HOW MUCH SHOULD YOU SAVE FOR YOURSELF?

Golden rule of thumb for savings is 6 months of your salary, that is if you are working on salary-based.

Why 6 months? If you are getting laid off by your employer, you can survive at least for the next 6 months without any desperate moves. For a self-employed person, he or she should have more savings preferably between 9 months to 1 year.


HOW TO SAVE?

1. Set aside 10% of your pay cheque as savings. Not just your salary, but any other income you receive eg rental income, sales of shares, income from part-time jobs. If you can save more, you will be better off as your cushion is thicker.


2. Always pay yourself first. Pay your bankers later.



3. Spend below your means. Eg if your earn RM4000 a month, do not spend more than RM4000 a month. This includes your cash payment, your credit card payment.



4. Cut down your spendings.



5. Save where you cannnot reach for your money and cannot use them when you have an impulse buying need

I have written on Golden Goose sometimes very much earlier.



How many Golden Geese do you have?



WAYS TO CUT DOWN YOUR SPENDING

1. Always have a shopping list when you shop for your monthly or weekly grocery supply. Do not buy, what is not in your list. If you feel that item is important, put it in the list for the next visit to the local store. Chances are you will soon forget about the item and it is not required to be purchased after all.



2. Be calculative on your spending. If you like to have coffee break, be mindful of where you are going for your cup of coffee. One place may cost you double or triple from another.



3. When buying a big item eg a washing machine, survey a few shops before you finally purchase it. One shop may give you large discount while the other may add free gifts alongside.



4. Always switch off your electrical appliances when they are unused. Buy energy saving bulbs or electrical appliance



5. Do not use airconditioning



6. Do not use water-heater

WHAT DO YOU HAVE TO DO NOW?

1. Always increase your financial knowledge. Invest in yourself


2. Find a high return avenues to get a better return on investments


3. Change your habits to a cost-conscious one


4. Increase your income. Create passive income avenues.


5. Do not waste


6. Be an informed investor


7. Do not create debts on your credit card