Are you placing your personal Finance in the right track?

The survey of Federation of Malaysian Consumer Associations (FOMCA) showed that 30 to 40 percent of Malaysians do not have sufficient savings for emergency situations and retirement (Malaysian Digest, Almost Half Of Malaysians Have Zero Savings, Are You One Of Them?, 12th January 2017). More than 50% of Malaysians between 18 to 55 years old do not financially ready for retirement (The Sun, A study on 1,000 Malaysian found more than 50% not financially ready for retirement, 28th November 2017). A total of 294,000 Malaysians are involved in bankruptcy cases due to their failure to settle hire purchase loans, credit card loans, personal loans, housing loans and social guarantor debts (due to errant debtors). According to the Department of Insolvency's statistics, 70 per cent of bankruptcy cases involved individuals between the age of 35 and 45, and around 8,000 to 20,000 individuals were declared bankrupt for numerous reasons in a year (Malaymail, Bankruptcy cases involve 294,000 Malaysians a year, says minister, 14th September 2018). 

Are you always honest with your personal finance? Are you on the healthy financial status? Money seems like a discussion taboo. It is so much attributed to our egotistic, and self-esteem. If, you fail to plan, you plan to fail. If you fail to manage your money, your money manages you to fail. Do not let your money take control on you. Otherwise, you will be burdened with tonnes of debt.

Here are some methods, which you can implement honestly to yourself.

1. Find a piece of paper, or prepare to write note in somewhere as follows:

a. Your current debts, your commitments whether it is known or unexpected (credit card, loans, car service, daily expenses, petrol expenses, toll expenses, parking expenses,  future trip, etc) for the next 6 months. Write the total amount.

b. Figure out your total earnings for the next 6 month.

c. Minus total expenses with total earnings to determine its balance. If, the figure is positive,  congratulations to you! If, it is so unfavorable, break it down to how much you can afford to pay within each month (For 6 months).

If you are unable to allocate 20% to 30% of your monthly earning except EPF contribute for savings, you will get into hardship during emergency, credit card (interest around 7.88%p.a to 15% p.a), and personal loans (interest around 5.99% p.a to 18%p.a) might be the alternatives to fund your emergency. Eventually, you will end up accumulating more and high interest loans.




We cannot run away from debts. The longer you defer in repaying loans, the greater the interest will be. At the end, you have to extend your retirement age.

I experienced this as well. What I had done.

1. Cut down expenses
2. Find a way to earn more (side-incomes)

Financial management won't make you an overnight millionaire, "Rome wasn't built in one day",  but it will grant you a peace of mind and debts controllable status.

Be honest to yourself will let you make quick decision such as:
1) Can you afford the new commitment?
2) Can you afford that fancy dinner at fancy restaurant?

If you need a healthy lifestyle and healthy cash flow that you need tomorrow. It is advisable to start your savings and investment, today.

Formula of Savings = [23% (EPF Contribution) + 10% (Emergency) + 10% (Specific Purposes)] X Monthly Gross Income (Before Deduction of EPF)