✨Girl Math✨ and How It Affects Us

It is just a joke; people are having fun with it on TikTok and on X. Let’s not take it too seriously.

And indeed, no judgement will be passed onto anyone who has said the things that’s about to be quoted in this piece. Though quite frankly, everything said in relation to our cognitive bias when it comes to money just cuts deep because they’re often… true? I realised a bit of it today as I was finalising my expenses from last month. So much spent, with little explanation, dismissed with the simple famous term today – “girl math.”

And based on the top 5 videos I’ve watched when I look up this very hashtag, here we shall reflect a little on our mental accounting.

Paying with cash

“If I’m paying it with cash, it feels like I got it for free because it didn’t reduce my bank balance.”

Of course nobody actually means this when they say it (I hope). But then, how often do you keep track of the cash that you are spending? I’ll be honest, last month I just wrote down RM350 in my expenses as “cash withdrawal.” I’ve been racking my brain all day and still can’t tell you what that money was used for. It would have been valuable info because it would help me to budget my future expenses if that went into groceries, or how much I might be putting into unnecessary splurges. Once upon a time, people used to be more hesitant with spending their cash, because few shops accepted card payments, which made physical cash a valuable asset to hold on to. Plus, swiping cards feel so much nicer than dealing with clinking coins. Not to mention, credit cards allow you to pay a whole month later. Today, some people see paper in their wallets and act like they just took out money from ang paos instead of their own bank accounts.

Voucher tricks

“If I’m getting 10% off, then I’m saving 10%. Even though it’s making me spend more than I originally intended.”

Ah, the power of discounts and “minimum spending.” Using psychology in marketing has always been a useful tool to get people to buy stuff they possibly never wanted to buy in the first place. For example, you just wanted a piece of bread at RM3, but because there’s a “Buy 2 Free 1” offer, you take two more pieces. And then the perceived average cost becomes less, so you’ve just spent RM2 for that bread you wanted! When in fact, you just spent RM6, an extra RM3 for two more items you had not originally intended to purchase. I’m giving a small example, of course. I shall not shame anyone who wants to eat more bread. Now, the time it gets detrimental is when it happens frequently, and in large amounts. Like.. “spend RM1,000 and get RM100 off!” So all of a sudden, your RM500 vacuum purchase is now also coming along with a RM500 steam iron. Even though your iron at home is working perfectly fine. If this doesn’t apply to you, then you’re lucky. I myself have been on that side thinking that I’ve just saved RM50 for an item that in reality had cost me an additional RM400. It’s at least good to know that the steam iron gets taken out and used once in a while, even though everyone prefers the one we already had.

Free stuff

“I’m perfectly happy with my current plan, but if I upgrade it with a 2 year contract, I get a free phone!”

Similar to the earlier situation, I once changed a RM60 plan to RM150 for a free phone. And I kid you not, the phone was only worth RM1,500 at the time. Yet for some reason, it felt like a double benefit because I was getting so much more data! True enough, some people truly do benefit from all those GBs, but not me. My data consumption never changed but still, I spent an additional RM90 per month, amounting to RM2,160 for those two years. Which is a whole RM660 more than the phone would have originally cost. A significant amount that could have gone into savings instead. Which means that this opportunity cost had been incurred without me even realising.

One more thing that often gets dismissed is that we tend to let our phone plans run on longer than necessary. So, we end up paying more than necessary. I mean… I had forgotten when my contract was going to end so I ended up paying RM150 for two more months before going to the store and changing it back to a cheaper plan that matched my needs.  After all, paying for more data that nobody uses is just like buying more food that nobody eats.

Income via refunds

“I returned a bag and got my RM200 back. So that means I just made RM200.”

Much like the cash spending, we tend to dismiss the new expense that we had presumably already written off. Money that ended up being stagnant (no actual outflow or inflow) is now seen as extra money. Because after thinking that it had left our grasp, it somehow came back! The perception of having extra money could be good if it goes into savings, or if it is spent buying another version of the thing that we needed. Yet instead, when spent on other things as if it were pocket change, it becomes money lost. This tends to be the case for me when the refund comes late. Any more than 2 weeks late, then I would have spent additional money to buy the same item elsewhere. And then when the refund finally arrives, and I see that green plus sign on my account, it feels like a free lunch.

Long-lasting purchases

“Cost per wear is such a thing! If I use my RM1,000 bag for 3 years, it’s less than RM1 per day.”

We all have different opinions about luxury goods and how it contributes to our lives, but let’s zoom in on the singular basis that it will last us a long time. See, this cost-per-wear concept would be great, if our alternatives were things that disintegrate after a few days. Except, our alternatives that are much cheaper, could also last years on end. There are reputable brands out there that offer lifetime warranties for half the price. But what is RM0.50 a day compared to RM1 a day if you consider three whole years of usage? A lot, as it turns out, when they’re used for other things. I’m not much of a clothing or bag enthusiast, but I can relate when it comes to gadgets. I have definitely bought expensive watches by reducing the cost in my head through the number of days I’d be using it. Forgetting completely that there are other watches that would last just as long. It just takes a little bit of research (today with the help of a clean screen, a keyboard and a stable internet connection, what can’t we do) to find one that would reduce my expenses.

So we’re human, and we’re consumers. If you’ve made bad decisions, trust that you’re not alone. This writer is right there with you. In our world, it is almost impossible to prevent waste without a proper tracking system. This behaviour is then made worse with the inclination to justify every economic outcome with vague mathematics.

To understand our own spending habits, and to develop better control, it would help a whole lot to consistently track our expenses. If you’re not the physical bookkeeping type, there are a few apps that are free to download. If you’re still unclear how to sort it out, perhaps we can help in this area. <link to in-house article on how financial advisers help>

And who knows, in ten years, you’ll find yourself with so much more savings than you ever thought you could manage, simply by being more mindful today.