Recently, I heard from my spouse about a colleague who had just received his keys to his HDB BTO flat. The colleague, Brandon wished to take up a renovation loan and was pondering what his best options were.

Your cat spends more time on the sofa than you

Although my wife and I are not rich ourselves, we have managed to save up and pay for our minimal renovation when we received our flats a few years back. We were acutely aware that loans with their interest rate would set us back financially in the long term.
Thus, we were curious about other people’s perspectives on things

In many people’s opinion, financial planning is a process that one meets up with an adviser, understands their financial shortfalls and acquires solutions.
To sum it up, it is to make sure that your money is placed at the areas that you need and hopefully optimized to provide most value to you.
I opine that financial planning is applicable to all monetary aspects of everyone’s life.

Going back to Brandon’s case, my ever prudent wife objected strongly against taking a debt for the sake of renovation. She thought that if one could not afford, they should simply wait it out and just do the bare essentials.
Being a Devil’s advocate, I argued that Brandon may wish to move out of his parents-in-laws’ house asap and needed the place to be done up for sake of his kid.

However, as more details emerged about Brandon, I find myself agreeing with my wife more. Brandon was not only doing the essential renovation works but also going to put up nice cosmetic touches to the place such as false ceiling with LED lights, posh toilet sink and swanky bar counter
Brandon is going to build his dream home !

Frankly we could not understand the rationale – taking a larger loan will mean a higher monthly repayment or long period. Money that could be used for other areas.
Brandon is not a rich person, but using credit to chase a richer man’s lifestyle.

That was when I realised that financial planning was applicable to daily life.
We must try to optimize the use of our monies at every moment.For example, Brandon was in a dilemma on whether to install a more costly stove while he saved on his bed.
He hardly has time to cook but almost everyone spends a good amount of time sleeping.
A classic case of penny wise, pound foolish 

Other big money item in one’s life may be a car.
With the current COE climate and minimum loan requirement, the 2nd hand car often has steeper depreciation rate than new car nowadays.A friend who obviously had the moolah, went to purchase a 2nd hand vehicle just because he felt  reluctant to part with a large outlay if he had chosen a new car.
In my opinion, it is just not financially savvy as the per year cost of 2nd hand is clearly higher.

In daily life, people are often blindsided by the immediate cost.
That multi-functions laser printer seems to be more expensive than a low-cost printer but you probably pays more in total when you buy a fax machine to add on.

At the same time, we also need to know what we actually want before making our monetary decision.
Using the same multi-functions laser printer analogy, you are probably better off just buying that entry-level printer if you do not require a fax function.
It is really difficult to make good financial decisions all the time.
Sometimes we wish to buy that avant-grade coffee maker just because it looks so cool.
At the end of the day, we just have to step back from the sales pitch and relook at the big picture.
Hopefully we can do more with our hard-earned money that way.

Or we can just splash it on a brand new Mercedes-Benz S600.
We only live once, don’t we?

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