Updated: 30 June 2017
Inspired by my colleague and senior writer, Shen, who successfully completed his 30 Days Budget Hero Challenge on RM700, I’m now embarking on a challenge of my own.
The challenge? To complete the month of Ramadhan on RM1,000 and this includes preparations for Hari Raya this year.
The Inspiration Behind the Challenge
Why Ramadhan? Many have already suggested that this would be an easy task and there isn’t much of a challenge because I’m automatically spending less anyway. I don’t have to pay as much for food, right? While this is true, I felt this was the exact reason to do the challenge during the month of Ramadhan.
During Ramadhan in past years, I found myself spending more in other areas of my life because I was spending less on my daily food expenses. For example, because I don’t spend on breakfast, lunch, and tea, then it justified splurging on my iftar meal as I’m breaking fast. Or how by mid-month I noticed I had more in my bank account than I normally would, therefore I felt I could afford that designer baju kebaya for Raya, but did I really need it?
While technically it is true that I am “spending less” throughout Ramadhan, I have experienced first-hand how this does not automatically translate to saving money.
Saving money, in my opinion, is a mindful task that has a lot to do with the mindset you’re in, your attitude towards money, and conscious spending habits. And I hope to demonstrate this through my challenge. And besides, the last thing I want is to usher in Hari Raya with an empty bank account, eagerly awaiting the arrival of the next payday. And let’s face it, this is a reality we’re all too familiar with.
Parameters of the Budget Challenge
The RM1,000 budget excludes necessities and monthly commitments such as my loan repayments, bills, and all other expenses that I cannot avoid. The budget is therefore, RM1,000 of my disposable income and will include petrol, parking fees, food and drinks, entertainment, my Hari Raya outfit, kuih, and anything else that may come my way.
How will I do it?
To help me through the challenge, I’m taking CompareHero.my’s advice on how to avoid overspending, though I won’t be applying all of them, the ones I will be using includes:
- I’ll keep track of my expenses and ensure I’m on budget
- I’ll be clear about my needs vs. my wants
- I’ll have to invest time to window shop and hunt for great bargains
- Be creative with my shopping and potentially mix and match cheaper alternatives
Let the challenge begin!
Today marks my first day of the challenge. Wish me luck and stay tuned for my weekly updates on how I’m faring, bargains and great deals I’ve found, and for my tips/key lessons as I budget my way through Ramadhan.
I would also like to invite you to take part in this challenge with me, and if you do, drop me a comment and let me know how you’re doing or if you have any money-saving tips!
Week 1: 1 June – 7 June 2017
Kanching Waterfall Entrance & Parking Fee: RM3.50
Total spend: RM183.10 (18.30% of total budget)
Balance for 23 days: RM816.90
Challenges and Lessons of the Week
I’m just going to get straight into the most difficult parts of the week.
1. To track every single expense.
I used to track the bigger expenses – loans, bills, credit card repayments – and very rarely would I make an effort to track daily expenses on food, drinks, parking fees, toll, etc. I was mostly unaware of my daily expenses and I think I secretly preferred it that way.
Ignorance is bliss.
I downloaded an app on my phone called Saved from the AppStore to help me keep track and so far it has been very handy. You can create your own categories, set a budget for the month, view graphs and pie charts, and basically keep track.
See also: 6 Smartphone Budgeting Apps You Should Try Now
This was one of the hardest things to do because I had to either 1) remember the amount I spent and key it in later which was often a hassle, but receipts save the day! Or 2) whip out my phone at every single expense even if it was just to pay for parking.
Over the course of the week, this became a challenge and I would sometimes forget entries entirely. It can get a little frustrating and you start to feel like “why is this such hard work?” but that’s exactly the lesson I needed to learn.
Did you know? A plastic surgeon back in the 1950s, Maxwell Maltz, once conducted research on his patients to identify a pattern of time until his patients started recognising the changes he had made to them. The magic number was 21 days which then sparked many self-help gurus to establish this new rule that it takes 21 days to form a new habit. Many people assumed this to be a fact and it was a relatively small number, 3 weeks of consistent behaviour and the new habit should stick. However, this has been recently dispelled by newer forms of research, particularly by a health psychology researcher at University College London, who through a more diverse and comprehensive sample size, showed that it takes more than two months before a new behaviour becomes a habit – 66 days to be exact. Although this varies widely depending on the individual so it isn’t an exact science.
