How do you guys strike a balance between spending (enough to collect miles) and saving?

Always spend within your means, needs and Budget. The miles earned from your spending is a bonus and should not be driving your spending. If you are falling short of miles, there are ways to purchase miles at a fairly cheap price (eg using UOB’s prvi pay)

Hi Charmaine,

Good question. In general, I would advise spending within your means first. Seedly has a 50-30-20 rule, I have my own 40-30-20-10 framework.

Eitherway, you'll realise that the 20% portion is consistent in both, which is the minimum you should strive to save and invest. I would say that the 20% is first saved aside till a figure that is 12 months of expenses, and then after that, this 20% can be channeled to to investing (note that it doesn't mean you start deploying 20% outright)

If you have been tracking your expenses, you'll roughly know how much you are spending on. The key is to ensure that if you've committed 20% to save/invest, then stick to it. Unless there is a major change in your life, such as a house or the arrival of a baby, you will have to be disciplined and diligently set aside this 20%. Pay yourself first.

On the spending side, maximize all and any opportunity to earn miles. This means beyond general spending at 1.2-1.5 mpd, you will have to maximize 4 mpd cards, sign up bonuses (SCB X card for example), 7-10 mpd on hotel bookings, and even cancel cards to refresh your new to bank status. I just paid for hawker chicken rice with Favepay yesterday, so I hope that gives you an idea of just what it means to maximize. Of course, to come up with the right strategy of cards will require you to understand what you spend on, so that the right cards can be selected. If you fear that your earned miles will expire, then start with cards that don't have an expiry first. OCBC 90N, Citi PM and DBS Altitude are some cards to consider.

One thing you need to be aware of is never to spend on something you don't need just for earning miles. Pay your bills in full. If not, it won't make sense.

Personally, I put spending on cards where possible, but only if I really need to buy the item, and every single cent that I don't spend is earmarked for investment. So my 40-30-20-10 is more like 30-0-60-10. I'm not a good example I'm afraid. I invest monthly an amount twice of what I spend on myself.

Firstly, we will need to understand our personal cashflow. Through this process, it allows us to have a complete and detailed understanding on our earning ability and our spending habit. You may read some of the key points here: https://www.blog.pzl.sg/understanding-your-pers...

From our cashflow, we will create a monthly budget. This is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly...

The budget is a benchmark on how much I will automatically save every month. Consequently, my savings will always increase every month (thereby reducing my spending).

Next, we will need to differentiate between fixed expense and variable expense after we have analysed our cashflow. Thereupon, I will optimise my fixed expense to keep it to a minimum. Thereafter, I will maximise its value, e.g. by charging the bills to a credit card to collect miles.

For variable expenses, I have a habit to reduce this cost whenever possible. After you have read on how I do my budget, you will understand that the unspent money from the variable expense becomes my money - to spend it on an item that I like, e.g. holiday trip. Hence, I will always have motivation to reduce this expenditure.

Through a systematic way of understanding my cashflow and building an automated budget, I am able to successfully help a few hundred individuals optimise their expenditure while keeping it low.

At the end of the day, we need to master our money and not be its slave.

Here is everything about me and what I do best.

Hi Charmaine,

I feel that regardless of your earnings, the 50-30-20 rule is actually a pretty good yardstick. So saving about 20%, and spending 50%.

Read more about it here.

Bear in mind to never overspend out of your means to, and only spend on your needs not your wants. So having the financial discipline to restrict your spending is crucial. A reminder for myself is that miles collection is a by-product of spending, instead of the reverse (where you wanna collect miles hence you spend more).

Should you have difficulties hitting a spending mark to collect a certain amount of miles by a certain period, it could be worthwhile considering cards with miles that do not expire such as Citi PremierMiles or DBS Altitude card.