Finances are an integral part of your life. Simple daily decisions such as choosing to have a designer coffee or a cup from the Mamak will have an impact on your finances. These small decisions are especially important now that we have been badly affected by the Covid-19 pandemic; businesses are closing, people are losing jobs and we are facing uncertainties every day. How can we make better financial decisions?
1. Start Learning Financial Matters
You would be doing yourself a huge favour by learning the right knowledge on financial matters. Websites like AKPK, majalahlabur.com and ringgitohringgit.com provide great resources on financial know-how. If you are more a visual learner, watch Money Matters on TV3 every Saturday at 6.00 pm to learn from financial experts. You can also tune in to the BFM radio talk show called “Ringgit and Sense” which airs every Thursday at 9.30 am.
2. Keep A Budget and Track Your Spending
Some important habits to start are keeping a budget and tracking your expenses. Nowadays, you have an abundance of applications available at your fingertips. To name a few, we have ‘Money Lover’, MAE app, and Big Pay app. These apps allow you to set both personal and household budgets, track your spending habits and some even have cash rewards for you.
3. Commit to Saving Habit
To cultivate a saving habit, you need to set financial goals. Having a minimum saving of 3–6-month worth of expenses should be your basic target. Using an application such as ‘My Tabung’ and MAE app will help you to achieve your target. Another way is to auto deduct a specific amount from your account every month. It is advisable to allocate 20% of your monthly salary for this purpose.
4. Get to Know Your Good Debts & Pay Off Bad Debts
Identify how many good and bad debts you own. You can get your credit report from CTOS. Document them properly and find out how you can pay off your bad debts fast. Don’t be afraid to consult creditors or Agensi Kaunselling dan Pengurusan Kredit(AKPK) for repayment assistance. Check out this article by CompareHero.my for debt management tips and you may try these apps; Debt Payoff Planner or IOU for debt tracking and repayment scheduling.
5. Grow Your Income by Investing
There are many ways that you can choose to grow your money. Take this quiz to see which type of investment suits you best. Whether it is stock, fixed deposit or property investments, you must learn how to calculate your risks. You may learn to make calculated risk decisions with this Starter-Kit by the Securities Commission. We recommend you check out these YouTube channels too: iherng, FIRL guys and Mr Money TV.
The ultimate goal for a financially literate individual is to enjoy financial freedom – that is when your financial state is secured and flexible enough for you to live your life at ease, even during a pandemic crisis. Get on with one of these steps and you are already one step closer to your goal.
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Iman Shukri, Asmuni Ali, Aina Nurin Muhamad Nasruddin, Janna MohdZaki