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saving methods

  1. #21

    Join Date
    May 2006
    Posts
    5,491

    One can get a credit line for emergencies or spending spikes. The annual costs can be quite low in comparison to the ROI that one may receive on the investment. No need to keep money.

    bdw likes this.

  2. #22

    Join Date
    Dec 2018
    Posts
    298

    One of the best pieces of advice I received as a young man was "pay yourself first" - however much you want to set aside for long term goals should come out of your account each month by auto-pay. You set it up once and the forget it.

    If you don't want to research individual stocks, bonds etc, pick a low cost index fund like HK Tracker (HKEx: 2800) and get your bank to automatically buy your chosen amount of units for you every month.

    As for shorter term goals, you can achieve a degree of separation from your day-to-day money by using term deposits. The interest rates suck (a little less badly than leaving it on call in current or savings accounts) but it is a degree of accounting separation without opening a separate bank account or resorting to expensive gimmicks like FX deposits (unless you need those foreign currencies longer term).

    Example. Set up a standing instruction to buy HKD5,000 worth of Tracker units each month and then forget about this money and the monthly deduction. That's your long term savings. Whatever other money you have left at the end of the month beyond your emergency fund goes on term deposit for 1, 2 or 3 months and, each time it matures, add any spare money from your current/savings account to the term deposit and then roll it over again.

    nivantj likes this.

  3. #23

    Join Date
    Mar 2009
    Location
    Hong Kong
    Posts
    1,867

    I just calculate my living costs for each month e.g. transport, food, mortgage. I also take out a chunk for living costs which i don't need to pay every month e.g. tax, bills, gym membership.

    I then know how much disposable income i have to spend per month on average. And there is always an amount to pay for something which starts ringing alarm bells.

    If i have a big purchase, such as $10k mattress, I will just work out how long I have to cut my spending until its paid off e.g. $1k less to spend per month for next 10 months.


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