● By Mel Sim
Even if your salary is low.
Now that you’ve started earning your own money, it’s time to have that serious talk: How to save money. Say what – it’s impossible because your salary is low?
Even the more reasons why you should start saving! Living pay cheque to pay cheque isn’t recommended because you never know when an emergency that requires money may happen (medical emergencies, accidents, car repairs, etc). What you should have is at least three months of salary saved up in your bank for a safety net if anything should happen.
How is that going to happen when you have hardly anything left after paying off debts, rent and what nots with your salary? Trust us, you can. Because say this after us – you need to start living within your means.
What this equates to is living a lifestyle that reflects your salary. A lot of people who just started working get into financial trouble because they don’t live within their means. Sure, it’s nice to go shopping often and it’s nice to buy whatever you like, especially now that you have money coming in every month. But what’s not nice is knowing that by month end, you are out of cash.
And then there is credit card that makes it easy to just wave and pay without really having to come up with the money first.
Here’s something interesting about credit cards: According to this survey, the average outstanding credit card debt a Malaysian owes is RM10,250. And only two out of five Malaysians who have a credit card settle it in full. If your balance is more than what your salary can keep up with, then you’re running up a debt, spending money you actually don’t have. And if you don’t do anything about it soon, you’d be looking at some serious financial troubles, maybe even bankruptcy – 0.29 percent of those who filed for bankruptcy in 2016 blame it on credit card debts. That’s essentially saying that they’ve spent way too much and have to declare being bankrupt because they can’t pay it off!
One problem is our attitude towards money. A survey on how financial savvy Malaysians are showed that as many as 59 percent of Malaysians do not have enough savings to last them for more than three months and that 34 percent spend equal to or more than their monthly salary.
Ready to start saving, regardless of your salary? Here are money mindset you need right now:
#1 Start saving now, even if your salary is low
Every little bit counts. If you earn RM2,000, aim to save 20 percent of what’s left after paying off your fixed monthly expenses like rent, transportation, bills. Even if that amounts to just RM300, it is better than having zero saved. Besides, RM300 now equals to RM3,000 10 months down the line.
#2 Stop thinking you’ll save when you earn more
Because newsflash, you won’t. Saving is a habit to inculcate right from the start, and not something you will pick up when the time is right. This survey clearly points out why this is a bad idea: 88 percent of Malaysians earning between RM2,000 to RM5,000 a month save less than RM1,000 monthly. 31 percent of Malaysians earning above RM10,000 save less than RM1,000 monthly!
#3 Take advantage of free money
Who’s giving out free money? A lot of companies actually. Like e-wallets. Paying with e-wallets entitles you to cashbacks and extra savings. Plus you earn points with your transactions, giving you even more free stuff like cash vouchers. Because the industry is so competitive now, everyone wants your business. Which means more saving power to you!
#4 Don’t spend like your friends
Just because your friend can afford it doesn’t mean you can or should spend the same way. Again, this goes back to our “spend within your means”. You don’t have to be shy about not being to afford something and your friends shouldn’t give you a hard time about it either. And remember this: There are a lot of people out there who are living outside their means but don’t talk about it or show it. So that friend who just bought a brand new designer bag? She might be creating even more credit card debt for herself. Just focus on yourself and be honest about what you can and cannot afford. With some money saved up, you may be able to give yourself a treat later!
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