Five Affordable Fuel Efficient Models You Should Consider

With the hike in fuel prices, car companies are expecting to see renewed interest in fuel efficient models, especially those priced below RM100,000.

If you are in the market for a new car and fuel efficiency is a priority for you, here is a selection of five affordable models which we think you should consider.

The keyword here is affordability. So although there are many models with highly efficient engines out there, many of these models are not included simply because it is priced out of reach for a majority of us that will feel the pinch the most.

For example, the traditional poster boy for fuel economy - the 3.9-litre/100 km (quite achievable in the real world) 2013 Toyota Prius starts from RM139,900. But you must be a special kind of miser to spend a D-segment category price for a C-segment hatchback, but at the same time is concerned about a twenty sen/litre increase in petrol prices.

The following guide is aimed at the average family. Here's our list of recommended low fuel-sipping cars.

5. Toyota Vios (starts from RM 73,200)

Manufacturer's claimed fuel consumption (for the outgoing model): 6.1-litres/100 km (Australian Design Rules, combined cycle)

Real-world urban driving (outgoing model): Around 6.5- to 7-litres/100 km

Very few other cars polarise themselves as much as the 2013 Toyota Vios does. It is the favourite target for boy racer/enthusiasts crowd, who often deride the Vios for its low list of features and its poor driving characteristics.

While we agree that Toyota needs to buck up in upgrading the Vios' specifications to match that of the competition, there is nothing wrong with a boring car. Not everyone feels the need to have a deep sense of attachment with their tool of transport. The sheer dominance of the Vios on our local roads is a testament to this.

An all-new next-generation Vios will be launched in October, but as it will carry over the current model's engine and transmission, fuel economy numbers published here are unlikely to change much.

The Vios comes in last only because of its relatively higher price and inadequate safety features. The cheapest automatic model is estimated at RM73,200. Even the highest grade model is not equipped with electronic stability control (ESC), or as Toyota calls it, VSC.

4. Mitsubishi Mirage (starts from RM 56,992)

Manufacturer's claimed fuel consumption: 4.8-litres/100 km (New European Driving cycle, combined)

Real world urban driving: Around 5.5-litres/100 km

The cheapest car on the list, this tiny little 2013 Mitsubishi Mirage may be small but it is nothing like a Perodua Myvi. For one, this is a global product, built at Mitsubishi Motors' plant in Thailand, which also exports the Mirage to many major overseas markets including Europe and Japan, so there is a strong reputation for quality.

Safety features like dual front airbags, ABS with EBD and BA, front seat belts with pre-tensioners, and ISOFIX child seat mounts are available as standard. It also scored a reasonable four stars at the ASEAN NCAP frontal collision test.

Legroom is surprisingly generous and Mitsubishi says it matches that of  slightly larger models like the 2013 Suzuki Swift.

The secret to all this is its generous use of high tensile strength steel and an efficient pairing of a 1.2-litre engine and a CVT transmission.

The idea of a 1.2-litre engine may seem alien to many Malaysians, but hopefully higher fuel prices will make us understand why such engines are common in developed countries, where the Mirage is sold with an even smaller 1-litre engine.

The only reason it wasn't ranked any higher is because it misses out on ESC, which the FIA says buying a car without one is like buying a car without seat belts. To read more tips on shopping for a safe car, read our Guide To Choosing A Safe Car To Buy here.

Mitsubishi will be introducing a sedan version of the Mirage, called the Attrage later in November..

3. Honda City (starts from RM 85,980)

Manufacturer's claimed fuel consumption: 6.6-litres/100 km (Australian Design Rules, combined)

Real world urban driving: Around 7-litres/100 km

A local favourite, and it is easy to see why. After nearly four years in the market, the 2013 Honda City still looks fresh, with a mild hint of premium ambitions.

The higher grade E and E+ models comes equipped with ESC (Honda calls it VSA) and thus these two models qualify for the maximum five-star ASEAN NCAP score for adult occupant protection against frontal collision.

The best thing about the City is that it is an entry-level sedan that doesn't look, drive or ride like one.

