Assalamualaikum & Hi,
I've been wanting to post this for a long time but only got the call now hehe. Well, I'm not the right person to give you advices on this but, here's just my experiences, with the guide of my family & friends. I'm not a hardcore saver, but also not a big spender, I'm just an average girl who just want to play it safe.
Disclaimer: just an advice, different people have different commitments, so take the good advices & leave the bad ones hehe. What works for me might not work well for others.
1. Save at least 3 months of your salary
First & foremost, keep a portion of your salary for savings, to build minimum 3 months of your salaries. You can start it at any pace you want. Advisable is 20% but it depends on your commitments because everyone have different responsibilities, just start first. It's ok if it's 5% or 10%, this is a marathon not a sprint. In the end you just need to reach your destination; which is to build your savings. Over time, you can increase your savings gradually from 3 to 6 months or more depending on your capabilities.
2. Open Tabung Haji & ASB account (or fixed deposit account)
While you're doing number 1, you can actually open these two accounts & keep the cash you saved here. The reason is because, the dividend they paid is quite higher than only saving in the bank account. Also, it's a low risk investment. If you're non bumi, you can opt for fixed deposit account. Same like number 1, you can slowly spare some cash in these accounts. The more you save, the higher the dividend payout will be. You can open Tabung Haji account at their branches & ASB online at myASNB website or apps.
3. Plan & be disciplined in your spending
The rule of spending is to use whatever left from your salary after you minus savings & commitment. If you don't practice this, even if you earn RM20k per month, you will never feel it's enough for you. Never spend more than you earn, & never spend before you save. & after few months you do this, consistently, we can move to number 4.
4. Get a credit card & know how to use it wisely
You can only come to this one only if you complete number 1-3, especially number 3.
This one is the most interesting part. Back in my early twenties, I was paranoid when people said to take credit card because my thoughts are credit card=huge debt. Yes it is, if you use it wrongly. & no it's not, when you use it the right way.
The story of how I decided to get a credit card was because of Husna. First, we got into arguments because I said to her, I don't want to be in debt because of credit card. Then Husna said, why would you be in debt if you pay on time? & I was like err ok. After that, when we went to Japan, we had to pay for the hotel, Husna used her credit card without us having to bring a lot of cash & she's like, 'see, told you it's useful". So when we came back, I took one.
The main reason why I took credit card is because during emergencies, you will use that without having to disturb your savings. Previously when I had emergencies, I will take my savings so it keeps decreasing & I have difficulties to topup it back. With credit card, you can avoid using your savings, but with one condition you must must pay it back on time with your next salary.
Another advantage is, you can buy things with 0% monthly installment like handphones, furnitures & more. It's better than having to take a lot of cash which you can use to put in number 2 & get the dividend instead. An advice, don't take so many monthly installments at once. Take it one by one or set some certain limit of monthly payment you can pay. & again, spend within your means & please please pay on time.
Third one is some credit cards give cashbacks & points. Like the one I'm using, if you go to groceries or fill at petrol stations on some days, you will get 5% cashback. It might not be a lot, but who want to give you cash for free?
Fourth one, you can monitor your spending online. Nowadays we have banking apps right? You can track your spending there. If we use cash, we might not know where we spend it, or we have to jot it down somewhere. For credit card, you can track it online. Just make sure you pay it back on time.
Last one is, it's good for your profile. When you have credit card, use it wisely, pay it beautifully, the bank will see it. So when one day, you wanted to make loan for your house or car, the bank has the proof that you're a committed person because they will see your payment pattern.
So far, that's what I can remember, if I have more, I will add again.
& again & again, don't overspend & please pay on time. Credit card is something that will benefit you if you use it correctly & will haunt you if you use it wrongly.
5. Venture into other types of investments (low to high risks)
Once you're done with all that, you can go for other types investments like gold, unit trust, ASB financing, cryptocurrencies, robo-investment & more. We'll save that story for other days.
Do go for lower risk investments first before going into the high risk ones. & read a lot before you make a decision. But please do number 1 first before going into these.
Many people skipped to number 5 first & when the market is down, they don't have cash to reserve. I'm still learning on this part but you can read it a lot at https://ringgitohringgit.com/ or financialfaiz on Instagram as there's many things we can learn there.
6. Pay income tax & zakat
This one is very important but some people might overlook. For income tax, I don't have much experience but I know many companies will deduct it for you, then you can claim for it from LHDN later on. While for zakat, it's very important because it's number 3 in the five pillars of Islam. You can do it online these days, just go to their website & select the type of zakat you want to pay. Mostly is about 2.5% from what you have, but do check any Lembaga Zakat website to calculate. Same like income tax, what you paid for zakat also can be claimed too through LHDN (this one need save for later too, I don't know much yet).
7. Share with your loved ones.
When I first started my career, I wanted to give some money to my parents on monthly basis; but my mom refused to take it. Then my dad said, "just take it, no matter how much, even if it's small, because it's not for us, it's for her to get blesssings from us."
One thing that will make you happy is when you can treat your family & friends. To see the smile on their face when you bring them to nice place to eat or bought something you really want, are priceless.
You can always earn money, but your family might not always be around. So when they're still here, go appreciate them.
Sharing blessings with others are the best things. It's not how much, even if you just treat your parents for breakfast, the thoughts that you share what you have with others are important.
8. Make donations
Another type of investment than is important is sedekah or donate your money; because it's not only for dunia but for akhirah/afterlife.
It depends how much & where you want to donate, because the amount is not important but your sincerity.
9. Live your life too
Last but not least, save a portion for you to go for adventures, gain experiences or spend on your hobbies. Maybe around 10-20% depends, because you have work so so hard, you deserve to be rewarded by yourself too.
Time waits for no man, there are things you should do now instead of later. Keep it balance, because if we saved too hard, we will lose the experience we should get especially in younger days when we are still healthy & have time, & if we spend too much, we will surely be doomed.
Extra advice: Learn to cook
These days having a lot of life skills will definitely saved many of your living cost. For me one thing I've found very helpful is when you cook your meals.
Thanks to my father who always share with me the price of groceries & how much you can save if you cook instead of eating out, I started to cook too back in my uni days.
Eating out cost you a lot more than when you cook. But when you can cook, you can adjust your spendings by making your own meals on your rainy days. & when you have your own family, cooking really helps in managing your finances. One of the examples is my father once said to me, you can cook big portion mee goreng for 10 people with total price of RM10 instead of buying it for RM3 per pack.
That's all for now. This is just a sharing, our experiences might be different from each other. I hope it helps even in smallest way.
It's okay if you just started, or made some financial mistakes before this, it's never late to correct it, just do it at your own pace.
The key is to just start first. Each one of us have our own style of manage things, you'll discover yours too, all the best.
Till then,
Adlina.
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