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We all know the importance of saving up; whether it be for a rainy day, for your eventual retirement, for a holiday, for something you truly covet, or just for the comfort of knowing that you have money in the bank. However, saving up is no easy feat when you don’t feel like you have any money to spare. Saving up and investing is easy enough when you have spare cash, but what if you don’t?
Don’t despair, there are still steps you can take to improve your financial situation, and while you may not be able to save or invest immediately, there are ways for you to eventually get there. With the new year coming up, now is as good a time as any to set the plan in motion for a more financially stable year!
Here's how.
Track it
The all-important question is – where does it all go? For you to make changes, you need to first understand where you’re going wrong. Are you spending on unnecessary items or activities? Could you cut down on spending on these things or activities? Where does the bulk of your income go?
Make a point of meticulously recording each and every thing you spend on, no matter how small or insignificant it may seem, even your daily teh tarik and nasi lemak bungkus. Do this for at least a couple of months and you should see a pattern emerging.
Understand it
Now that you have it all laid out in front of you, you should have a very clear picture of what you can start to eliminate from your spending. Do you spend too much on eating out? Shopping? Maybe even on small miscellaneous items which didn’t seem like such a big deal? Well here’s the thing, even if you only spend RM10 a day, that’s RM300 a month. And realistically, you’re not just spending RM10 daily.
Divide your spending up into categories so you can be more methodical in your slashing efforts. For starters, they can be divided up into necessities such as bills and food, monthly entertainment, general expenses and so on. Once clearly categorised, you’ll be able to see which areas can be cut down or even cut out completely. And just because something appears in your list of necessities, it does not mean that you can’t cut down on it. For example, if your electricity bill is astronomical, make sure that you are more diligent in turning off the lights, or switching off the fans when not in use. And try not using the aircond as often. The same applies to grocery bills. Yes, of course you need to eat but could you do without those pricey imported chocolates and snacks? The answer to that would probably be a ‘yes’! And do you need to use that food delivery service as often as you do? Nope.
Plan it
Now that the picture is crystal clear, start budgeting on what can be adjusted.
First, write down the non-negotiable ones. And be honest with yourself, don’t kid yourself into thinking that your streaming service is a necessity, or getting food delivered 20 times a month is absolutely crucial. Non-negotiable in this case would be expenses that are fixed, such as your housing and car loans. These should be followed by your monthly bills, food, transport and other such necessities. Then, and only then, would you be able to factor in your ‘wants’.
While you need to slash what isn’t necessary, you would still need to be realistic. Setting unrealistic goals is just setting yourself up for failure. For example, instead of telling yourself not to ever eat out again, maybe just go out once or twice a month. This would be quite significant if you’re used to doing it once a week. The point is for you to see how much money you could save by doing what you do.
Shop around
You can also save on some money by finding more economical alternatives. For example, is another mobile service provider offering cheaper plans? Is there another company having good promotions on home fibre internet? Could you start working out with friends instead of with a personal trainer? Maybe you could start washing your car yourself. These are just a few examples of some things that you would probably never give a second thought to, but you should.
Prioritise
While the idea is to save money, you should be saving up to clear your debt first. Credit card debt for example can snowball and cost you a lot more than you think, so make sure to clear your credit bill as much as you can every month, if not clear it completely.
Once you have cleared your debt, then you can start saving up properly for an emergency fund or a ‘for fun’ fund.
Diversify
Extra income never hurt anyone so consider getting another income source, if that’s a feasible option. Figure out where your talents or interests may lie and monetise it. This will help you with clearing your debt, and reaching your goal of having savings even faster. And should anything happen, you won’t have all your eggs in one basket.
Seek help
If you’re struggling, there is help available.
The Credit Counselling and Debt Management Agency, commonly known as Agensi Kaunseling dan Pengurusan Kredit (AKPK), is an agency of Bank Negara Malaysia set up to help individuals take control of their financial situation and gain peace of mind that comes from the wise use of credit. The services provided by AKPK are run by certified financial advisors with many years of experience under their belt, which includes free credit counselling services – their counsellors will help create a personalised debt repayment in consultation with your banks.
If you’re looking for easy ways to save money, then the Tabung function in MAE by Maybank2u may be just what you need. All you need to do is to set up your Tabung based on what you’d like to save up for, the goal amount and the duration to reach your goal. The amount will then be deducted automatically from your account every month without you having to give it a second thought.
There’s also the Maybank Financial Goals Simulator which allows you to run simulations on your goals to see what it would take to reach them, gives you portfolio recommendations customised based on your risk profile and goal targets, and you can set-up the auto-debit feature and let it run itself.
Nothing is Impossible
Even if your current situation is not ideal, know that it is always possible to better your financial position. All it takes is some planning, discipline, and determination. Why not kick off the new year with some financial resolutions? It’s a challenge that will definitely pay off (pun intended!).
