If you are in the process of settling down with your own family in Malaysia, it’s highly recommended that you begin paving the way towards your financial freedom early on. The earlier you start planning and managing your finances, the faster you will reach your financial goals. This is is even more important given the fact that the cost of living in the country is on an upswing. Furthermore, latest data from the Department of Statistics show that the mean monthly household income in the country is RM 6,141. If you are raising a family with kids, this amount is barely enough to cover all expenses with something left for savings.
It’s not enough to simply save an amount or a percentage of whatever you or your spouse are earning. You have to go beyond that. You should also be willing to take risks. To help you out in managing and growing your finances, here are some practical tips you can follow:
- Create a comprehensive financial plan and have it printed out for easy reference. The best way to start in creating this plan is to list down all the things you want to achieve within a specific period of time. For example, where do you want to see yourself after 5, 10, or 20 years? What age do you plan to retire? Are you thinking of starting a business? These are just a few of the things you can think about. After making the list, you then start creating a roadmap on how you can achieve the goals. It might be necessary to get the services of a professional financial planner to ensure that your roadmap is achievable.
- List down all of your daily expenses then find ways on how to either cut or control them. Create a record book of all your expenses. At the end of the month, collate the records to see which expenses need to be cut or reduced. If food expenses are taking too much of your budget, then maybe it’s time to start packing lunches to work. If your transportation expenses are ballooning, maybe it’s time to bike to work. Each type of expense requires a different saving method so be creative.
- Since you’re still young, you should only get insurance policies that you really need. A lot of young families avail themselves of too many insurance policies that end up draining their finances. You can avoid falling into this trap by setting your priorities right. Since you have a fairly young family, the most important insurance policies you need are health insurance for the entire family and educational insurance for the kids.
- Take a house loan if you’re planning to get a brand new home. Buying a house in cold cash can cause too much pressure for your new family. Getting a house loan is the perfect solution since it basically gives you a lot of time to pay for the property. Finding a loan with reasonable terms isn’t that hard since several banks in Malaysia offer house loans for low income families. For a start, you should check out the property loans being offered by the OCBC Bank.
- Always set aside an amount from your income for investment purposes. Investing your money is one of the quickest ways to accumulate wealth. You can invest it in real estate properties, in business ventures, or in stocks. For example, you can set aside 5% to 10% of your income for a real estate fund which you will then invest in real estate properties for rent like apartments and condominiums.
- Open a saving account in a reputable bank. The general rule is that you should put 20% of your monthly net income into a savings account. If this rate is too high, you can reduce it to 15% or 10% or even 5% depending on your current financial situation. What’s important is that something is going to your savings. You should try the savings plans being offered by the OCBC Bank.
One of the keys to financial independence is perseverance. You need to stick to your financial roadmap and implement it to the smallest detail. To ensure that you are always on track, you should make it a point to review your plans at least twice a year and update them if you see any flaws.