Tips for saving money when starting your career in Southeast Asia
Saving money is one of the major benefits of living and working in Southeast Asia—professionals in countries such as Vietnam are fortunate enough to earn high salaries, while benefiting from low cost of living at the same time.
According an HSBC survey, expats in Vietnam earn between USD103,000- USD200,000 annually, which is around 50 times higher than the annual income average for Vietnamese locals. Clearly, this presents a ripe opportunity for expat professionals to save money, and even set themselves up for an early retirement.
With simple financial planning, you can develop a savings routine and reach your financial goals. Here are the top six strategies you can develop for savvy saving:
1. Bid Farewell To The Monthly Budget
Yes, you read that correctly. Although conventional wisdom states that you should budget on a monthly basis, this is a financial planning fallacy. A month is a long time-frame, too long for an inexperienced saver to avoid spending money on things that don’t actually enhance their wealth (see tip 5).
Rather, set a daily budget to avoid pricey pitfalls:
Step 1: Calculate how much money you have at the beginning of every month
Step 2: Deduct your living expenses and savings (see tip 2)
Step 3: Take this amount and divide it over the number of days in the month
Voila, you have your daily budget! If you start early enough and never spend a cent more than this allocated daily amount, take our word for it—you will be able to retire by the time you are 40.
2. Savings Should Be Factored Into Your Daily Budget
Too many people only take living expenses into consideration when calculating a budget and don’t factor in monthly savings. One of the key principles of personal finance is “pay yourself first.” Get into a routine (and set up automatic payments) to save money at the beginning of every month, before calculating how much money you have to spend.
3. The Quicker You Can Pay Off Student Debt, The Better
Yes, your qualification may have helped you land a job in the first place, but you may end up paying double the amount of your original student loan simply because of the interest you will accumulate.
Pay off as you can afford towards your student loan before accounting for any other regular expenses. In the long run, you will beat the bank and save yourself a vast amount of money in the process.
4. Learn To Manage Your Own Investments
We live in a digital era, where almost anything we want is accessible at our fingertips. If you are able to master the basics of investing from a young age (which is really not that difficult with sources like www.investopedia.com), you will improve both your business skills and your bank balance.
You can open your own stock brokerage account through platforms such as Interactive Brokers, Charles Schwab, TD Ameritrade and buy shares in companies anywhere in the world with minimal funds.
5. Do Not Give In To Frivolous Fancies
When starting your career, it’s easy to become over-excited as those first salary checks start coming in and you may be tempted to spend money on things that you don’t actually need. The only items that should be on your list are:
1. Tailored suits
2. A Dale Carnegie book
3. A decent haircut Save the rest.
6. Take Out Health Insurance – Now!
Proper care and hospitalization is incredibly expensive. Even if you are fit, healthy and feel invincible, the truth is that you are not. Undergoing serious treatment or being involved in a serious accident could easily bankrupt you and your family, and ruin your life.
The frightening reality is that most governments are enormously indebted and simply don’t have the means to take care of their citizens adequately. The onus is on you to take care of yourself by taking out good, comprehensive health insurance.