My husband came home one day and told me that his company had not paid him. His salary had been delayed for 2 weeks. It was not the first time. They had been affected by COVID-19. 

I was 36 weeks pregnant. 

We had decent salaries but we were living paycheck to paycheck. 

Our home mortgage had always been paid for by our CPF contributions. Every month we have a huge buffer so we had also built up a safety net in the CPF and our home was definitely safe. 

We also had been trying to learn budgeting for a while. We had some safety rails in place. 

Overnight, I knew we had to do something. If you know me, I work extremely well under pressure. The adrenaline kicked me into hyperfocus problem-solving mode.

That night, after we put our first kid to sleep, we concluded that we needed to cut our spending to fit into one salary – mine. With number 2 on the way, we would very quickly put ourselves in debt if we did not manage it well. 

Cutting expenses

The excel sheets came out and we axed everything we didn’t need immediately. I recall not sleeping well that night and my husband felt so bad that we were in this situation. 

Among the top on the list to go was ordering food on Grab, ride hailing and online shopping. We activated the automatic premium loans of our whole life insurance plans and cancelled extra plans that we didn’t actually need. One of those that got the axe was a hospitalisation cash policy. In hindsight now, I realise how short sighted it was of us to get that in the first place. Oh well, that’s a story for another day. 

We bought fewer things for number 2 and reused whatever we could. To some of our less understanding friends and family, we appeared very miserly and stingy but I knew our intentions were pure and genuine. I had to reduce some postnatal services and thankfully they were very understanding of my situation. We also didn’t have a very fancy party for my then 2 year old (it was his birthday). 

At the same time, my husband was the first person (I know! I cannot believe it) in his small (around 10) company to seek legal help for his salary. We also found out that they had not been paying CPF contributions on time. Thankfully through legal recourse, he got his salary in due time. They back paid his CPF contributions. Right after he got his salary, of course, he submitted his letter of resignation. 

We were banking on our year-end bonuses to pay for the birth of number 2. We were really hanging by a thread now that I think about it. We were paying for private gynae at that time and we didn’t want to settle for subsidised care because the baby’s placenta was near the cervix and required a caesarean delivery. At the check-in, we opted for a single room (the audacity!) because the 2-bedders were near construction and would be noisy. I prayed that we would be okay but really it was quite a risky move. 

We paid for our down payment of about $8k with our credit cards – adding even more risk to the mix. But we just didn’t have extra cash. It was really not a good feeling going into the caesarean delivery room that way. 

Thankfully the birth went smoothly and we were discharged. We opted for the quick check out service. Even though we did not have to settle the bill immediately as it would be sent to us within 2 weeks, I recall the uneasy feeling that we might soon be faced with a hefty bill to pay.

In Asian culture, we also celebrate the 30th day of a baby’s birth to signify the baby and mother’s successful first month. We delayed it to the popular 100th-day celebration and drastically reduced the magnitude. Unlike our first, there was no huge family gathering, no buffet, no custom design cake and no lavish gifts. I even had to turn down a request by a colleague who gave birth 5 days after me to throw a party at work. We just couldn’t afford it. 

A turning point

My husband got a new job in his dream industry. He had to take a pay cut but the fact that we drastically reduced our budget allowed him to do that and he was very happy. 

Right around the time he got his first paycheck, we started to wonder why the hospital bill hadn’t arrived. 

It was about 2 weeks later that I got a call from the hospital to tell me that they had to REFUND my deposit and they were SORRY for the delay and for taking so long. 

They apologised so profusely that I was utterly confused. It turns out that the low placement of the placenta was a condition that was covered by my hospital insurance! The cost of the hospitalisation fees was fully covered. For the first time, I felt I had made ONE right financial decision. 

My husband was right next to me when I received that call and I recall so clearly the huge relief off our shoulders. The refund hit the credit cards and we breathed a huge sigh of relief. We were saved by my hospital insurance plan and we now had a fresh start. 

This whole experience started our journey into financial freedom. During my maternity leave, I started seriously reading up on budgeting and learnt everything I could on personal finance. I spent every nap learning and reading and watching. It was a huge learning curve. I faced pushback from family members who said I was money minded and that I couldn’t possibly budget to the last cent. I was also appalled at how little I knew and how difficult everything felt. What I learnt made me question EVERYTHING I believed about money. 

Which loaf of bread do I buy? Should I get a new pair of shoes? Envy apples? Can I afford them? I doubted every single decision we made. 

I learnt as many budgeting tips as I could from different websites. I downloaded spreadsheets and physical budgeting plans. I drew up a budget plan and tried to figure out if we could budget seamlessly as a family. I tried everything. 

Whatever we saved up, we paid towards our automatic premium loans. The last one was paid off in 2023 as I had forgotten about it. All these while, I am thankful that we did not have to have to turn to personal loans and credit cards. 

The biggest challenge in budgeting as a couple was figuring how much we had spent for groceries and other living expenses. It was logistically impossible to track our combined spending. As a result, some months we would still over spend. It felt impossible to save. 

It didn’t really click until I found YNAB. My husband and I watched video tutorials and I attended their daily free live classes during my maternity leave. I taught him whatever I knew. They covered topics like using credit cards responsibly, having a budget routine and how to set up YNAB. After a free trial, we took the plunge and signed up for it. Paying $100 seemed hefty but the increase in net worth is well worth it. We still use it to this day. 

4 years later…

It would be another 4 years before we started gaining traction. In these 4 years, the hardest challenge was changing our spending habits and money mindset. Money was used to buy things to make us feel good. We were used to such an inflated lifestyle that every change felt like bootstrapping. We realised that a lot of our families’ habits were unsustainable. Weekly restaurant trips, $400 birthday meals (almost every other month), expensive cakes, regular professional haircuts, spas, facials and taxi rides (on top of owning a car), branded handbags as gifts and makeup were just not realistic. I recall very clearly how we would drive to Orchard to buy a loaf of bread. A $6 loaf of sourdough would turn into an entire outing with parking fees, dinner cost and a lot of other expenditure. We faced a lot of pushback, resistance and disbelief from our family members. A few didn’t understand what we were doing and we were misunderstood for not showing filial piety. 

Learning and growing

I also soaked up as much information as I could by reading personal finance books and listening to podcasts on my trips to work. One of my first finance books is You are a Badass at Making Money. I devoured it in a day. I learnt to read terms and conditions of bank accounts and understand banking terms, how to choose products that work for us. Compound interest began to make sense. It would be a while later before I started really making full use of it. We didn’t start making use of credit cards until 3 years later and we did so with ultra carefulness and responsibility. 

In the midst of it all, we were raising two children and we were trying to give them our best. Some financial decisions were harder to undo without upheaving their lives like choice of childcare, car ownership and family help. Those we decided to keep and stuck by them. 

As I am writing this, we will be turning a corner soon with kid 1 going to primary school. We are pretty relieved at the reduction in childcare costs but also cautiously aware that we may need to pay for tuition and more enrichment classes. 

Looking back, I am appalled at how it took us 4 more years to eventually get our act together. We are definitely blessed with some level of privilege – good health, good paying jobs, healthy family members. And yet the learning curve was steep for us. Looking back, two things held us back. A lack of community and a lack of healthy money mindset. 

I really don’t wish for anyone to be in our position. It is my goal to be so good at money that my kids will benefit from it. 

This is why financial literacy matters. Because it took me so long, if I can somehow be an advocate, a beacon of light to someone else like me who did not grow up with the privilege of gaining financial literacy in their childhood and if it somehow benefits their children, then together we are paving the way for future generations to come.