No matter how long it takes for a new habit to form, the point is, you have to keep doing it consistently over time. Don’t fall off the wagon and don’t slack off.
You can duit!
2. Adjusting to a budget is not fun (at first).
I’m not going to paint a pretty picture and tell you that adjusting to a budget is easy and fun because it isn’t. The hard truth? It sucks. But, this is temporary and with all new adjustments/habits, you feel the pain most as you’re just starting out.
For instance, I went grocery shopping on a Friday night to buy fruits and a few other necessities. Along the way, I was obviously tempted to indulge in a little more, but I had to shift my frame of mind.
See also: Budget 101: How to Make a Personal Income Statement
3. I love food but this challenge is forcing me to be more disciplined with my eating habits
Another challenge I faced throughout the week was to exercise self-control when it came to food. Ironic, I know. We’re in the month of Ramadhan so this should naturally be one of my goals, and it is, but it’s different when you start to throw money into the mix.
I love to eat, I love food and I don’t think there’s anything better than indulging in great food. But, I realised through tracking my expenses that my biggest expenditure is on food/drinks. It was definitely a challenge to dine out and have to be budget conscious when ordering your meal. I prefer ordering anything and everything to my fancy, but that has to change if I plan on keeping this up.
I’m also fortunate that I still live at home so most times, there’s home-cooked food or shared groceries for me to make my own meals. Take advantage of opportunities you have in your life to make your budget work for you.
See also: 5 Ways to Save on Your Ramadhan Feast
4. The weekends were not as bad as I thought it would be
Taken at Kanching Waterfalls
The first thing most people would exclaim is: “Oh but your weekends are going to be so boring now! What will you do?”. Plenty, in fact. I now have more time to focus on more fulfilling activities, things that money can’t buy. For instance, I’m catching up on House of Cards so I can finally start to watch Season 5. I make it a point to read every day and more so on the weekends. And I’m finding cheaper alternatives for a good time including weekend hikes or weekday runs.
I personally love the outdoors and adventure, so this wasn’t a difficult choice for me. Of course, the heat and intense climb can be a challenge when you’re fasting, but if you know your body and stay within its limits, you’ll be fine.
Activities aside, I also found more time to run my errands. I used to send my laundry to the local dobi, which would obviously cost me. Instead, I did laundry at home and will continue doing so to save money.
Key Takeaways of the Week
- You will face challenges but don’t let it get you down. Remain focused on the goal and keep reminding yourself of the bigger picture.
- You will need to make adjustments which you should be able to identify within the first week of tracking your expenses.
- Cut back spending on unnecessary wants and exercise self-control by asking yourself “Do I need this?”.
- Living on a budget requires effort, you will have to put in the hard work and consistently do so until the new behaviour becomes automatic.
- Fill up your time with more fulfilling activities that also come with a cheaper price tag.
- Pack any leftovers when dining out and re-heat them for your sahur meal, or be creative and make something else out of it.
- Take advantage of the opportunities in your life to aid you with your budget: for instance, eat at home, do laundry at home, split grocery bills, chip in for utility bills so not one person pays for all of it.
Week 2: 8 June – 14 June 2017
Food/Drinks: RM194.50 (+85% from last week)
Toll: RM10 (-60% from last week)
Total spend for the week: RM355.10 (+93% from last week)
Total spend to date: RM538.20 (53.8% of total budget)
Balance for 16 days: RM461.80
Challenges and Lessons of the Week
1. I am a social spender
If you have ever done the Myers-Briggs personality test, you know your personality is grouped into 4 characters and I am an INFJ. This means I'm Introverted (versus Extroverted), INtuitive (versus Sensing), and that I am driven by my Feelings (versus Thoughts) and Judgements (versus Perception).
Believe it or not but our personalities actually affect the way we spend our money and though none of this is set in hard science, I do believe there could be some truth to it. Based on this infographic, I am a social spender and this was my biggest challenge for the week.
Social spenders are good savers but could be tempted into more extravagant lifestyles by peers. Stress and momentary carlessness could result in impulse spending.
