. But if you really want to step it up this year…

1. Talk to your friends and family, or send out an email or a Facebook post. Tell them not to give you any gifts, but instead donate they money they would have spent to a cause you support like Project: Flight. (Started by fellow Penn alum Albert Pak!)

2. Do something awesome and make it fun. Today, I heard about a kid who spent $600 bucks buying ice cream for foreign workers in Singapore who might be spending Christmas away from their families. And how awesome is it to be Ice Cream-Giving Santa Dude for a day?

Your awesome project doesn’t even have to involve moolah – you could do something entirely silly like Improv Everywhere’s High Five Escalator. It’s not going to change the world, but at least you’ll be giving people a little sliver of happiness, which is what Christmas is really all about. 🙂

Think about it, and go DO it. Merry Christmas everyone!

The Guilt-Free Spending Account

So far, I’ve blogged a couple of posts about saving, and how you can completely automate it. However, in a seemingly about-face in my philosophy of prudent saving, my previous post was about spending extravagantly on the things you love. My friend Paul told me that it might be a tad confusing for everyone, so I decided to take the opportunity to clear the air, and sneak in a little tip on how you can spend on what you love, yet not sacrifice your long run savings.

I used to joke that I should create a charity called the “Buy Lionel a Porsche Fund” and I’d pester people to donate to ‘a worthwhile cause’ (hey, it’s worthwhile to me). Even though it’s pretty unlikely you could get people to donate to your charity, there’s nothing to stop you from donating to it. Here’s the crux of it – when your money comes in every month, it should be divided into three parts:

1. Your long-run savings (which would also include funds for investment, or your downpayment on your house, etc)

2. All those mandatory expenses (your rent, your mortgage, utility bills, phone bills, insurance, etc) that are annoying, but necessary to ensure you’re not a hobo.

3. Your Guilt-Free Spending Fund, which you can use to spend on whatever the hell you want.

The reason why I could afford to drop a thousand dollars on a dance trip to Europe without a single shred of guilt was because I took care of parts 1 and 2 first. Here’s how to do it:

First, decide on how much you want to save (more on this later – because this involves planning for your investments and your retirement. But for now, just pick a reasonable arbitrary amount and stick with it.) Next, take stock of all your mandatory monthly expenses. If you’re a single young executive, this exercise shouldn’t take you more than 10 minutes – just pull all your bills from last month and examine them for anything that’s recurring: your phone bill, insurance premiums, subscriptions, food, whatever. Most of them should be more or less the same amount every month. Then, add 15% to that for any unexpected expenses. (I call this my ‘Stupid Mistakes’ fund – more on this in another post)

Once your savings and expenses have been subtracted from your income, whatever’s left over automatically goes into your Guilt-Free Spending Fund. Now this is where you can draw your money from and spend the heck out of it on things that you love, whether it’s a trip to the Maldives, or watches, or shopping, or kinky sex toys (hey, whatever floats your boat). This is why I can afford to spend money on dance classes and not worry about retirement. Sure, maybe it’ll take you a couple of months to save up for that expensive trip, but once you’ve reached your target, you should have no qualms about spending it… because you’re worth it. (cue L’Oreal model flicking her hair and smiling)

Like my previous posts on saving, you can create a system to build your Guilt-Free Spending Fund, without ever having to worry about whether you’re spending too much or not. If you’ve followed the advice from my previous post, you probably have 2 accounts: a current (or checking) account that your salary gets deposited into, and a savings account. If your bank lets you partition your current account, then create a sub-account for this purpose. In Singapore, where I live, I don’t really know of any banks that let you do that, so I did the next best thing – I signed up for a POSB MySavings account. I chose this because POSB lets you transfer money to and from this account seamlessly and for free. Your interest rate in the MySavings account gets hit when you withdraw money from it, but since the money is not going to be there for very long (it’s meant to be spent, remember?), it’s not going to make much of a difference.

It then becomes very obvious when your accounts are segregated. Your current account is for paying off all your expenses, your savings account is for your long-term savings and investments, and your third account is for your guilt-free expenses.

You can then automate the building of your Guilt-Free Spending fund by setting up automatic transfers with your bank. Arrange for your bank to automatically transfer this amount into your third account on a monthly basis: Amount to transfer = your income – [(your expenses) x 1.15], where the extra 15% is for unexpected expenses. That’s it. You now have an account where you know you could spend the entire amount in it tomorrow, and you know you won’t starve or compromise on your future. It’s a liberating feeling.

I love this account. It’s the one account I actually love seeing a low bank balance on, because it shows that I’ve been living an awesome life by spending when I deserve it. Of course, if you’re saving up for a specific goal, say an expensive trip or Christmas gifts and parties, then you can’t blow the entire account tomorrow. But the same principle holds – that money is for you to spend, and it’s your reward for working hard and saving. Enjoy it.