A story about my: How did I notice I overestimated my financial ability
Currently, I am a senior university student at NTUST, Taiwan, and have had a part-time job in a Japanese restaurant since the day I was a freshman. One thing that I haven’t noticed from the beginning is that I don’t have anything saving at all within my bank account. Secondly, I still have a student loan that hasn’t been paid off yet, but I remained a mindset that I just need to work just “enough” to survive also keep buying dump stuff and hopefully my parents are going to help me. Apparently, because of the Covid breaking out both in Vietnam and Taiwan in May 2021, my parents couldn’t support me and I was laid off because the majority of the business was closed in both countries. The table was turned over.
After that, I stumbled a book names The Psychology of Money by Morgan Housal. One of the statement within the books describes exactly my current situation is that:
“We usually estimate others people’s projects will run between 25% and 50% over budget. But when it comes to their own projects, people estimate that renovations will be completed on time and at the budget”
With that being said, it brings on two questions:
1. Why is it so hard for me to spot my flaws?
2. Why do we keep hanging on to my old view?
Most of the answers would turn into my ego. I often prefer the ease of hanging on to old views over the difficulty of grappling with new ones, because my ego doesn’t want to admit that I was wrong. Instead of admitting I haven’t had enough money in my savings account, I kept buying dump stuff and I still had a positive mind that everything would be fine. Because it’s extremely uncomfortable to admit the opposite(the worst scenario). Therefore, for the sake of saving my ego, I decided not to take actions that fully exploit an accurate view of that future coming true. Eventually, my ego left me high and dry and it’s time for me to take a step back and reconsider savings.
“If you don’t break your ego, life will break it for you.”-Jay Shetty
Why should we save?
This world is up in the air because this world is too big and too many things to able fathomable. Then, people make imperfect decisions based on limited information all the time. Therefore, it’s impossible to anticipate what is going to happen.
The only certain thing is we have to plan when the plan is going according to the plan by saving. Bill Gates totally nailed it. When Microsoft started to grow, he wanted to have enough money in the bank to pay a year’s worth of payroll even if the company doesn’t have any income.
You don’t need to have a reason to save-buy a car, a house, a laptop, but you need room for error and when things are out of the blue.
Additionally, it also gives you a sense of mental safety so that you don’t have to worry about the external world. This is also one of my problems during sophomore year, I could fall asleep because I was on the knife edge of finding a job and place to live off-campus.One question I always ask myself when I am making any financial decision is “Does this help me sleep at night?”
Moreover, when you have savings, you have more flexibility than other people if any opportunity comes to you. You’ll have a better chance of learning new skills when it is necessary. You can take your time to find your passion and niche at your own pace relative to your competitors. Savings so that you can survive.
How to save money: A brutal fact about me
Honesty is the best policy. Even though I have financial difficulties, I am a shopaholic. I bought things when it wasn’t necessary, I bought things right off the bat when I got my paycheck. One reason that caused this problem is that I was comparing myself to others too much.
I want to prove to them that I am rich and financially capable. The more show off, the more I bought dump stuff.
The silver bullet to save money is to give a damn about how other people think about you. What’s the point of working hard and spending money to buy dump stuff just to prove to those haters or the people you don’t deeply know?
“Savings can be created by spending less. Desire less. Less care about what others think of you.” — Morgan Housel
Honestly, when we bought some fancy cars or watches, we barely only need the function of the product, we want the added value from those things. Exceptional identity. Admiration. Respect. Those is what really we want.
Nonetheless, I thought spending money and show off how much you earn is the metric of admiration and respect. But the inconvenient truth is all about humility and sitting below your ego.
This was proved when I met some of the rich people during the seminar at NTUST in 2020 such as Scott Chen-CEO of AI Research at NTUST, and Daniel Yeh-CEO of OTTO Musica. They are both incredibly talented and affluent. However, instead of bragging about their accomplishments, they’re extremely humble. I can sense a profound humility during the seminar and conversation by showing their openness and willingness to learn.
Savings is paramount in this uncertain world, the only to do it less caring about how people think about you. On top of that, living a humble life.
Thank you for reading, please comment which part of the article you got value from it !!!