I spent the majority of my weekend at home, catching up on House of Cards and various other forms of free entertainment including, sleep. This meant I spent close to RM0 during these days and I felt great about being on track with my budget. However, this changed when I was in a social setting. I went out for my iftar meal on two occasions during the week and as you can see, this was the largest increase in my expense week-on-week. I spent a whopping 85% more on Food/Drinks than I did in Week 1. I already knew that Food/Drinks was the spending category I needed to cut back, and I tried, but it seems that as soon as I'm placed in a social environment, my budget goes out the window.
Ever get that feeling that you think you have a handle on your budget until the bill comes and you're a little surprised you spent that much? This is the danger of excessive lifestyle spending, especially if you don't track it.
However, I managed to enjoy a free meal thanks to the company team dinner we had this week. That saved me from further pushing the limit on my Food/Drinks category. Don't be ashamed to take advantage of free meals! (Thank you CompareHero.my!)
2. I value convenience and am willing to pay for it
Imagine being stuck in KL traffic for over 40 minutes from Jalan Raja Chulan to Mandarin Oriental, which on a traffic-free day would probably only take 5 minutes. Before I arrived, I was already suggesting to my colleagues and my MD that we do valet parking. Why? Because I just wanted to get out of the car and it seemed convenient.
That's a reality many of us face and I'm sure we're always so tempted to just take a more convenient option even if that means we have to pay a little more for it.
Shout out to my MD, Mark Reijman, for keeping me on track. As I was driving up to the valet entrance he says "But wait, you're on your Budget Challenge aren't you?". I almost groaned because he was right and I knew I had to do the budget-conscious thing. I then proceeded to the parking lot but to my surprise, it wasn't that bad. I also received a flat rate of RM15 for parking from the Hotel since we dined at their Ramadhan buffet. Valet would have cost me RM35, I saved myself RM20!
Key Takeaways of the Week
I've spent 93% more this week. Am I worried? Yes. I haven't even begun to do my Raya shopping. Do I feel disheartened? Yes. But I hope to use this as motivation to do better next week.
- Eating out IS expensive! It adds up. I didn't realise just how expensive it is until I started doing this Budget Challenge. Dine at home more often to save money, cook your own meals, or choose your restaurants wisely for more budget-friendly options.
- Budget app Saved on the Apple Store is a life saver. Highly recommend using it!
- Reconsider every expense you're about to make out of convenience. Yes, it may save you a portion of time or work, but it will hurt your wallet and every bit counts.
- Identify the type of spender or saver you are. Do some soul searching and self-reflection. Do you spend more in social settings? Are you a frugal saver and could you have a bit more fun? Are you a risk taker? Do material gains mean a lot to you?
- Ask the help of your family and friends when you know your weaknesses. For instance, I often ask my loved ones to stop me from over-ordering food.
Week 3: 15 June - 21 June
Food/Drinks: RM30 (-85% from last week)
Petrol: RM64 (-24%)
Entertainment: RM36.15 (-10.7%)
Toll: RM37 (+270% from last week)
Total spend for the week: RM257.15 (-27.6% from last week)
Total spend to date: RM800.35 (80% of total budget)
Balance for 8 days: RM199.65
Recap of the Week
I'm at the tail end of the #30DaysBudgetHeroChallenge - Ramadhan Edition. I thought it would be a good time to share more detailed percentages of my spending. As you can see from the screenshots of the Saved app, my Top 3 expenses are:
- A whopping 41% on Dining (Eating out);
- An equal distribution of 19% on Groceries and Petrol;
- And being Ramadhan, a lower percentage of 10% on Entertainment
I suspect that after this challenge, Entertainment would have a higher percentage but considering that I can survive on very little for the month, I may continue to keep Entertainment expenses to a minimum.
Ramadhan is technically over with us a few days away from Hari Raya, so if you ask me if it's possible to survive on Ramadhan under RM1,000? I would say yes. However, I only started my challenge on the 1st of June, and so I will continue this challenge for one more week and include Raya preparations into the challenge too. I still need to allocate a portion of my balance for duit raya, which might bust my budget, or I may just about scrape through. Let's see what happens in Week 4! Now, onto the challenges and lessons of the week.
1. A conscious decision to cut down expenditure
If you refer to my spend breakdown, I'm excited that I successfully reduced my expense on Food and Drinks by 85%! The shock of my extravagant spending in Week 2 gave me the motivation to take this budget more seriously when it came to dining out.
How did I do it? I simply reduced eating out. It was as simple as that. I ate at home, cooked my own meals with the shared groceries, and when I needed a boost of social interaction I had a potluck dinner at a friend's house on Saturday evening. This did not incur any added cost since we all prepared and cooked the meals we shared.