2. Honda Jazz CKD (RM 74,800)

Manufacturer's claimed fuel consumption: 6.7-litres/100 km (Australian Design Rules, combined)

Real world urban driving: Around 7-litres/100 km

Still the most practical hatchback, the locally-assembled 2013 Honda Jazz is like the automotive equivalent of a Swiss Army knife. Its seats can be configured in a variety of combinations, adaptable for anything from an Ikea shopping run, to a visit to your neighbourhood plant nursery. Don't let its small exterior fool you, this car packs Doraemon's magical pouch.

It also comes with VSA as standard.

In case you are wondering why we chose the conventional petrol engine powered Jazz rather than the 2013 Honda Jazz Hybrid, it is because we feel the Jazz Hybrid is too much of a compromise (lower specifications) without delivering significantly better fuel economy in real world driving conditions.

The Jazz Hybrid's claimed 4.6-litre/100 km is quite difficult to achieve in the real world.

As a mild hybrid, it still requires the petrol engine to be fired up when pulling away from stand-still and the frequent juddering from the engine start-stop cycle can be quite uncomfortable in heavy traffic.

Plus, it doesn't have an electric powered air-conditioning compressor and thus cabin cooling capacity has to be compromised when the petrol engine is shut down during idle-stop.

The regular Jazz is good enough for a majority of fuel economy conscious users and more importantly, it is about RM15,000 cheaper than a Jazz Hybrid.

1. Toyota Prius c (RM 97,313)

Manufacturer's claimed fuel consumption: 3.9-litres/100 km (Australian Design Rules, combined)

Real world urban driving: Around 4.5-litres/100 km

The 2013 Toyota Prius c is among the most fuel-efficient cars on the market, rivalling the more expensive Prius. Fully imported from Japan, it packs seven airbags, VSC, whiplash injury protection front seat headrests, cruise control, Smart entry, and, it could be yours for slightly more than the price of a much poorer equipped Vios TRD Sportivo.

It is a full hybrid, so it drives much smoother, can be driven off from stand-still in pure electric mode and with a beltless engine bay, the air-conditioning is independently powered by a battery. Thus, you continue to enjoy the maximum air-conditioning cooling performance even when the engine is on idle-stop.

In case you are wondering about hybrid battery replacements, we have mentioned it many times in the past that this is only a myth. More on that here.

The downside to the Prius c is with its interior, which is smaller and less practical than the Honda Jazz, and the layout of the cabin that although is practical, looks rather spartan when compared to the Jazz.

As a small hybrid, the Prius c is best used as a city car. For highway drives, you wouldn't want to be in this car for very long.

What are the Australian Design Rules and the New European Driving Cycle?

Fuel economy testing are conducted in a controlled lab environment, with a technician driving the vehicle over a rolling-drum by following a very specific driving cycle as displayed on the screen ahead. 

As Malaysia has no regulation governing fuel consumption testing, there is no clear guideline for car manufacturers to follow on how to calculate their vehicle's fuel economy, so most of them don't publish the information.

If the model is offered in Europe with a similar specification, the manufacturer may publish fuel economy figures based on the New European Driving (NEDC) cycle test methodology. NEDC is based on the EEC (European Economic Commission) R101 regulation adopted by the European Union.

But some models like the Vios, City and even the Prius c, are not sold in Europe, so the data is not available.

As an alternative, we will publish the numbers based on the Australian Design Rules, whose testing is very similar to the EEC R101 standard. However this is only applicable if the said model is sold in Australia, with the same engine and transmission.

Source: http://www.livelifedrive.com

Rather a used cheap car and medium-cost flat, than a new car and a pipe dream

Open Season by Teh Eng Hock

Teh reckons youngsters should give  up consumerist luxuries to save at least 30% of their income by investing in property.


“WAIT. The bubble’s about to burst.” How many times have we heard this advice being dished out to prospective housebuyers?

I’ve heard such words of wisdom countless times since I joined the workforce, and I’m pretty sure these famous words have been circulating for much longer.

And after almost a decade in The Star’s newsroom, I would like to report that the speculated property bubble has remained intact.

I am not qualified to say that there is no bubble. Nor am I denying that property prices are ridiculously high.
But the fact remains that residential properties, particularly in the Klang Valley and Penang, have doubled in value every three to five years.

