Friday, May 1, 2020

How Our Spending Fares During Circuit Breaker

It's been 3 weeks since we last entered a circuit breaker lockdown that commenced on the 7th April.

There are still about 4 more weeks to go before the circuit breaker is lifted so we are almost halfway through the mark (hang in there!).

Kudos to everyone out there who's worked hard in particular the healthcare officers and essential workers who still have to do their job out there everyday to protect ordinary folks like us.

Today, I wanted to review our expenses and spending again, in particular during the Covid period where we have to be grounded mostly at home and limited outdoor is allowed.

By doing this exercise, I wanted to see if our spending habits will perpetually changed post-Covid because if we can actually survive this period, then we are likely be able to survive post-Covid because the idea is that every expenses that are spent during this period is non-discretionary in nature.

Well, one thing I'm sure is we can all survive to do away without the traveling part anyway.

To do this, I've divided our expenses into Non-Discretionary vs Discretionary for Pre-Covid and Post-Covid.



Mortgages


This chunk took up more than 60% of the expenses even prior to Covid so it is rightfully the heaviest expenses category for us. Fortunately for us, we are currently still able to rent out our places, one just did an extension recently until Oct and another had a lease until 2022 so income is not so much affected yet.

During this period, I've also applied for the deferment of the mortgage payment which was an initiative run to help those who are struggling to pay. I've written an article on this to explain my reason why we decide to apply for it anyway.

So from a periof of May to Dec, we are going to feel like we are mortgage "free" because we've decided to kick the can down further.

Maintenance Fees


While we are able to defer our mortgage payment, the maintenance fees will have to continue to be paid quarterly so we are not able to defer on this one. This applies to both the place that was rented out.

Groceries


Groceries shopping is one category that have seen the largest increase during the Covid period.

With us staying at home eating mostly 3 times a day (breakfast, lunch, dinner) for 7 days a week, this category has gone up by more than 60% to $640 / month, which translates to about $160/week. In fact, we just came back from our weekly grocery shopping this morning and the bill came up to about $170, so this is just about there.

We hardly did any delivery during this period because it's not cost effective and I wanted to minimize contact with others anyway. We do takeaway some times at the hawker center near our place but it's mostly once a week at most.

Transportation


Transportation was limited to buses or MRT during period where we have to run out for errands such as grocery shopping or some urgent matters.

No taxi or Grab transportation during this period, and we also practice very minimally even prior to Covid.

Utilities


Electricity and water bills have gone up during this period because we've stayed more at home most of the time, used more electricity related to games or work and also we've utilized more of the aircon. Because the weather is so humid, I've also taken more shower than before because it just feels so stuffy (maybe the perception of feeling trapped in a small cage).

Internet & Phone Bills


No changes to this one as we are under the contract.

Nevertheless, I've stopped my Singtel Mio-TV earlier in the year to further save on this category as we are not using it as much as we would have liked (plus Liverpool is the runaway EPL leaders anyway).

Maid (including Levy)


No changes to this one.

We continued to pay her $700 for her monthly allowance and an additional $60 for her levy charges.

School Fees (2 Kids)


This is the second biggest categories after the mortgages and it is even more painful now that the school is closed but yet we have to continue paying for the school fees.

Fortunately, the early childhood and school was kind enough to reimburse parents for half the costs during this period so everyone else is taking a 50-50 on here, which I thought was fair given the school has to continue maintaining operations and paying for the teachers' allowance during this period.

There's also another half a year before my elder child enters primary one so we're hoping to see further savings on this one.

Taxes


Taxes is another category which I've taken a temporary deferment on until August so not paying for any taxes until then.

Travel


With the Covid, we probably see the biggest savings coming from the travel category because we are unlikely to travel until the year end at least.

In the past, we tend to go for two times traveling during the Jun and Dec school holiday but this looks like it's out of reach for now.

Nevertheless, I continue to accrue for my miles accumulation which we can put to a good use after this year should the Covid situation becomes a lot better.

Entertainment


We used to spend quite a bit of entertainment during the pre-covid days on Timezone as both our children likes to play on this sort of thing.

With us being stranded at home, we have limited entertainment costs except for one part where we decide to rent a Wii console to play at home ($7/days) for a few days.

Weekend Outing


Weekend these days is spent on recharging and reading books plus our very own home based learning with the children.

We no longer go out during weekends so we don't have to spend on things which we usually did in the past.

I think we can definitely improve on this post-Covid and not spend too much given that we've found our niche of what we can do during weekend.

Final Thoughts


Total expenses have gone down by 77% during the Covid period mostly contributed by the deferment of both mortgages and taxes followed by the non spending category in the non-discretionary expenses like traveling and weekend outings.

Still, I am not expecting this to normalize after the Covid as I'm expecting the world to remain to normalcy in due times but there are definitely things that we can work on and improve from here now that we've tasted what it feels like being kept to a minimum.

How did your spending fares during the Circuit Breaker?

Thanks for reading.
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17 comments:

  1. how about insurance charges

    ReplyDelete
    Replies
    1. Hi

      You're right, it should be included as an accrue of about $300/month. We generally tend to pay it one lump sum for the family hospitalisation plan towards year end which probably why I forgotten to include it, thanks!

      Delete
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  2. B, didnt realise you have two ptty being rented out?
    i assume mortgage is for both ptty + the one you are currently living in?

    ReplyDelete
    Replies
    1. Hi FC

      Yeah both are rented out for the moment, was supposed to move in Jun but they decide to extend the lease to Oct because of the Covid so we will also move in Oct if that's the case.

      Delete
    2. if the rental yield can "cover" the mortgage, would this be a better solution?
      just thinking out loud

      Delete
    3. That's always the intention from the start but only good in theory difficult to practice in reality with many moving variables.

      Delete
  3. I think for all expenses there are different grades to the expense. It would be better that you identify what is essential and how much it cost and what are the more discretionary part. for example, food is not just the same for everyone. you can eat at hawker center, at home, or daily at din tai feng. so if you break down the family food into two pots, in times of need, you can cut the discretionary one by maybe 80%.

    ReplyDelete
    Replies
    1. Hi Kyith, it's actually already broken down into two pots. The Groceries categories referred to the ntuc and cooking at home type. The eating outside expenses are included under the weekends outing category, which we don't do during Covid.

      Delete
  4. B
    If you rent out both properties, where do you stay? Are you still renting and living in your rented unit? That must be hard as you need to move back to your own home eventually. Moving is never easy.

    ReplyDelete
    Replies
    1. Hi

      We're currently crashing at our parents place at the moment, was scheduled to move to our new place by Jun but because of Covid, it will be postponed to Oct, which just nice the tenant also requested for extension because of Covid situation.

      Delete
    2. Thanks. A monthly mortgage of over SGD9k does seem rather hefty, and puts a dampener on FIRE. Would it make sense to reduce the principal ASAP? Note that you had taken a mortgage loan on the first property to help buy the second property.

      Delete
    3. Hi

      No intention to do that in the near term nor do we have the capability to do that either.

      Delete
  5. I think mortgages should not be used as expenses especially if one of them is giving rental returns.
    In anycase, your expenses is really low especially household transport. For the rest because you only two young kids and no need for parent support or other friends or relatives' comittments! I always have many committments. Birthdays, weddings, housewarmings.....

    ReplyDelete
    Replies
    1. Hi Rolf

      Yeah I can understand all the "events" must have taken up a lot of expenses for the family. Apart from birthday, I don't think we did anything much. Even for birthday, it'll be at most an extra birthday cake we still try to eat at home as much as we can.

      Delete
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