2015 was a good year for us, but we made a few silly mistakes. We made wrong purchases that didn't really help our finances. Here's what you can learn from us.
As a brand that writes almost exclusively about saving money, we’re not proud to say that we have also made purchases we have regretted. But we’d also think that a mistake made is a lesson learnt.
Because we don’t want you to make the same mistakes we did, here are our worst purchases in 2015 and what you can learn from us:
1. A Fiat 500L 2015
Before our Business Development Manager Diana Seredenciuc moved to Singapore in May, she bought a brand new car in Bucharest, Romania. She had recently sold her eight year-old Ford Focus to upgrade to a shiny Fiat 500L in January 2015.
But she didn’t know that she was going to be offered her dream job on the other side of the world a few months later. When Diana accepted the job, she knew she had to sell her precious car. She reluctantly put it up for sale in April, but it sat in a parking lot dropping in value until an interested party took it off her hands in six months later.
By then, the value of her car had dropped by 25% from the time she bought it even though she only drove it around for three months.
“A car isn’t an investment but a big ticket item with depreciating value. I didn’t foresee that I’d be moving to Singapore, and ended up losing thousands of dollars within a span of a few months,” Diana said.
She advises that you should always prioritise saving money above a purchase of a car. Once you feel like you have enough stashed aside, you can then consider splurging money on convenience. And because Singapore has one of the most convenient public transport systems in the world, buying a car isn’t necessary at all.
2. A Trekking Pole
With a passion for trekking, our SEO Manager Lady Allyson has spent countless weekends climbing the mountains in Asia. Her worst purchase comes in the form of a rather expensive trekking pole that was too bulky to carry about.
Lady bought it as a last minute decision when she was on the way to a mountain in Davao. Because she was in a rush, she grabbed the first pole she saw. It was neither the cheapest nor the smallest, and while it helped her during her trek, it was too bulky to bring it home.
So she did what any person at the check-in counter of the airport would do: she ditched it. Sure, it wasn’t a big ticket item, but it was a waste of S$30 that she could have used elsewhere.
“My mistake was making a rash purchase. If I studied the products on sale, I could have gotten a trekking pole for long-term use,” Lady said. “Spend more time comparing the different items instead of wasting money on something you’ll end up throwing away.”
3. An Endowment Plan
Even I made a purchase that I regretted. It wasn’t a bad purchase per se, but one that I feel uncomfortable making until this day.
While shopping around for a home loan, I had a chat with a bank representative about another product most people don’t understand much: endowment plans. Endowment plans aren’t scams; people just misunderstand that the returns shown to them are not guaranteed.
The endowment plan I’ve signed up for requires a minimum commitment of 10 years before I can “break even” when withdrawing. Each month, I deposit S$600 in an account I don’t have access to. But what I didn’t foresee was a financial emergency that came two months after I made the commitment.
Now I don’t just have to pay S$600 a month; I’m stuck with a loan as well. On hindsight, I should have saved at least six months worth of my monthly salary before I voluntarily made a commitment to put aside money I cannot touch. On hindsight, rainy day money is something everybody should have in case of emergencies.
Read This Next:
5 Money Matters to Wrap Up Before 2016 Starts
INFOGRAPHIC: Why Your CPF Savings Are Not Enough for Retirement