If you have played the waiting game, you might consider screaming at whoever advised you against investing in a stack of bricks.

 

Rather than whine about matters beyond our control, what do we do?
Should we just wait for the government to impose more pricing controls on real estate?
Should we blame the developers for profiteering, or property speculators for inflating the prices of homes?

Will all the complaining make prices of homes more reasonable? Prices were relatively high when our grandparents and parents joined the working world too.

Yes, they probably voiced their grouses at the local kopitiam (although the Gen Y do seem louder with the help of social media).

But the Baby Boomers and Gen X took an extra step.
They knuckled down in the face of adversity, worked harder, spent prudently and bought that family home we grew up in.

Today, it has become second nature to put all blame on the government.
“The government is not doing enough. The housing policy is wrong, etc.”

In his inaugural address, American president John F. Kennedy’s famous quote was: “Ask not what your country can do for you, ask what you can do for your country”.
 
Let’s meet him halfway and ponder: “What can we do for ourselves?”

Real Estate and Housing Developers’ Association’s (Rehda) immediate past president Datuk Ng Seing

Liong was spot-on when he advised youngsters to begin buying property early in their careers, especially for those located in hotspot areas.

 

“I understand that a car is a necessity for the younger generation but bear in mind that property prices will always go up,” he said in a recent news report.

If you’re a smoker, do your lungs a favour and give up smoking. And cutting down on a few jugs of beer helps too.

That means more mixed rice at the hawker centre instead of expensive steaks.

Imagine your first car being a used Proton Saga. Do you need new clothes and shoes every year? If your iPhone 3 is still running, must you really upgrade to the iPhone 5?

It is important to be able to distinguish between needs and wants.
A common financial advice is to save 10 to 20% of our monthly salary. Given the rate of appreciation for properties, that advice is no longer relevant.

Let’s approach the situation the other way round.
Decide how much you need for food, transportation, rental and other necessary expenses. And save every extra sen.

A fresh graduate today would be earning close to RM3,000 monthly. If he lives very prudently, he can save about half his salary.

And the money saved can be placed in unit trusts or invested in the share market for faster growth. Even by parking the money passively in fixed deposits, he would be able to cough up enough for a downpayment for a RM500,000 apartment in three years.

If you can’t save half, you probably can save 30%, which would be enough for the downpayment in five years.

And that’s without factoring any increment in your salary.
And almost no one buys their ideal home in their first transaction. It should be comfortable enough to call home, and decently located to work and amenities.

I started with a 900 square feet medium-cost apartment five years ago, and although it wasn’t my dream home, I am happy to disclose that it has appreciated by more than 100%.

The only way to keep up with the rapid appreciation rate is to lock down your first property and watch your investment grow.
The first few years will be tough on your lifestyle, but it gets better from then on.

Not to mention my love life. It doesn’t matter now, though. A girl who won’t date me during lean times was definitely not wife material, and I’m happier having found someone who would be with me through thick and thin.

I am in the process of upgrading to a bigger, and hopefully nicer, apartment (which was half the price four years ago!).

And I doubt it would be my final move. For my dream house is a mansion with a swimming pool and I have another 30 years prior to retirement to chase that dream.

HSBC : Malaysians not Saving Enough for Retirement

KUALA LUMPUR: A survey of 1,000 people in Malaysia byHSBC revealed that 43% of respondents are inadequately prepared, and that one in 10 are not prepared at all for retirement.

The survey conducted in July-August 2012, found 28% of Malaysian respondents have never saved for retirement, including 18% of those in the 55-64 age group.

According to HSBC, financial security after retirement is an issue that will affect millions of Malaysians, especially in light of the United Nation’s forecast that by 2050, there would be one Malaysian aged over 65 for every four aged between 15 and 64.

One interesting highlight from the survey is the question of how long respondents thought they would live after retirement and how long they thought their savings would last.

The answer: Malaysians expected to live 17 more years but their funds would only last them 12 years.

Many thought that in order to enjoy a comfortable existence after retirement, they would require 81% of their working age income. On average, respondents were of the opinion that they need a household income of RM76,900 a year.

