Do You Save More When You Earn Less or More?

Credits to Peter Lim from $avvy Blog Corner.

Do You Save More When You Earn Less or More?

The above question is quite tricky right? Some of us may agreed to say that we can only save more when we earn more while on the other hand, some will say that it’s not how much you earn but rather how much you save that’s important. Personally I find the above statement half correct and half wrong. Let me share with you my opinion =)



Take for example two people, Mr A & Mr B, working in same company holding similar position but A getting $1800 salary and B is getting $2800 (All nett income). They live in HDB. Mr A. is a simple man with simple lifestyle. No dining out after work. Watch rented dvd at home on weekend and no branded things on him. Takes public transport even with his wife. On the other hand, Mr B is someone that dines in restaurant once a week, no branded also but will spend weekend chilling out with friends over movies or drinking session. And of course not forgeting he drives a Mazda 3. Looking at this situation, who do you think saves more money?


I believe that at this point of time the answer is obvious. It’s Mr A =) WHY???


Simple reason is because Mr A has lesser expenses than Mr B since he lives life simply and don’t care about social perception of him being so called ‘boring’ man.


In Singapore, if you are someone who stays home most of the time and wears the same clothing every year and never dines in restaurants, you will really be labelled as boring. And normally such people has lesser friends. I am not too sure but do you happen to have some friends like that and they seldom mix around with the rest right? If yes then I am right! Whereas Mr B is the type of friends that many people like to hang out with because more fun and interesting having him around. He will also be more popular among friends and at least there will be more people turning up for birthday party compared to one that Mr A holds =) However my point is not to discriminate any person here but rather trying to share with you that one can save a lot more just by being boring!


Just take the car for instance: Every month the Mr B will have to spend at least a minimum of $1.2-$1.5k on car expenses whereas Mr A will only need to spend $200-$400 if they take occassional cabs. With the amount of saving that Mr A gets, it is almost equivalent to the differences in their pay. So actually they are getting similar pay in the end. Plus all the chilling out sessions and restaurants & movies, all can add up quite a bit per month. Mr B normally finds difficulty saving up every month whereas Mr A will usually be able to save almost $500-$1000/mth. No wonder the people who can’t really buy insurance or got problem saving up belongs to Mr B type! Looks rich but actually quite empty sometimes.


Using this example, we learnt that it really doesn’t matter if you are earning lesser but more of how much you can save up is more important. However on the flip side, if you are able to maintain a low expenses while earning more money at the same time, it will be perfect! But again being very realistic, how many of us are able to do so? I dare to say that out of 10 people, only 2-3 can do it. The remaining are the type that once income goes up, their lifestyle will also goes up! So end of the day, not much changes.



In the end, it’s really the expenses that matter the most. Maintaining a neutral lifestyle is the best because you can get the best of both world. After all we can’t be too stingy to ourselves after working so hard at work. Decide what is more important to you: Whether life after retirement is important or life before retirement is more important and this will guide you to live your life accordingly.


So do you save more when you earn more or less? The answer only can be answered by you =)
Boring or Interesting person?


PS: It is possible to be an interesting guy with lots of saving too =)