Through bumpy roads and stormy seas, these 7 basic things are important to save for in your financial journey!

Whether you are just coming out of school or looking after your parents and children, going back to basics is important. Your financial journey is unique but has many similar goals to everyone.

As you journey, many things will crop up. And they might distract you from your most important financial goals and objectives. Hence, taking a step back is important to get back to basics.

Taking a good grasp on your financials is key. Saving is the first step towards this. This article will detail to you 7 basic things that you need to save for in your financial journey.

#1: Home-ownership

A roof over your head will shelter you in times of need. And it will enable you to rest up, go out and do all the necessary things to support yourself and your family.

This is the first thing that you save for if you are starting on your financial journey. Home-ownership across Malaysia is increasingly out of reach for many due to rising housing prices. Furthermore, Malaysian salaries have not kept up with property prices.

Hence, you need to start saving up for a home right now. A house in Malaysia costs about RM350,000 at the median. And you need at least 10% or RM35,000 to pay for the down payment.

This could be the first financial objective to save for.

#2: Car / Transportation

Some have argued whether a car or motorbike is still important. After all, public transportation is increasingly available and accessible. However, this is only true in the major cities in Malaysia.

Many who reside outside major cities find personal transportation necessary to move around and find work. Having transportation could even make the difference between being able to land and maintain a RM5,000 job instead of a RM2,500 job.

As housing gets more expensive closer to places which have higher employment prospects, saving for a car or motorbike becomes even more important if you can only afford to live further out.

For those just starting, saving for a motorbike might be more economical. They cost about RM5,000 to RM8,000. If you have a higher paying job, you can opt for cars which cost from RM30,000 to RM150,000.

#3: Children’s Education Fund

In today’s world, if you don’t have at least a degree, it will be hard to get a decent income with a steady job. And that standard is getting higher with more graduates also getting their Masters.

Give your child an opportunity to have a better future (and better future income) by preparing for their education costs.

Saving to invest in education funds is your best step forward in this situation. There are a myriad of options that you can choose from. The most famous one is the National Education Savings Scheme or also known in Bahasa Malaysia as SSPN-i.

Not just tertiary education but you can consider your children’s options for primary and secondary schooling too. The government’s national education system is much cheaper but some view it as basic and lacking in some areas. The private/international education system is much more expensive but allows you some freedom in being selective.

Be aware of your options and and measure out the pros and cons while you determine how much you can put aside for your kids.

retirement sunset couple

#4: Retirement

Retirement – is the one important thing on everyone’s minds after they think about their financial goals. In Malaysia currently, only about 4% can afford to retire. Yikes!

And the cost of living is increasing. You would need to think about what you need to pay for when you retire to afford living.

According to data from the Department of Statistics Malaysia, these are the top expenditures by Malaysians aged 65 and above, a month.

  1. Housing, Water, Electricity, Gas And Other Fuels: RM1,219 per month
  2. Food and Beverage: RM759 per month
  3. Restaurants and Accommodations: RM598 per month
  4. Transport: RM452 per month
  5. Health: RM179 per month

Start thinking about contributing more to EPF or a private retirement fund to secure your retirement.

#5: Insurance

Oh boy, don’t leave home without securing your insurance policies. You never know what could happen to you. While many think that insurance is a form of expense, it is more accurately visualized as a ‘savings’ product.

After all, you are saving for the insurance company to pay out for any unforeseen circumstances or damages to your assets. If you don’t have any accidents at the end, you can get back some of your savings from them.

Here are the insurances that you need to save up for:

  1. Life
  2. Medical
  3. Disability
  4. Car
  5. Housing (Fire)

#6: Vacation Fund

Don’t underestimate the importance of vacations.

They could be the difference between a healthy and a chaotic relationship with your family members. Firstly, a vacation for yourself is important to unwind and de-stress from the stresses of every day. Secondly, a vacation for you and your family can strengthen your bonds and relationships.

Ideally, both you and your spouse will contribute to this fund. And only with the authorization of both of you, these funds can be used for vacation purposes.

#7: Emergency Fund

You never know what will happen. While insurance will cover you, it doesn’t cover everything. Saving for an emergency fund helps you to account for unexpected things.

As it is for emergency purposes, you should save these funds in a savings account that you can get a daily interest rate on. It should not have any restrictions for withdrawing cash on short notice.

That way, you can still get some profits on your savings, and use the funds to deal with unforeseen circumstances.

Conclusion

Get back to basics of what to save for in your financial journey. There will be many bumps along the road but these 7 things should always be central to your saving priorities.

Keep them close to your heart and you will be able to weather any financial uncertainties in the future!

 

Let us know in the comments below about your saving goals!

You May Also Like