As only 46% of those surveyed were regular savers, the crucial question is: Why are people not saving for retirement?

Half of those not saving for retirement said they were being held back by the cost of day-to-day living, and 30% believed that they were saving or investing in a “different way”.

The two biggest obstacles people cited for hampering their ability to save are buying a home (48%) and paying for the children’s education (33%).

On a brighter note, HSBC says Malaysian respondents are amongst the most likely to choose saving for retirement (59%) over saving for a holiday (37%).

“Nevertheless, a significant proportion of Malaysian respondents are willing to dig into retirement savings as a means of dealing with an unforeseen crisis. Taken together, this shows that whilst focusing on the longer term helps to boost savings for retirement, the readiness to draw on long-term savings in an unexpected crisis will act to reduce the value of retirement savings for some Malaysian respondents,” it stresses.

The survey showed that the most common methods of retirement financial planning are informal, such as people’s own approximate calculations (53%), and HSBC notes that people who got professional advice tended to save more.

Of those who used a professional financial adviser, 60% saved more for retirement as a result. And of those who consulted a professional financial adviser to develop a written financial plan, 67% saved more for retirement.

In comparison, among those who plan their own retirement, only 52% saved more.

The most popular retirement aspirations among Malaysian are 1) to spend more time with friends and family (75%), 2) to take frequent holidays (62%), and 3) to start a business (48%).

The biggest fears surrounding retirement were financial hardship (68%) and poor health (59%).

Source: Star online

MIEA: No threat of property bubble

 

KUALA LUMPUR: The local property sector is expected to register a steady 10% growth in value this year and there is no threat of a property bubble, according to Malaysian Institute of Estate Agents (MIEA) president Siva Shanker.

“We are expecting a nice steady growth of 10% maybe 12% or 13% if we are lucky. The growth won’t echo the phenomenal growth of about 30% like we did previously,” Siva said in a Property Market Outlook: Post GE13 briefing yesterday.

He explained that the property sector was relatively slow in the first few months of the year due to the uncertainty of the General Election.

“As soon as the election was over, there was a frenzy of activities in the sector. There were pent up demand in the first few months,” Siva said, adding that the market is “playing catch up now”.
In addition, he said there were no indication that prices would trend downwards. Siva said there were also a changing trend whereby multifunctional property where one can work, play and live in the same area is in demand now.

 

“Gated and guarded property is the in thing now and it will be a hard sell for developer if they don’t provide this,” he added.

Knight Frank Malaysia managing director Sarkunan Subramaniam noted that the Bank Negara has adopted proactive measures to ensure there is no property bubble in the country. He said the measures were put in place by the central bank to cool things down.

Meanwhile, MIEA immediate past president Paul Nixon said of late many smaller and newer investors are investing in commercial properties by pooling their resources and making collective purchases.
He said investments in commercial properties, are generally more expensive in comparison to residential properties. Paul noted that newer developments tend to take three to five years before commercial activity and occupancy reaches optimum levels.

 

Knight Frank’s Sarkunan said the KL City (71%) accounts for the bulk of office market supply while the remaining 29% comes from KL City fringe. By 2015, office supply in KL City and KL fringe is expected to grow by about 13.7% and 33% respectively. Sarkunan added that as at mid-2013, more than 1.1 million sq ft office space has been absorbed.


Source: Star Online 

4 Reasons Why REITs Are Better Investments Than Real Estate

This article is written by REITSWeek, a subscription-only journal on REITs and Listed Real Estate Securities delivered weekly to institutional and individual investors.
 

Scottish American industrialist and philanthropist Andrew Carnegie once said that 90 percent of millionaires became so through owning real estate. This wisdom, though dispensed in the 18th century, is a wisdom that has persisted today judging from the popularity of real estate as an investment class.

There is nothing inherently erroneous in this advice despite the carnage that has unfolded in recent years in the real estate market. As an asset class, real estate investments generate a reliable stream of income besides holding the prospect of capital appreciation. And unlike the yesteryears when real estate investments are within reach of only the very wealthy, prospective investors today can participate in real estate investments through a Real Estate Investment Trust (REIT).

