2018: 8 Financial Tips For You

8 Tips for 2018

First post of 2018. Hello readers and welcome back hahah. Thanks for bearing with me for the past 6 months without updates (sorry about that). I promise I’ll come up with more interesting content this year, heheh…

Was thinking long and hard about the kind of content I plan to put up for this year & maybe include some video content too. Let me know if you’d be down for that. ­čÖé

Anyway…let’s start with first things first. A strong foundation for your financials this 2018 after the major CNY holidays, why not? Let’s begin…

1) List Down Your Income & Expenses

By far the #1 step in the world of financial management. Everything revolves around income and expenses, money in & money out or whatever terms you decide to assign to this concept. Think about it, the concept of income and expenses applies to everything you know.

How do businesses survive? By ensuring income generated is greater than expenses. Why are you working for a company as an employee? Because the money it takes to pay your salary is a fraction of the profit you make for the company making it profitable to hire you (hopefully lah, kurangkan mengular & mengeteh during office hours ok?)

Anyway, you need to do the same for yourself. Treat yourself like a business. List your income and every expense you currently spend on every month. Are you surprised at what you see?

2) Calculate Your Disposable Income

Formula for this is “Income – Expenses = Disposable Income”. Basically, the amount of money that you can spend for whatever you want. If the number is zero, good luck working for the rest of your life lol. Hopefully it is a positive number.

Of course, best case would be to spend on investments to generate future income. Alternatively, this can be treated as a sin fund (so they call it). What sin, you ask? I have no idea…ask yourself.

3) Identify Wants vs Needs

Ahh…everyone wants the good life, but not everyone will get the good life. Sure, you want everything a millionaire has but if you are not one then it will only remain as a want.

Rather, you should know what you need instead. What are the things you can live with or live without? Do you really need that latest iPhone X if your iPhone 5s still works? Or that car upgrade you’ve been eyeing for after just buying your new Myvi a year ago?

4) Differentiate Fixed vs Variable Expenses

You should definitely take note of Fixed vs Variable expenses. What can or cannot be reduced? For example, you could probably reduce your spending on brunches at Birch. But you can’t reduce your parking fees every month at your workplace (fixed rate) or LRT ticket fares (try asking Najib for a discount lah, see whether can or not haha…)

Another good example of a fixed expense would be a house or car loan. These should be among the first fixed expenses you identify because it involves bank loans! And we all know these are not something to play around with.

5) Reduce Unnecessary Expenses

This is pretty much tied to point #3 above. Once you know your wants, find a way to minimise or reduce them if possible. Why pay RM 15 for a Starbucks latte when you can get a teh tarik at the mamak for RM 1.50? And it probably tastes better to your tastebuds and wallet…

6) Increase Your Income

Stop complaining you don’t earn enough. Sorry for being harsh, but this is reality. Nobody gives a damn. Get off your lazy ass and seek opportunities to help people, and the money will come to you. With the internet, there is so much opportunity anyway.

Just a few things you could try:

  • Be a Grab/Uber driver
  • Be a part time unit trust/insurance/property agent
  • Sign up to be a freelancer on Upwork or Fiverr
  • Buy cheap stuff on Carousell and resell on Mudah
  • And the list goes on and on…

7) Develop Your Cash Flowchart

This is something I recently developed for myself. Knowing your cash flow is good, but knowing how your cash flows is even better. Imagine a flow chart which begins with your salary coming in, and ending the chart with different end points mirroring where your money goes.

Think of it like a tree, with many branches representing the different paths of cash “flow”. I’ll share more on this one day…

8) Automate Your Savings

Standing Instructions are your best friend. So are auto deductions for your EPF, takaful/insurance policies, ASB & other investment schemes. Remember point #7? Now imagine it on auto-pilot.

Currently that’s what I practice and hope you start considering the same. ­čÖé

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