As this January 2019 comes to an end, and you start spending on your preparations for the awaited Chinese New Year (if you have not done it already), it is also important to remember to your budget and (re)evaluate your financial goals for the year.
Also, if you are one of those who had resolved to be more tight-fisted with your expenses this year, but were unable to stick to your goal, fret not! It is still early enough to get back on track. Like the English saying, it’s better late than never!
From a financial perspective, here are 4 saving targets to achieve by the end of 2019:
1. Have enough money for emergency and retirement
According to a report by Bank Negara Malaysia (BNM), 75% Malaysians are unable to fork out even RM1,000 for emergencies. If you belong to this group, be sure you make 2019 as the year when things change.
There are three major areas that you should allocate your money to – for emergencies, for retirement, and for your major personal spending, such as holidays. The first two are the more important ones. You will need to increase your source of income and/or monthly savings, if you are unable to put aside money.
Ideally, an emergency fund should have at least 3-6 months of your average expenses preferably parked in a separate savings account so that it remains accessible at any given time. This is to safeguard your sustenance if any unanticipated event (such as unemployment, delayed salary, or loss in business) happens in the future.
As a rule of thumb, based on your income, you should re-consider your budget and the amount of your fund allocations towards personal spending and use it wisely for your emergency and retirement savings, on a yearly basis.
2. Lower your costs of transportation
You can only get more funds for your savings with two methods – increasing your income and reducing your expenses. Transportation cost is one area where you could save.
Let’s face it, the traffic in the Klang Valley is horrendous. Getting stuck for long hours on the road translates to high fuel costs and the condition gets worse when you consider how much you have to pay for tolls and parking. Taking public transport might be the solution to this.
Beginning January 1, Malaysian commuters get to enjoy a 30-day unlimited Rapid bus and rail pass. The new travel scheme will be executed through the Touch n’ Go function that is available on MyKad and MyTentera identification cards. The 30-day unlimited pass is available in two versions:
- The RM100 pass – can be used on all Rapid Rail services, including LRT, MRT, Monorail, the Sunway BRT service as well as all Rapid buses, including the MRT feeder buses.
- The RM50 pass – applies only for unlimited travel on all Rapid bus services in the Klang Valley.
If you’re still not convinced to take public transport, these 20 Intelligent Tips to Help You Cut Back on Vehicle Running Costs could be useful to you!
3. Avoid unnecessary spends
Here’s a saying that you may already know: ‘If you buy what you don’t need, you steal from yourself.’ In other words, unnecessary spending equals less money for savings. Here are just a few spending traps that will sound familiar to many:
- Subscribing to a cable connection when you barely watch TV
- Buying expensive fashion accessories or clothes
- Indulging in the latest and hi-tech gadgets
- Pay expensive gym memberships
- Investing in expensive furniture when you don’t own a home
- Buying a coffee or eating out every day
Although, in isolation, these activities seem harmless or even when you do them in moderation. However, these small things can eventually lead to the bigger picture. Unless you
You don’t have to note down each of your spends in a little black diary anymore, keeping track of your spending is made easier by simply installing and using a budgeting app on your phone!
4. Take steps to become debt-free
“The best way to save is by getting rid of debt,” says Greg Hammer, a financial advisor with Hammer Financial. Furthermore, he advised to recognize what’s happening with your finances— if your debt level is going up, declining, or remained unchanged from the start of the year? He suggested to make amendments in your spending habit accordingly.
If you would like to take a leaf out of his notebook, take some time to read our blog 5 Useful Tips to Become Debt-Free, a detailed guide on how you should go about building your counter-debt strategy.