But the popularity of REITs in recent years has brought about a perennial debate as to which is a better mode of investment, buying real estate physically or holding it in a REIT? Each method has its own merits but this article we will discuss four advantages that REITs investors have over traditional property investors.

 
Scalability

Real estate, be it a single building or an estate, will require constant maintenance and repair. Certain property types such as shopping malls will require even greater maintenance costs as they will need to sustain a decent façade in order to attract shoppers and continue generating income. An investor who puts his money on a single property will need to consider the expenditures on leaking roofs, faulty plumbing or termite infestations as part of his investment costs. In some cases, these costs can be quite hefty and may not be easily recoverable from the tenant.
In REITs, building maintenance costs, or more commonly referred to as capital expenditures (CAPEX), are borne by the REIT managers and are in effect distributed across many shareholders. In some cases, favourable lease terms allow these costs to be passed on to the tenants, practically absolving the REIT investor from any sort of building maintenance costs. As a REITs investor, it is unlikely that you will see CAPEX making significant impact on the returns of your investment. This is the scalability that REITs investors enjoy over property owners.
 
Diversity

Owning a single property would usually mean that your fortunes are pretty much tied up in the sector that your property is vested in. For example, if you own a small factory complex, it is unlikely that you will benefit from the surge of tourist arrivals in your country. And should the demand for manufacturing slows, you may be in trouble finding a tenant for the property.
REITs investors are able to expose themselves to several sectors of the economy at any one time by distributing their investments across different REIT categories such as Retail REITs (to benefit from surges in consumer spending), Hospitality REITs (to ride on tourist arrivals) or Healthcare REITs (to benefit from increased spending on medical services). This minimises the risk that an investor is over exposed to just one particular sector of an economy. To achieve the same level of diversity with traditional property holdings would require a very hefty investment.

 


Professional Management

An investor who decides to buy and manage a property as an investment will usually have to depend upon himself in managing the property including renovations, sourcing for tenants and making sure that the building adheres to local safety regulations. These functions can be outsourced to third parties, but this would severely increase the costs of managing the property and erode the returns on investment.
REITs on the other hand are managed by dedicated teams of REIT managers who make it a daily endeavour to look for growth opportunities while keeping borrowing costs low. REIT managers are also very experienced in financing and asset enhancement strategies, often increasing the value of the properties that they manage over time. This is the advantage of having a professional management that REITs investors enjoy over traditional property investors.


 

Favorable Tax Rulings

In many economies, building owners are liable to annual property taxes, administration fees and stamp duties, on top of paying personal income taxes as an investor. The combination of these taxes can be very overwhelming.
REITs on the other hand are largely exempt from paying taxes at the REIT level in virtually most economies as long as they distribute at least 90 percent of their income to shareholders. In economies like Singapore, the government has gone even further to exempt REITs investors from paying taxes on capital gains and dividends from REITs. Tax rulings vary across the different economies. But one similarity that these economies have is the markedly favourable tax rulings that REITs investors enjoy over the traditional property investor.

Singaporeans Are The Fastest In The World To Become Millionaires

Singapore is home to some of the wealthiest people in the world. 

It takes most Singaporeans less than 10 years to become a millionaire. That is the fastest rate anywhere in the world, says a wealth report released by the Barclays Bank on July 5, 2013 in Singapore.

The Bank surveyed 2000 high net worth individuals globally in early 2013 to ascertain how entrepreneurs, business leaders and investors make, spend and share wealth.  The respondents were individuals with net worth of more than $1.5 million. A  fifth of the 500 interviewed were based in Asia.

While the popular belief is that the wealth of millionaires in Singapore has come from the dramatic rise in property prices over the years,  that is only partly true.  According to the survey, 72% of the wealth was made from personal investments, followed by 58% from property and 55% from savings through earning and bonuses. (Respondents could choose multiple answers).

The financial crisis too, despite its seismic economic, political and social fallout, the world over, enabled close to 50% of the rich Singaporeans to increase their wallet size. This was mainly on the back of a buoyant Straits Times Index (STI) that doubled in value from 2008 to 2013. Regional bourses in Thailand, Indonesia and Malaysia showed a similar vibrancy. A quarter of Singaporeans interviewed said their wealth had jumped five-fold or more over their lifetime.

