Challenging Myself to Live 3 Months Below My Means

in LeoFinance2 months ago

I tried to live like I didn’t have a paycheck and below is some retell of how things are going. Last year, I was working for more than 6 months without pay and on survival mode. The influx of income screwed some of my financial decisions allowing some spending on things I like but don’t need. Around 3 months ago, I made a budget plan and a goal of not checking what’s on my bank account for 3 months.

Disclaimer: None of this is financial advice and I expect people to take what they read with a grain of salt. I don’t endorse people to YOLO their money into crypto if they haven’t done their research and assumed their informed risks.

The Financial Challenge

No ATM withdrawals unless it's an emergency (hasn't happened yet).
Stick with the reasonable budget
Cut down expenses that aren't necessities
Abandon social life and just sacrifice a few life points to be a diligent wage slave (optional and fighting).

It’s been 3 months since I last checked what’s on my bank account and I’m thinking of extending the living thrift challenge. But then the taste of food and other mundane luxury grows enticing as days go by. It’s not a surprise that what I earn by my country’s minimum wage standards as markedly high for the average person as a perk to working in a specialized field.

Here’s the frequent remark that became an internal pet peeve, “You’re a doctor? You must have a lot of money”, there is a good reason for the stereotype but it’s not like people really think above the appearances for the sake of small talk. I could make a comeback about the living expenses I have to shoulder because I’m in the profession, filial piety for living in an Asian culture, having to pay more taxes, and the disadvantage of people assuming I got my life better because a few more digits on my pay slip.

The rich doctors tend to be from wealthy and established family names, or those with a lot of disposable income to maintain an appearance (this profession has a lot of side gig opportunities). Those that are in the average and below zone (where most doctors are) tend to have a lot of bills to pay, use their income on strangers for the common good, and maybe just irresponsible with the excess cash flow.

Anyway, 3 months of not checking what’s on my ATM challenge was inspired by how long could I last given the level of financially literacy and resources I have accumulated for the past months. After making a budget plan, and destroying the EMV chip on my ATM card, I’m all set. I did have some reserve funds for emergency cases relating to health. Living below my means prior to the challenge made me last this long and I think I could go for another 3 months more for kicks and giggles.

I walk to work (around 1.5-2 km distance), went on diet, and stayed away from scenarios where I get tempted to spend more than the budget. That's game plan and it worked considering food and transports were the only necessities I have more control compared to utilities and tax.

Telling you right now that plain bread tastes the best when you use hunger as your only spice. Fried eggs and bananas are efficient to fill up your stomach. At first it felt like self punishment but when comparing how much is spent daily versus previous months, there is some dopamine kick to it.

Subtracting my other financial obligations, my total expense was around 175 to 250 dollars a month (more or less). I could’ve cut down the expenses lower if I didn’t live in a city and commercial food didn’t have to taste good.

Financial literacy is like a bad medicine to a virtue signaling conservative society nurtured by consumerism. It’s the lesson everyone needs but a hard pill to swallow. I live in a country where there is strong emphasis on religion and the pursuit of money is bad even if learning about it can make people financially capable and functioning members of society.

Inspirations

I came across the book called Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty and it was mentioned in the books I sought after mentioned here. I already knew some of the contents of the books I planned to buy, it’s just a matter of wanting them on pdf or paperback.

Poor Economics has a lot of interesting insights about how people living poverty make complex financial decisions and still be irrational.

A snippet on the content explores about why the poor spends so much on money on food and the complex choices they make when it comes to their food purchase. The gist is that acquiring nutritionally balanced food items for your meal can be cheap and yet people would opt for food items that have more flavor (a higher price). An egg that contains a lot of protein, bread, rice, salt, and maybe some green leafy vegetables cooked at the most basic recipe one could come up with can be nutritionally balanced. But we know this doesn’t sound like one is living, it sounds more like survival mode and living is what people want to do.

So articles like this PH poverty: You're not poor if you spend more than P18.62 per meal didn’t make sense until I expanded what I knew about economics. People make complex financial decisions especially those living in poverty. And making rational decisions become simpler when you got plenty of resources to have room for trial and error. This was a reflection I came across when I wanted to cut down my food expense at the most basic level and yet eating fried eggs, bread, veggies, and milk for weeks seemed like punishment.

I’m stuck in a zone where I’m happy that I’m able to live below my means yet dissatisfied that even after stacking up my resources, they fall short to some ambitious financial goals in mind. But it’s a long term process and I just started so meh.

Pursuit of Self Improvement

I got a decayed art blogging account @artofadamada but there’s a noticeable lack of content there. Lately my focus shifted on increasing my financial smarts to balance my procrastination when I should be productive at art. Just to make it less scathing to do self-evaluation whenever I reflect on how I spend my time, I have to balance it by doing something equally productive. While my artsy side degrades, my money smarts increased and learning more about macroeconomics broadened my view about the world.