2. Window shopped and found hidden gems in an unlikely place
Raya shopping was incredibly different for me this year. I'll admit, in past years, I had never set a budget and stores like Ampang Park, AEON or Zalora were my playgrounds. And up until recently, I used to tailor make my outfits. If it wasn't over-the-top, I could afford it. A nice kaftan for RM500, why not? I'll wear it again (although not as often as I thought). This year, I window shopped but couldn't find anything I loved. Nothing that I felt deserved a place in my budget challenge.
So instead, I did one thing that many people might not think about doing, because a "new" outfit, freshly bought from the store is on everyone's mind. I dug through my mom's closet and found vintage pieces, but also never-worn pieces that she bought when she was around my size. Boy, was I excited! These were baju kurungs and kebaya tops that I would definitely wear myself. I could mix and match them with things I have, and I could definitely make it work. To top it off, I found a dress I had purchased off Zalora a year ago and that I have not yet worn.
The budget for Hari Raya shopping? RM0. ZERO. Nilch.
3. My car service was an unforeseen expense
There's also the little matter of my car service that cost me a lovely bill of RM700+. I had to replace two car tyres and the last time I had serviced my car was exactly a year ago. Silly me, if I had been a bit more on top of my schedule, I could have probably avoided that large bullet to my bank account.
If we take this unforeseen expense into account, I would have completely busted my budget by hundreds of RM. But let's make an assumption for me to prove a point on the importance of savings. Imagine RM1,000 was all I had to live on, that this was the disposable income I had after paying everything off. And boom, this unforeseen expense happens. What then?
I could either get myself into debt by paying for it with my credit card, taking a loan from my parents, OR I could do the responsible thing and dip into my Emergency Savings that I obviously have set aside for rainy days just like this. 1) I don't get myself into debt 2) My disposable income of RM1,000 continues to be sufficient/untouched and 3) I'm financially prepared and responsible. #Winning
Key Takeaways of the Week
I've spent 27% less this week and I'm happy! I now know that I can exercise some self-control and responsible spending when I really put my mind to it. I'm still worried because I have duit raya and 8 more days to think about, so I may go over RM1,000 but let's see.
- Technically, it is possible to complete Ramadhan under RM1,000 but I wouldn't include Raya preparations into this budget in future. That requires a separate budget altogether. I would suggest splitting the two amounts and tracking those separately.
- I feel I could have survived on far less if I had started to reduce eating out a lot earlier in this challenge. Mental note for next month.
- Build your emergency savings! I did not expect to have to change two tyres this month, and this is a perfect instance of how an unforeseen event can set you back financially if you do not have any money for a rainy day.
- Window shop and dig through your closet at home before buying the first outfit you fall in love with. If you must buy an outfit, have a budget for this and stick to it! Bargain and hunt for good deals.
- Identifying your largest expense is the first step. It doesn't stop there. Put in the hard work and come up with a plan of action. This needs to be specific and action-based, i.e. you need to actually do something different if you want a different outcome.
See also: How To Build An Emergency Fund
Week 4: 22 June - 30 June
Duit Raya: RM150
Total spend for the week: RM160
Total spend to date: RM960.35 (96% of total budget)
Remaining Budget from Challenge: RM39.65
Recap of the Week
This will be a relatively shorter update than last weeks since this was the final week of my #30DaysBudgetHero Challenge. With only RM199 left to spend, I knew I had to make extreme cut backs and I did.
- For Hari Raya house visits, I hopped into my parent's car thus reducing my cost on toll and petrol.
- I did not spend on anything else until my 30 days challenge was over.
- The largest remaining expense was for duit raya which I managed to successfully change at the bank within budget.
Key Takeaways of the Challenge
- Yes, it is possible to complete Ramadhan on a budget of RM1,000. Even more so if you spend less on food and eating out.
- Separate the budget for Ramadhan and Raya preparations. A budget of RM1,000 is pretty tight to accommodate for both and you don't want to dampen your Raya celebrations.
- I will continue to keep up a budget challenge every month because I see the benefits of disciplined spending, tracking my expenses, and carefully considering every purchase before I give into my impulsive need for retail therapy.
Let me know if you will be embarking on a challenge of your own, and if yes, feel free to share your tips!