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Living on less money

WHAT goes up and never comes down? Besides your age, the price of goods and services is a possible answer too! In fact, of late there has been much talk about rising food and fuel prices all over the world. With prices going up and incomes relatively stagnant, it's very important that we learn how to live more prudently.

What does it mean to be Prudent?

We may not like to use this word in our daily lives but we are going to hear it more often today than ever. Ask our forefathers and most often than not, they would tell us that their lifestyle was synonymous to this word. People today may be earning more than their forefathers, much more, but somehow, we are constantly a little short of cash, what more to save.

It's really not surprising because in those good old days you can buy a bowl of noodles for five sen whereas today, even a beggar would snub at the five sen that you dropped into his bowl! Being prudent or frugal simply means managing in order to save. It means getting the most for your money. People who are prudent constantly find ways to save time, money and energy and let us state that being prudent does not mean being a "cheapo" / stingy or "kiam-sap", as the Hokkiens call it.

How can I practice being Prudent or Frugal?

There are many ways to live on less money and below are some suggestions to help you stretch your Ringgit further:

* Reduce your daily expenses - before you buy anything, ask yourself:

Do I really need this?

Can I get it cheaper somewhere else?

Can I get it for free?

* Cut something big out of your budget - go without a car (ouch!) and save on petrol, repairs, road tax, insurance and tolls. Or try scaling down on your car type, like going for lower capacity vehicles which usually have lower running costs.

* Use less - turn off the lights when not in-use and switch to energy-saving bulbs, cut-down on air-cons, wash full loads of clothes and dry them outside (rather than using a drying machine) and turn off all electrical appliances when not in use.

* Reduce waste - use paper on both sides (go paperless, whenever possible!) and use cloth diapers rather than disposable ones.

* Reuse or Recycle - compost waste, wherever possible (which can be used to plant your own vegetables!), grow a garden & turn your trash to cash!

* Make things last longer - mend clothing, re-glue shoes, and fix things before they're beyond repair.

* Find new uses for old things - paint old furniture, make quilts from old clothes and convert old large tables as desks. In other words, recycle, recycle, and recycle!

* Find cheaper substitutes - buy generic brands, shop at garage sales, rent instead of buy.

* You can also be frugal by taking care of your needs in creative ways, by sharing with others and buy using community resources. Here are some other ways to save:

* Find free or cheap entertainment. (we'll talk about this more later)

* Share big purchases.

Sharing can help you get what you need for less money. For example, you may share a ladder, drill and perhaps a vacuum cleaner with your neighbours. You can also share a lot of your children's play equipment with your friends or family members. Car pooling is another good example.

* Trade or barter for services or products.

Yes, we live in a modern world but who says that we can't practise bartering? In fact, you can trade or barter all kinds of things. If you can give a good haircut and your friend bakes very good cakes, trade your skills. You both get something you need and you both save money.

Think about your skills, the things you enjoy and the things you do well. Next, think about the skills and talents of your friends, family and neighbours. Check around to see if someone wants to trade with you. Start out with something simple and see how it works. Who knows, you may someday create another "eBay"!

How can I save money on Entertainment?

This is one area where we spend quite a lot without realising it. However, it's still possible to get good wholesome entertainment for free or almost free. Just because you're trying to save money doesn't mean you can't have fun. No matter what your income, make time to relax and enjoy (after all, you only live once!) It's probably even more important when you have less money. Without fun, it's hard to lead a healthy life. Here are some suggestions:

* Borrow books or attend seminars/programmes for free from the public library.

* Rent a video and try making your own kacang putih / cookies instead of going to the cinema.

* Visit the museums, zoos or the parks and enjoy the fresh air (depending on where you are!)

* Look out for free concerts, kid's programmes and family activities from the newspaper or through the tourist information centres or websites.

* Take an inexpensive class through community education, learn a new craft or revive an old interest. You can even convert that hobby into a business.

* Attend free book readings for adults and kids at your local bookstores or library.

* Walk, hike or bike to explore something new or visit a favourite place.

Watch the sun rise and set, find constellations in the sky, or perhaps start a project with your family like planting a tree (durian or mango trees would be perfect as that will help you save money on fruits!)

There are a whole lot of other ways to enjoy cheap, good and wholesome entertainment, if you care to look around (just get on the internet and run a search on "prudent lifestyle" or "frugal" and you'd be amazed as to what you'll find!).

In fact, another interesting activity that you may want to try is "people-watching"! Sit by the parks or malls and just observe what people do, how they walk, talk and laugh and how some parents "communicate" with their kids. There's a lot to learn by just observing other people and best of all, it's FREE!

Conclusion

Living on less money does not necessarily mean living any less. It's more about living our lives more abundantly and purposefully and not merely living for others. Being prudent in all aspects of our lives is the cornerstone of wealth-building.

If you hope to be financially free someday, you'd need to make prudent financial management a way of life, no matter what your income level or status.

* Mohamad Akwal Sultan is the chief executive officer of Agensi Kaunseling dan Pengurusan Kredit (AKPK), a Bank Negara agency that provides financial counselling and debt management services to the public, as well as promotes the prudent use of credit by individuals. For more information on AKPK, visit www.akpk.org.my

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