My boss is based overseas. He will come to my office a few times a month. Usually customers will come over to meet us when my boss is in town. Occasionally, we would meet at the customer’s office. We would go in my car.

My car was given to me by my father. My guess the car’s more than 20 years old. Old but still reliable. It doesn’t consume alot of fuel. Maintenance is cheap too.

There was one time shortly after I had received my bonus, my boss asked, “So, when are you getting a new car?” He must have been uncomfortable not being able to stretch his legs inside my car. “I’d get a house first,” I answered.

For many people, the first long term financial commitment is either buying a car or a house. Which should you buy first? It’s a matter of needs. Some jobs require the person to have his own transport.

Generally, you will be better off financially buying a house first. Here are some reasons why.

1. A house save you rent, or earn you rental income.
You could save on rent by staying in your own house. You could also rent out the house or rooms for money.

2. The interest on the car loan is much more expensive compared to a mortgage. The interest is calculated a different way and the interest doesn’t go down even after making years of repayment.

3. Generally the value of a house appreciates over time, while the value of a car depreciates over time.

Today, I changed my auto engine oil and oil filter. I usually change these at my father’s friend’s auto service workshop. His fee is about 20% lower than the market rate. I’ve been using his service for about 3 years now.

This is the first time I drove to his workshop after the 41% price increase in gasoline announced 3 months ago. His workshop is quite a distance and there are a couple of traffic lights along the way. At one of the lights, I had to queue for 10 minutes before getting through the light.

The long distance and time spent on traveling prompted me to think if I should start changing oil at a nearer workshop.

What do not have to always follow what we have done in the past. And we should always re-evaluate our options from time to time. The best choices in the past may not be the best choices now because of the non-stop changes in you life cycle, economy, financial status, technological advances and environment.

People generally incur mobile network expense. I generate mobile network income.

I use a prepaid mobile network service. Therefore, I do not have any monthly fixed charges. My prepaid credit is deducted if and only if I make calls or send text messages. Sometimes, I am given up to 30% bonus credits when I top up my credit balance.

This network service also allows me to transfer credits in my account to another account within the same network. I sell my credits to anybody who wants to buy from me. I figure I sell more than I buy. Example, I buy RM100 and I am credited with RM130 including the bonus credits. I sell RM130. I end up making a profit of RM30 less some transaction costs.

I know I will not be able to pull this off anymore in the future when I find myself a girlfriend. Meanwhile, I should enjoy this while it lasts.

In this world of rising inflation, it is refreshing to see that costs of mobile network have been decreasing over the years due to intense competition among the different network service providers.

Beginning last week, mobile phone users can switch from one network service provider to another network service provider without needing to change the mobile number. This service is known as Mobile Number Portability (MNP). Users will no longer need to worry about losing contacts when switching networks.

I took this opportunity to evaluate my current mobile package. And not surprisingly, my current network provider has come up with a new cheaper package in its effort to retain its subscribers and rein in subscribers from other networks. I updated my package to this new package. Though I am not a heavy mobile user, this will still save me some spare change.

The Government announces the general inflation rate every month, usually between 2% to 5%. Taking this cue, my employer raises my salary by 5% a year. This is so we can keep up with the general inflation. However, I feel poorer and poorer every year. Do you feel the same? Here are some reasons why.

Personal inflation rate (aka Higher commitments)
Your personal inflation rate may not be the same as the general inflation rate. While the general inflation rate is 5% each year, your inflation rate could be higher as you go through different stages of your life.

For example, a working couple earns a combined income of $3,000. Out of this, $1,500 is used for paying necessities, $1,000 for savings and $500 for discretionary spending such as entertainment.

One year later, their employers raise their salaries by 5%, thus making their combined income at $3,150. Now they also have a newborn. The need to buy baby supplies, higher medical bills and the need to rent a bigger space have resulted in them spending $2,000 in necessities. They continue to save $1,000 but are left with only $150 for discretionary spending.

Because the couple feels that their discretionary money or “extra money” has shrunk, so they feel their incomes do not keep pace with the inflation. But it is actually their personal inflation that is causing them to feel this way.

We experience this when we move through different stages of life such as moving out, dating, marriage, starting a family, buying a home, kids starting school and colleges among others.

Higher standard of living
As we adopt a higher living standard, so will our expenses increase. Upgrading from a 2-bedroom to a 3-bedroom usually means higher monthly mortgage repayments. Some switch from coffee at McDonalds to coffee at Starbucks for your caffeine fix. Some install cable TV. All these will add on to our monthly expenses “committed” expenses.

Inflation rate differs from region to region
Historically, inflation rate in the urban areas is higher than rural areas. This is because more people migrate and live in the urban areas, resulting in higher demand for housing, transportation, food, goods and services. The higher demand urban areas causes prices to increase faster than the rural areas where the demand is lower.

Outdated methodology in computing inflation
Inflation is calculated by comparing the current prices versus last year’s prices of the items in the inflation basket. However, the items in the inflation basket may not reflect the expenses of the general public. People in the urban areas spend differently compared with rural areas.

In keeping the official reported inflation figure as low as possible, the Government could be motivated to use outdated methodology in computing inflation, or simply include only the basic necessities into the inflation basket. Items such as cars, computers, childcare and tuition are deemed “luxuries” and not included in the basket even though these expenses could form a bigger portion of our budget.

In my opinion, the best way to track your inflation rate is to look at how much and on what you spend last year. Compare that to how much and what you spend on this year. Then you would have a good estimate on your inflation that is coming from a change in lifestyle and the general inflation.