Shameful Reasons Why You Keep Breaking Your Budget

Budgeting, a quantitative plan to manage your money, has many benefits such as tracking your cash flow, controlling your expenses, and reaching your goals! However, some people find it easier to break their budget than to follow it.

Fortunately, you can do something about it. Be aware of the despicable reasons why you keep breaking your budget then, take the necessary steps to turn things around.


There is no need to fear because budgeting is easier than you think! And, it is rewarding too. For example, if you want to splurge on a weekend vacation, all you have to do is plan ahead. That way, you would not have to create credit.

A simple budgeting method that you can try is the envelope budgeting. It only takes three steps to complete! Begin with tracking your monthly spending patterns then, devise a budget plan including different expense categories. Lastly, you must allocate your cash inside separate envelopes.

Watch this short video tutorial of the envelope budgeting to know more:


The truth is, you cannot have unlimited supply of money. Even the amount of digital currency such as Bitcoins are controlled. This is why you must spend within your means.

Overspending is one of your budget’s enemies. If you want a comfortable present and a brighter tomorrow, you must stick to your budget and cut down your expenses before saving up. Start by minimizing your household expenses with these simple tips.


Another opponent that challenges your budget are unexpected bills. You will never follow your budget if you keep forgetting your irregular bills such as your yearly magazine subscriptions. Avoid this by making a list of the bills you are expecting to receive every month.

Never forget where you put the bills or what their due dates are by designating one place for them. Some bills arrive by electronic mail while some arrive by postal mail. You have to decide whether you are going to file all your bills in a tangible box or in a computer folder. For physical storage of bills, you may purchase the S$0.90 PAPPIS brown box from IKEA that is created to hold A4 size papers. Label the box accordingly and keep it in a safe place. While for virtual storage of bills, make scanned copies of those that arrive in the mail and put them into a labeled folder in your computer or laptop.


Most people want to improve their financial life but know nothing about how economics works. Thus, they make errors in creating and maintaining their budgets.

Economy is defined as the careful management of resources (e.g., household management). While, manage is defined as the act of succeeding in surviving especially against heavy odds. Learn more about the important terms, history of money, and its humanistic systems by watching at least two of the Best Economics Documentaries For Finance Professionals And Enthusiasts.

Image Credits: (License: CC0 Public Domain)

Image Credits: (License: CC0 Public Domain)

Sources: 1 & 2


Best Economics Documentaries For Finance Professionals And Enthusiasts

The best cinematic art illustrates human conditions and life in general. One type of cinematic art called “documentary”, imitates life and factual records as close as possible.

Enjoy at least two of these wonderfully made films especially if you are taking up finance and economics as a subject at school or as a career. These documentaries will not only help you understand the history of money but also the humanistic system that revolves around it.


Four Horsemen is one of my favorite documentaries of all time. It is controversial and eye-opening. An award-winning film by Ross Ashcroft, Four Horsemen criticizes the system of debt-based economy, fractional reserve banking, and political lobbying by banks. Join Joseph Stiglitz, Noam Chomsky, and 21 leading thinkers as they discuss how the world works and how to solve the failed systems at present time.

They travel through the centuries and examine the systems that shaped empires. These systems manipulated and even corrupted the minds of the many to serve the interests of the few. Learn more about these said systems by watching the full-length documentary, here.


Sometimes, we learn the most by observing and avoiding the mistakes of others. What better way to learn than by watching “The Fall of Lehman Brothers” – a firm that filed the largest bankruptcy in the United States history.

On September 15, 2008, financial services firm called the Lehman Brothers filed for Chapter 11 bankruptcy protection with Lehman holding over US$600 (S$834) billion in assets. The following day, Barclays bank announced its agreement to purchase Lehman’s North American investment-banking and trading divisions along with its New York headquarters building. Watch as these events unfold in the full-length documentary, here.


Like most of the people, Nick Leeson wanted to be affluent and successful and he had extraordinary abilities of manipulation and deceit to back it up. This documentary tackles how he deceived the people around him and how these people were deceived. Lured by the possibilities of getting vast sums of money, these people lost 830 million pounds all together. This true story was so powerful that filmmakers were inspired to make an adaptation called “Rogue Trader”, which starred Ewan McGregor.

Watch how Nick Leeson uses friendship to rip-off people at this full-length documentary.


On this list, “The Ascent of Money” is the one that deeply touches the base of the world’s financial history. It will give finance professionals a greater understanding and perspective of how the financial world works. Watch as Professor Niall Furguson takes you to the beginning of the financial world from the ancient city of Babylon to the new-age financial crisis in 2008.

Be forewarned that this film lasts for 300 minutes so, you must dedicate time or chunks of it if you really want to absorb its essence.

Image Credits: (License: CC0 Public Domain)

Image Credits: (License: CC0 Public Domain)

Sources: 1 & 2


The economics of a luxury product

Relative to many other industries, the luxury business puts up little fight to preserve its sheen throughout history as it symbolizes prestige, exclusivity and wealth. As each human being strives to establish their personal identity and social status, the luxury sector flourishes by expediting this process of differentiation and labeling. This phenomenon is increasingly reinforced by the awakened economic giant, China, where Goldman Sachs had reported that it will become the top consumer of luxury goods globally by 2015.