US recession is happening and the bear markets got me excited. The Philippine peso keeps getting rekt on the exchanges and everyone’s eyes are on the US market. I checked the Philippine’s central bank and their recent 4.25% and not much buzz has been given to these changes on the daily television programming. The fact that most Filipinos couldn’t care less about what happens in the economy until it starts affecting their daily living is amazing. The default to blame will be who’s running the country for areas they aren’t in control of like the world market and this is exactly how you’d expect from a country with low financial literacy levels.

The transition period right after getting a degree to being a fully functioning adult to society is a jump in a volcano strapped to a bomb. Unless your course has something to do with finance, you’re stuck trying to figure how out what healthy personal finance is and how you can make your own portfolio (the average person here doesn’t know the concept of a portfolio).

There is a steep hill to overcome when you want to convince people to make better financial decisions. It only takes an escalator ride if it’s just convincing them to buy something online. Everyone can acknowledge they need to expand their financial smarts but procrastinates on it. If there is a sound financial advice to be given here, it’s just opening a bank account, check out available traditional investment vehicles offered, get a life insurance, and spend more time reading more on personal finance because those activities don’t hurt anyone.

In addition to the above, I'm just shopping for some tokens, land and local stocks for sale just to diversify. I'm mostly focusing on passive cash flow opportunities.

The HBD Being a Financial Hack, Sort of

If HBD is pegged to the US Dollar, this functions like a pseudo dollar savings account for people that don’t have one. If you look at the the USD/Philippine peso exchange rate, it doesn’t look good for the local currency. I made a forecast that it’s going to get higher back when it was just 54 pesos per USD and dang. While the uninformed would celebrate knowing that their USD remittances get more value, eventually everything within the country will start inflating in price.

USDPESO.png

The country reported around 6.3% inflation for the month of August 2022. Now a lot of people here don’t really know or are aware of how this affects their daily living because inflation is not a term one uses daily. The terms often used daily are increase in price of basic necessities and oil but to expect an average person here understands the basics of how things are the way they are in the economy is fantasy.

If I wanted to make a bet between the USD and Peso, I’ll be taking my chances with HBD. It’s not an endorsement to go YOLO, this is still crypto. It’s nice to have some stockpile but not beyond the level you’d gamble your retirement on it.

The previous bear market taught me stuff that I should be doing and some of those are set in motion. What’s more important to me now is exponentially increasing that knowledge of surviving bear market conditions because this is the season where riches can be made.

Insert: An inspirational quote here from some random finance wizard online or a proverb to make the post look less bad.

If you made it this far reading, thank you for your time.

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Living within your means is always the first step to wealth. I remember learning that lesson the hard way in my mid 20s. I thought I had an income problem, but I had a spending problem

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I thought I had an income problem, but I had a spending problem

^ This. Then not paying attention to how much we want to rationalize spending like we need it but just actually want it. I forgot the term but it's something along the lines of post depression or buyer's regret right after purchase. I think that feeling is a healthy warning mechanism about our spending habits.

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You can do it!

Yes but food tastes better when it has more than salt and sugar on it :<

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Just grab some free ones from a fast food place or something.

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Damn that takes a LOT of discipline and good to hear you're doing well.

I live in a country where there is strong emphasis on religion and the pursuit of money is bad

Those who say "mukha kang pera lagi nalang pera nasa utak mo!" are the same ones who "wow ganyan ang trabaho mo? Anlaki siguro ng pera mo pautang naman". 🙄 They're the ones complaining about not having enough money but also would participate in Lazada and Shopee 9.9 sale with things they literally don't need.

Wishing you all the best!

would participate in Lazada and Shopee 9.9 sale with things they literally don't need.

Tinamaan ako dito, dahil bumili ako sa sale, some of the books mentioned on another post, and most of the books I wanted on paperback will have to wait dahil ebook nalang.

"mukha kang pera lagi nalang pera nasa utak mo!" are the same ones who "wow ganyan ang trabaho mo? Anlaki siguro ng pera mo pautang naman".

They're not in your shoes to know the nature of your grind. I think I've developed some tolerance to this and rationalizing it as, I don't also see their grind and maybe their life perspective, no matter how much I disagree with it, makes them think that way and it's a luxury to take time and understand others. Most don't give you that value of suspending judgment and likely will not try to understand.

Sinabi nga ni lola dati, sa kakacelpon ko to.
puro computer at drawing lang inaatupag, luh.

Have a good weekend!

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It's a lifestyle !LOLZ

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@adamada, I sent you an $LOLZ on behalf of @dlmmqb

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Hey @adamada, here is a little bit of BEER from @dlmmqb for you. Enjoy it!

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That was an entertaining read and I think I took something from it.
That's some challenge you're on.