 
However, considering the highly -integrated nature of the island state’s economy, Singapore’s rich also experienced the highest fluctuation in their fortunes; more any other country.   Almost 70% said their wealth was volatile and moved “a great deal” overtime.

When it comes to spending, despite headline grabs of $26,000 cocktails, Ferrari-speckled roads in Singapore, the survey reports that Singaporeans  use 61% of their money for saving  and investing, just a notch behind their Chinese brethren in Hong Kong at 66%, and ahead of mainland Chinese who  would put 58% of their money to work in banks or the stock market. The second most popular use of money among Singaporeans was on travel and social activities (16%). Only 7 per cent spent on cars, jewelry or collectibles. This is in sharp contract to the new rich in India where 17% are spending on tangibles like cars, homes or jewels.

 

And what is the psyche of a typical Singaporean on sharing wealth?  He would rather gain personal fulfillment and a sense of purpose in life.  While 13% Singaporeans prefer to pass on their assets in inheritance, more than 50% want to give their wealth to charity. And they prefer to do it in their lifetime.

 In Pictures: Singapore’s 40 Richest People

Source:  http://www.forbes.com

7 Habits of Highly Frugal People

The book 7 Habits of Highly Effective People has sold over 15 million copies since it was first published in 1989, teaching people all over the world how to live happier, more successful, and more satisfying lives. One of the prevailing themes of the book is that to change your life, you need to change your attitude.

No one else is responsible for what happens to you but you, so you can either complain about the things you don’t like in your life or you can set about changing them. Not surprisingly, this directly relates to the state of your finances. This post is a financial application of the concepts presented in the book.

If you’re tired of living paycheck to paycheck, having your phone regularly cut off, or making excuses to skip dinners with your friends, then you can use these seven habits to take control of your money situation and live a happier and more frugal lifestyle.

Habit One: Be Proactive

The first habit of highly effective people is that they take responsibility for their own lives; if they fail, they have no one to blame but themselves. Regardless of how you were raised or how you were treated at school, you can choose your behavior now. Being proactive means understanding that YOU are in control of your day-to-day interactions, and thereby, the direction your life takes. This is in stark comparison to a reactive person, who is often affected by their environment and will find external sources to blame for their behavior. For example, if the weather is good, they’re in a good mood, but if the weather is bad, it affects them and they blame the weather for their bad mood.

[Here are 6 action steps to take when you feel financially vulnerable.]

What most people forget is that though you can’t control the stimulus, you can control your response. One of your most important choices is your words; the language you use is an effective indication of how you see yourself. If you use proactive language, such as “I can” or “I will,” you’re starting with a more positive attitude than someone who uses language like “I can’t” or “I have to” or “If only.”

How to be proactive for effective frugality:

• Take the first step. You cannot take control of your finances until you make the commitment to do so; the more you ignore the situation, the worse it will get. Instead, take a long hard look at your finances — your budget, debts, income, and expenses, and try to understand where your money is going and where you can budget better. (To help you out, here are 25 ways to pay off your debt more easily.)

• Tell people. Using proactive language to vocalize your hope of being more financially responsible not only helps you crystallize your goal, but it can also help you avoid the peer pressure that makes budgeting and frugality hard. If you explain to your friends and family that you’re trying to live a more frugal lifestyle, they’ll be less likely to pressure you into one more round of drinks or another dinner out.

• Listen. Listen to yourself and to the reasons you give each time you make a purchase outside of your budget or decide not to put spare money into your savings account. Taking the time to stop and listen to the reasons you give yourself for spending more than you earn will give you the opportunity to hear just how shallow many of those reasons are. This can stop you from making purchases that impede your goal of effective frugality.

Habit Two: Begin with the End in Mind

Those who are effective in achieving their goals are able to envisage their desired end result in spite of the obstacles. Highly effective people adhere to this habit based on the principle that all things are created twice; there is first the mental creation, then the physical creation. The physical creation follows the mental creation the same way that a building follows its blueprints.

