Everyone’s caught up with how to make money. But what about how to manage it?
You’ve heard the adage “A dollar saved is a dollar earned”. Here’s the thing, it’s not that simple. Personal finances isn’t all about spending as little as possible. It’s about putting it in the right place.
These are the things they don’t teach you in college.
Get one credit card. ONLY ONE!
Hold one a minute. Wouldn’t that encourage spending money I don’t have?
Nope. We’re not endorsing the habit of spending now and paying later. The practicality of having a credit card is actually to obtain a credit score. It’s basically a statement that says hey this person is capable of paying his/her dues. Banks look at your score when you ever want to take a loan someday.
And you will, when you want to buy property. Having a good credit score increases your likelihood of getting your loans approved, speeds up that process, and even allows more credit to be available to you.
So don’t wait until the day you decide to buy a house to start having a credit history. All you have to do is get one credit card that suits your needs and consistently pay your debt on time.
Start putting money aside for retirement.
You just graduated. You got your first job. You transition to a life of gruelling hours. Of course, you want to spend your hard-earned money on nice things.
We say it’s even nicer to retire comfortably.
Yes, you should think about your retirement even when you’re just in your 20s. Sure, you already have your EPF. But is that enough? According to Universiti Utara Malaysia Deputy Vice-Chancellor (Research and Innovation) Prof Dr Noor Azizi Ismail, it is not.
That’s why you should set aside a part of your salary for your retirement. The sooner you start, the more returns you will get. Thanks to compound interest.
To illustrate: if you add RM100 a month to a 3% Fixed Deposit, you’ll have RM93,195.96 in 40 years.
So supplement your EPF contributions with a separate bank account or consider opting for the government-approved Private Retirement Scheme (PRS).
Your older self will thank you for it.
It will seem strange having to pay for something and not get anything tangible in return.
What you do get is worth far more than you put in: a safety net. If you’re not insured, all it takes is one traffic accident to put you into serious financial trouble.
You can be careful all your life, but you could run into things that are outside your control. What can control, however, is how you prepare for it.
Not convinced? This will explain.
If money is tight, making some tiny lifestyle adjustments can afford you Manulife ManuProtect from just RM5 per month! It’s a smarter place to put your money.
It’s great that you have the next 12 months of your life planned. Don’t forget about the next 12 years.