However, as the rising middle classes in Asia embark on a buying binge, “luxury” inevitably loses its social appeal while such extravagant buying behavior soon spirals into a cycle of irrationality and wastefulness. Therefore, it is often prudent to understand the economics of a luxury item before splurging profligately on it.

The diagram shown below is a simple decision-making guide that may be useful for both existing and potential luxury seekers.flowchart - template



4 essential economic relationships Singaporeans need to know

Featured Image Economy

We frequently hear of the word “economics” in papers or conversations, but how useful or applicable is this course of study to the real world?

Understanding economics is in reality fundamental to understanding the price movements of every single good and service in our economy. It is the aggregation of the demand and supply forces.  Indeed, when we see the airfare skyrockets after the end of school term, it is economics at work. Huge travel demand outweighing limited supply of passenger seats leads to propped up prices. As such, appreciating and capitalising on economic knowledge could end you up in deeper pockets.

While it may be too time consuming and superfluous to master all the economic theories, knowing a few essential concepts may come in handy in guiding our financial and behavioral decisions.

  1. Inflation and savings
Inflation and Interest

(Image credit:

Thanks to the prudent policies administered by MAS,  Singapore enjoys a low inflation rate of 2.8% on average since 1962. However, a simple comparison between the interest rates offered by various banks indicates a mere 1.3% as the most competitive rate for 1-year fixed deposits.

What this means: The fund sitting in your bank is losing 1.5% of its value to be exchanged into goods and services annually. Given that you have $100 in your bank today, you can afford to buy 50 McChicken burgers. But one year down the road, you can only afford to purchase 49.25 of them.

Course of actions to be taken: Since the saving rate is not commensurate with the inflation rate, we may be better off investing in alternative assets  that provide higher yields. However, if every rational and irrational soul is doing that, risks abound as illustrated below.

  1. Stock investment
Stock Investing

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Investing in stocks can yield 2 kinds of returns, namely dividend yield and capital gains yield. The former tends to be more predictable than the latter, especially if the company holds a long term track record of constant or growing dividend stream.

How to value stocks: Dividend yield is an objective measure in guiding investment decisions since they are realised returns and a better indicator of future returns. On the other hand, be extra cautious during stock encounters with historically impressive capital appreciation. Gullible investors may be tempted to buy these shares as they often fail to realise  the high variability of capital gains yield could be complicated by the problem of information asymmetry where insiders possess and exploit private information to the disadvantage of outsiders.

Course of actions to be taken: Both insiders and outsiders have to keep abreast of news and developments in the macroeconomy and international economies as they affect stock returns systemically.

Specifically for outsiders, it is crucial to have a good grasp of the economic fundamentals (such as the consistency of dividend payouts and growth potential) of the company that helps to steer towards a proper valuation. A long term investment horizon is more favourable as it puts them on a more level ground with the insiders. If the outsiders were to invest in the short term, speculation is usually involved since by definition, the fact that they do not possess the superior private knowledge is prejudicial to them.

  1. Property investment


For more well-heeled investors looking to diversify their portfolio, real estate investment seems the way to go. Similarly, real estate assets provide 2 types of returns, specifically rental yield and capital gains yield. Best of all, a residential property provides its owner(s) a physical shelter to live in. Despite these benefits though, investors should be wary of overpaying for homes.

How to value property: Rental yield is an objective measure in guiding investment decisions since it measures the payback period of the hefty mortgage loan that homebuyers commit to. The URA Masterplan and a concise understanding of demographics are vital tools in predicting the capital gains yield.

Course of actions to be taken: Beware of one-off anomalous sale transactions that are not reflective of the true market forces. Stay out of homes in which the overinflated prices are not underpinned by strong economic fundamentals  (such as location, amenities and size). Buy during a recessionary period instead of an inflationary period. Timing the market makes an enormous difference in your bank account.

  1. Employment

Investments aside, most of us contribute to the economy through our employment. But to maximise the return on our faculties and time,  insights have to be drawn from the demand and supply forces.

Some simple mathematics to gauge how financially rewarding is a particular industry: If the staff turnover is high (due to long working hours, poor welfare, unchallenging job roles etc.), companies should offer higher wages to attract or retain workers.

However, this is not happening. Reason being a ready supply of potential (local and foreign) employees provides  virtually no impetus for corporations to raise salaries. Does this plight sound familiar?

Course of actions to be taken: Instead of complaining about meagre wages, pursue a career in an alternative industry with market dynamics (i.e. less competition) working in your favour. Although it may seem counter-intuitive, you actually build greater wealth bucking the norm and doing what others don’t do.  Better still, venture into a new industry and gain the first mover advantage.

Now you see, having a good understanding of economics is useful in our day-to-day living as it forms an integral basis for making financially sound decisions.