If you don’t visualize what you want, then you’re at risk of other people and external circumstances influencing your life – because you’re not influencing it yourself. Instead, begin every day and every task with a clear vision of where you want to go and how you’re going to get there. Make that vision a reality with your proactive skills from habit one.

How to visualize effective frugality:

• Define your goal. There are many ways to live a frugal lifestyle, and you need to decide how frugal you want to be. Do you want to be debt free, build a savings account of a certain value, or live on one income in a two-income household?

• Decide how you’re going to get there. This will again draw on your budget, but you need to be aware of the obstacles that are standing in your way. These may be literal obstacles, such as credit card debts, or they may be obstacles you’ve identified in your behavior. An example of a behavioral obstacle would be spending $10 every day on junk food on your way home from work, because you’re starving. Instead, you could be packing an inexpensive granola bar to keep you going until dinner. Or, do you find that when you go shopping with your sister, she always helps you justify a frivolous purchase, when you could leave your credit card at home?

MoneyNing Tip: Make sure your goals are SMART! 

Habit Three: Put First Things First

Knowing WHY you’re doing something is an effective motivator in helping you transform a mental creation into an actual physical creation of your goal. Ask yourself what the things are that you find most valuable and worthy to you. When you put these things first, you’ll be organizing and managing your time around your personal priorities to make them a reality.

For many people, it’s hard to say no, but this is exactly the skill you have to learn to keep your goals as your first priority. While we are constantly told we can have it all, in reality, having it all is really about prioritizing what is most important to YOU to have, and then focusing on that.

How to put effective frugality first:

• Recognize the effects of your finances. You may not dedicate as much time as you should to managing your finances and practicing frugal principles because you feel there’s always something more important to be doing — whether it’s work, taking the kids to soccer practice, or getting ready for dinner with the girls. If your finances aren’t under control, however, and you’re regularly spending more than you earn, then they’re having a negative impact on every other aspect of your life, from your work to your family and friends. You need to recognize that being frugal is your first priority.

• Just say no. It’s easy to spend more than your budgeted amount each month when you’re worried about missing out on a dinner with friends, feel as though you have to cater a birthday party for your son and 50 of his closest friends, or don’t want to wear the same suit to a work conference two years in a row. If you recognize that you don’t have to take on everything and that it’s okay to say no, then you’ll find you’re more in control of your spending and your budget.

Habit Four: Think Win-Win

Most of us are taught to base our self-worth on comparisons to others and competition against our peers. We think we can only succeed if someone else has failed. We’re also taught that there’s only so much pie to go around, so if you get a big piece, then someone else is missing out. When you think like this, you’re going to feel like nothing is ever fair. As a result, many of us retaliate and take the pie before someone else can take it from us.

Thinking in a win-win mindset allows you to see mutual benefits from all of your interactions. By doing this, you’ll see that the pie tastes even better when it’s shared. If you can approach conflicts and problems with a win-win attitude, you’ll be able to express your ideas and feelings with courage, while still maintaining consideration for the feelings and ideas of others. When you have an abundance mentality, you’re able to see that there is enough for everyone, and that by balancing your confidence with empathy, you can achieve your goals while helping others achieve theirs.

How to create frugal win-win situations:

• Recognize that you don’t always know the full story. As you aim to implement frugal principles and stick to a budget, you may often find yourself thinking “it’s not fair.” It’s not fair that they get to go out to dinner. It’s not fair that they get a new car. It’s not fair that they get to go on vacation, and I don’t. Take the time to realize, however, that you’re only seeing a small part of the finances of your friends and family who seem to “have it all.” And though it’s hard to watch your best friend take a dream European holiday, or your brother buy the car you covet, you’ll get there, too — if you manage your finances frugally. And the best part? There will still be plenty of holiday destinations and fast cars when that time rolls around.

• Understand the difference between possessions and net worth. While your friends and family may seem to have a fuller lifestyle because their house is bigger or their car is newer, you need to consider that it could just be a facade covering their mountains of debt. True wealth is not measured in possessions, but in assets. When the value of your assets is greater than the amount you owe on mortgages, car loans, and credit card debts, then you have a strong net worth and are truly wealthy. By trying to live a more effectively frugal lifestyle, you’ll be able to achieve true wealth, rather than just a life full of stuff.

