Quick and easy tips towards improving your personal finances.

There are also things that you can do to optimize your savings for retirement and your general financial position in the long run and also do consult a licensed financial planner.

 

#1. Curb your impulse buying

Impulse buying is something which most individuals struggle with, and after the introduction of social media, it has gotten worse. It isn’t difficult to know why. In attracting buyers to make fast decisions to purchase their goods, plenty of brands have employed advertisement agencies that do their jobs 24/7.

Email updates often motivate large numbers of individuals to make one-click transactions. It can be hard to manage this habit, but the rewards are long-lasting and fulfilling. Try removing such apps from your phone if you appear to spend irrationally on Facebook or Instagram. When you don’t allow advertisers too much access to you, you’ll be less tempted.

#2. Manage your interest

Interest is part of regular financial management, and it can be a devastating liability. Essentially, interest is the expense of using someone else’s assets. You pay interest when you borrow more money, as you do with a college loan or a credit card. When you lend money, such as opening a savings account in a new window, you gain interest.

With a maxed-out credit card or hefty student loans, it’s easy to pay hundreds of dollars per month in interest payments, so keep interest from working against you by avoiding debt wherever possible. Save cash. Consider using a quick interest calculator to help you understand the implications of adding on debt or saving money.

#3. Develop a stricter budget

If you want to achieve financial independence early, saving just 15 per cent of your income is just not sufficient. Experts recommend that at least 40 per cent to 60 per cent of your profits must be saved. The more you conserve, the quicker FIRE is achieved. Begin by producing a strict budget. Then, to save as often as possible, add thrifty living hacks. This may involve eating homemade rather than visiting cafes or saving transportation money. Get an older car, you will have no choice but to use it. Or ditch the car altogether and walk.

#4. Shop online anonymously

When it comes to managing your personal finances in Malaysia, you probably already know how to use sites to find great deals, sources to get cash back, and platforms to add coupons to your orders automatically. But here’s a quick savings trick that will often save you cash while shopping online — which people often forget: shopping via incognito windows. Sometimes, online retailers base the rates you see on your cache and history, so you can give them less to go on to ensure you see the best price.

#5. Put savings away first, not last

Pay yourself first! The error of waiting till the end of the month to worry about saving is made by a lot of people. They move their leftover funds into a savings account at that point. The thing is, you’ve got about thirty days to make all those little mistakes that add up in terms of your expenses. Whatever your target is (5 %, 10%, 20%), set that aside straight away. If you have to, set up automated transfers from your checking account to a savings account.

#6. Track your spending

One of the most essential financial skills is monitoring your expenses. It’s also one that surprisingly few individuals have a good grasp on. The best way to get a straightforward financial outlook of where your money has gone is to map out precisely where, when, and how much you use. It also lets you decide whether every dollar is being used to its maximum ability. With a pen and paper, a document, or an expense tracking app, track your spending.

#7. Try the 20-30-50 budget ratio

In the following order, the budgeting ratio plays out like this; 20 per cent should be saved immediately (goals or retirement) or placed towards debt payment. The limit that you spent on housing should be 30 per cent. 50% needs to be spent on something else.

You should plan to put at least RM1,000 into your savings accounts, emergency fund, or your loans if your take-home pay is RM5,000 a month, pay no more than RM1,500 a month in rent or even a mortgage, and pay no more than RM2,500 for anything else. This ratio is important because it provides you with a safe and realistic savings and housing goal.

 

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What other ways have you used to successfully take charge of your personal finances?