facebookDo you find that as you earn more, you tend to spend more also? - Seedly


07 Jun 2019


Do you find that as you earn more, you tend to spend more also?

I'm 35 this year with 2 kids, as my wife and I earn more, I realised that our expenses have been rising (from kids enrichment to hobbies). Just wondering is this a common trend and how can we look to save more in the coming years?

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Christopher Tan

07 Jun 2019

CEO at Providend Ltd

Hi Anonymous, thanks for the question! I totally understand what you mean. I have 2 pretty grown up kids myself (age 17 and turning age 21 this year). As a parent, I understand that love for our children and our willingness to spend more on their education and personal development. Every child is different and I am not going to "tell" you whether you should be spending more on your children or your family or not. I would just like to share some principles with you and hopefully you find it helpful and applicable to you.

  1. Spend below your means. We all know that we should not spend above our means. We also know that we should spend within our means. But it might be better to spend below our means.

  2. Money is an enabler, not a goal

Many people view money as a goal, as a definition of success. But money is an enabler that gives us options. Money that are not used is not our money. The question is how then should we use our money? That brings me to my last point:

  1. Spend your money to live your life now and not later

There is a current movement called FIRE (Financial Independence Retire Early) which seems to advocate this mindset. Whilst I understand the merits of this philosophy, my problem with this is that we might miss living life altogether and that future that we save towards might never come, because we might expire before we retire. We might miss building memories with my family while my kids are still young and my family is still around. The growth opportunities that my children should get may pass me by if I don't spend the money now.

So what is my point? It is all about balance. A balanced view of how I see money and how I use money. So for me, I will say, go, go spend below your means. As your income goes up, spend more for all you want, but still below your means. But spend the money to build memories now (like going for familiy holidays). Spend money on purposeful activities (like your children's tuition, enrichment classes) . Spend money to help others. Spend money to live a life now (like hobbies). But at the same time, set aside sufficient money (not excessively hoarding it) for the future when you no longer earn an income or earn a much lower income. At the end of the day, if your money has been well spent to live a meaningful life, you are making the best use of your money.

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I definitely feel that with kids, it's a whole other ball game! Because with children, it's not just about yourself anymore, but another human that you have to care and provide for until they are able to do so themselves.

I do feel that spending on children has increased over the years. As a millenial, if we thought that we had lots of tuition as children; I think this generation of kids has that PLUS extra-curricular activities. Additionally, parents are also buying more branded goods for their children.

Expenses increase because of increase in consumption. So you look at the factors that drive consumption.
1. As kids grow up, they eat more, have more activities = consumption increases
2. As you grow old, you fall sick more, insurance premium increases = consumption increases
3. As you face ticking time to pursue hobbies parked at back seat for years = increase consumption
4. As you use money to buy time = increase consumption.

All these increases in consumption are independent of your salary increase. Except maybe #4 where because your job leaves you less time as a result of a more demanding job that pays more.

Yeah, but I try to remind myself to limit my expenditure. Jobs are being disrupted rapidly these days, never know when you might be out of job.


27 Sep 2018

Undergraduate at National University of Singapore

Yes, generally that is true as we will satisfy our wants even more due to higher spending power. But...

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