| Tips to improve personal finance |
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| Wednesday, 18 March 2009 07:49 |
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Stick to a budget A budget will help you determine where your money is going. You need a budget whether you earn RM 1,000 or RM 100 000 a month. Pay off credit card debt Credit card debt is very easy to chalk up and things soon get out control. It’s easy to forget that it’s real money we’re dealing with when we use credit cards to pay for purchases, large or small. Despite our good resolves to pay the balance off quickly, the reality is that balance off quickly, is that we often don’t, and end up paying far more the items after adding interest. Have a savings plan. Resolve to set aside a minimum of 5% to 10% of your salary for saving before you start paying your bills. It is even better to have money automatically deducted from your paycheque and deposited into a separated account. Invest! If you already have a retirement plan and a savings account and you can still manage to put some money into other investments such as property, then the entire better. Maximise your employment benefits Employment benefits such as healthcare are worth a lot of money. It is worth considering a lower paying job if it comes with healthcare benefits which would avoid the need for expensive insurance coverage. Review your insurance coverage. Policies may overlap. Check with your employer if you are adequately covered. If you are paying for extra coverage on another policy, then consider whether it is still necessary. On the other hand, it’s important that you have enough insurance to protect your dependents and your income in the event of death or disability. Keep good records If you don’t keep good records, then you probably do not claim all your allowable income tax deductions. Make sure you record every single deductible receipt that could save you money each time you file your income tax. Spend less than you earn It’s easy to go over budget – even by a few a few ringgit. But the cumulative effect over a few years is drastic. Going over budget every month means you have no savings and may go into credit which is not a good situation, especially in times of economic crises. If you can afford a proton perdana, then it is worth buying a proton waja. The difference can go into a savings account for contingencies. Look out for bargains There are lots of factory outlets where you can get perfectly good quality items for much less than their normal retail prices. There are also website where you can visit where warehouse sales are advertised. Check www.lelong.com.my for more information. Save on utility and phone bills. If you have a prepaid plan, you may want to consider cheaper post-paid ones. As long As you can control your talk time, many post-paid plans are cheaper than their prepaid counterparts. Not using a single air-conditioner can also save you up to RM80 per month in electricity charges. |