MoneyNing Tip: When building wealth, remember to look at the big picture, too.

Habit Five: Communication

At its base, communication is the desire to be heard and understood. Most people will listen with the intention to reply to what you’re saying, rather than to understand what you’ve said. To effectively communicate, you need to first understand. If you communicate with the sole intention of being understood, you may ignore what others are saying and miss their meaning entirely. Don’t just wait for your turn to talk; pay attention to what people are trying to tell you.

How listening can help you be effectively frugal:

• You are not the only person in your life. Chances are you’re married or in a relationship, have friends or children, or all of the above. As a result, you’re not the only person being affected by your decision to live a more frugal lifestyle. To be effective in your goal of frugality, you need to be able to listen to and understand the goals and behaviors of the other people in your life, too. Consider how effective your frugality would be if you were taking packed lunches to work and avoiding the afternoon coffee run, while your partner was going on shopping sprees during their lunch break. Instead of living a more frugal lifestyle, you’d really be saving on one end and spending on the other.

• Understand the goals and needs of others. While it’s important to explain your desire to live more frugally, it’s also important that you understand the goals and needs of those around you. This way, you can find a way to be more frugal without them having to give up all of the things that are most important to them. You can’t know what those things are unless you listen.

Habit Six: Synergize

Interactions and teamwork are some of the most important ways you can learn new skills and more effective behaviors. Synergizing is the habit of creative cooperation — working as a team to find new solutions to existing problems. Synergy is not something that just happens. It’s a process where you bring all of your personal experience and expertise to the table, enabling more effective results than those you would have been able to achieve individually. The whole is greater than the sum of its parts.

When you have genuine interactions with people, you’re able to gain new insights and see new approaches to your problems — ones you might not have thought of before.

How to synergize for effective frugality:

• Look for new ways. In a society that excels at consumerism, you’ve probably already realized that you need to find new ways of doing just about everything to be frugal. It’s easy to buy your lunch every day, but it’s more frugal to pack it. It’s easy to drive to work, but it’s more frugal to take the train. It’s easy to buy a new cocktail dress, but it’s more frugal to make one.

• Surround yourself with other frugal people. To be successful in your quest for frugality, surround yourself with like-minded people. Find people who are where you want to be by joining online frugal-living forums, striking up a friendship with a fellow coupon-cutter, or starting a sewing club. When you’re around people with the same goals as you, you’ll be able to share ideas and learn from each other.

MoneyNing Tip: Learn to embrace the positive influence of saving money.

Habit Seven: Sharpen the Saw

You’re the greatest asset you have on your journey to achieving the lifestyle you want, so you need to look after yourself physically, emotionally, mentally, and spiritually. Taking the time to renew yourself in these areas of your life will give you strength to maintain the previous six habits, which are essential for your success.

How to frugally renew yourself:

• Physically. By eating better, you’ll feel better. Take it another step further and start your own vegetable patch, which will save you money at the supermarket and be healthier for you. Exercising keeps you fit and healthy, and it doesn’t cost you anything to go for a walk, ride a bike, or skip rope in the backyard. To rest your body, you don’t need to go to a day spa; you can simply relax in the tub at home.

• Emotionally. Interacting socially with others allows you to make meaningful connections, and it makes you feel good. This can be achieved by chatting with the woman at the coffee shop or by calling your mom once a week.

• Mentally. Exercising and expanding your mind through learning, reading, writing, and teaching can be done frugally. Visit your local library, or volunteer at a school or retirement home to teach others a skill you may be taking for granted.

• Spiritually. Spend time close to nature and expand your spiritual self through meditation, music, art, or prayer. Take a quiet moment to center yourself and empty your mind before going to bed. Or, go for a hike and be grateful for the beauty of nature surrounding you.

Frugality doesn’t mean having to give up all the luxuries and things which make you happy. Don’t get burned out by developing habits one through six without taking the time to renew yourself. Frugality is something you want to develop and maintain for the long-term. Follow these seven habits, and you’ll be on your way to becoming a highly frugal person.

Adapted from: http://moneyning.com/