We often notice the cumulative effect of saving a few dollars here and there are completely dwarfed by huge savings in big-ticket purchases like education, housing, car, vacation… So we ask

Q: saving a dollar here and there, calculating … is it worth it?
A: yes over the long run
A: yes if it is a consistent habit

Q (more relevant): saving $200/month on accommo, is it worth it?
A: yes over the long run.

Q: saving $400 on a family reunion trip … is it worth it?
A: yes as a consistent habit. 5 trips could save $2k.

Also remember my financial freedom hinges on burn rate (control). That freedom means low-stress for life!

Case study: Kenny Zhu once suggested “why don’t you just buy the Chinese version of richDadPoorDad and give to your parents. Don’t worry if they would read it. If you don’t buy they won’t read. It’s only $10”. That was pretty careless spending. Indeed my parents had no interest in the book.  This is not an isolated example but a sign of a habit. People with this habit waste not just $10 like in this case, but thousands in a year!

Case study: Junli told me he had to work on the lawn. The professionals can save you the time and effort but cost you $2k, so why not? Well, this is not just one isolated incidence. There are many other things you can DIY and save many thousands.

Some argue that it’s more important to save on the bigger ticket items. I agree it’s more important. The small savings are a different habit.

• Smart buyer of big tickets items may or may not be a saver on small items.
• Over-spender on big ticket items is unlikely a saver on small items.

I am a firm believer of burn rate, which could (intensify or) reduce the burden and psychological stress. A carefully controlled burn rate makes me nimble so I could take on more opportunities.

Remember the question from financial planners — how much would you need during retirement? Once you establish your lifestyle (spending pattern) you are unlikely to change it after you retire.

I think my live-alone burn rate (ex-housing) is below $1k either in U.S. or Singapore. A typical burn rate for a peer is perhaps $2k to $4k depending on his/her income. If I save additional $2k/m, over 10 years I would have 240k more in the bank. I would feel the difference when I buy a home.