You wanna go on a diet too?

Picking up the book called Poor Economics gave some more perspective on how I choose my food items. 2 eggs, banana and rationed commercial milk or switch it up with green leafy vegetables sold cheap by sidewalk vendors is nutritionally balanced. Adding salt, sugar, and some multivitamins gets me all set.

But doing this is survival mode, people want to live and want a taste of luxury so fast food is the way (cheap fast food that accumulates in spending), complex decisions by people living in poverty that are understandable and arguably irrational.

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Maybe in the not too distant future I may have to start with this kind of diet.

I read a funny book called “Broke Is Beautiful.”
By Laura Lee.

You need it.

🤑

I'll check it out, thank you :>

And that's what we call discipline! With that kind of discipline, I bet you'll do great. Kudos, Adam! The thought of it makes me want to try it too 🤔 kaya ko kaya? Hmmm.

Curious tuloy ako dyan sa Poor Economics. Mabasa nga.

kaya ko kaya?

Needs a lot of preplanning than it sounds.

Before I started making a budget plan, I needed a baseline data on what I was spending for the past year, within half a year, and past quarter. This helps me average out the expected costs and identify areas that I can reduced cost.

My workplace is within 20 min (1.5 km est) walking distance so that markedly reduces my transportation costs to 9/10 times but I have to wake up early and sometimes risk not taking a taxi when it's late in the evening. If you're planning to reduce cost for commute, it's best done in a safer neighborhood.

Then reducing the forecasted financial obligations that are non-negotiable, rent, utilities, taxes, and insurances. Utilities can be negotiable depending on your landlord. From the start, taken cared of na sa budget yung mga staple costs para makapag focus kanalang sa ma adjust pa na cost. And then setting some room for emergency costs like health and loans asked by peers (pautangin mo sila, ma sense nila na nagtitipid ka therefore maraming pera).

If you're strictly set on abandoning a social life, this markedly reduces your costs.

It's a psychological endurance, on one hand you're satisfied that what you do saves value while in survival mode but on the other hand it can be self imposed punishment. You're going to be surrounded by people who don't have the same discipline, probably feel envy when they spend on small luxuries, and all the stuff related to choosing the cheap road.

The food costs are something to mind, ideally, I should have consulted with a nutritionist on what foods I can substitute, my target weight, ideal weight and amount of food to take. Nakakakain ka nga ng masustansiya with just plain fried/boiled eggs, bananas, bread, milk and green veggies pero walang lasa compared to the seasoning na pwede mo maranasan sa fast food. But it's still nutritionally balanced, it just doesn't taste as good compared to the slightly expensive choices.

I destroyed my ATM card so that there's no way of backing out, and if I want to back out it would take 2 weeks for the bank to replace my card. This inconvenience to surrender may add to the conviction to go through with the process.

Kaya mo yan C, blog mo nalang journey mo, basta wag mo masyado galingan at mag papagutom ka ng di na healthy.

This helps me average out the expected costs and identify areas that I can reduced cost.

I'm one step closer! Good thing I've been tracking mine. Yeah, I'll blog it this October. Thanks, Adam!

You’re a doctor? You must have a lot of money”

LOL. I think that doctors have a lot of cash too. Are they not? 😁

After making a budget plan, and destroying the EMV chip on my ATM card, I’m all set.

Woah. You're really serious.

The default to blame will be who’s running the country for areas they aren’t in control of like the world market and this is exactly how you’d expect from a country with low financial literacy levels.

Many people really know how to look for someone to blame when they experience hardships in life. But they don't know how to save or invest for their future. I don't know if you ever experienced being blamed by someone for not continually giving them money. LOL.

Anyways, glad to hear you are on pursuing financial literacy/freedom too. 🙂

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Are they not? 😁

Depends on who you ask and where they actually spend their money on.

Woah. You're really serious.

Didn't want to pussy out. Right now I still haven't bothered to go to the bank to get the replacement for weeks now.

I don't know if you ever experienced being blamed by someone for not continually giving them money. LOL.

Surprisingly, I haven't. But if they happen to be on the blockchain, it's likely to happen. The trick is not to make it look like you own anything. I don't dress the part and get mistaken as someone from a different profession or unemployed.

Great post and super interesting to read. I hope you are able to continue your challenge.

I read somewhere that it's not how much you earn, but its how much you save that will determine your future. Ofc, you would also need to make sure what you save is invested wisely.

What works for me (I try to be disciplined), is to break everything down into %s and not use flat amounts. I.e. give X% to parents, X% savings, X% rent and most importantly X% for living life and having fun. This allows you to flex when your income goes up and not feel like you always have to get by with $200 a month.

If you yourself do not feel rewarded when you work hard and earn more, it starts to become a grind and you gradually get less motivated. All the best!

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