Hello friends! It’s me – Joanne/jojo_baaa, Gudeiary’s new co-writer. I’m so grateful for Karen to welcome me here and am thrilled to be sharing with you guys any random musings along the way.
So far, 2020 has definitely got me reflecting more on my own financial habits. With so much uncertainty in the world, and so many families struggling to make ends meet, I think there is just no better time to start improving on our own saving habits. After all.. personal finance is part and parcel of adulting and in less than 2 months I’m going to turn 29, soon-to-be 30 year old ladyyyyy.
So, here are 5 simple saving habits that I’ve started practicing that you can start today:
1. Track your expenses
Have you ever had one of those moments where you look at your bank account balance at the end of the month and wondered where did all that money go ?
You probably tried to recall your activities for the month, with bits and pieces everywhere :“Oh ya I attended 3 birthday parties this month”, “Work has been so stressful, i remember treating myself to Starbucks every morning before work”
Awareness is key in managing your personal finance. How could you begin to save effectively when you don’t even know what you are spending on?
Tracking your expenses allows you to monitor your daily purchasing habits and reflect on the spending categories you have now in your life. If you feel it takes up too much effort to record your expenses after every purchase, I suggest setting a time daily to do it, eg. 9pm every night so you can review your day. You may miss some along the way but hey, something is better than nothing!
You could use apps such as Money Lover, Money Manager, Money Coach (lol the names are literally stating the obvious). Though personally, I love using Money Lover!
It comes with pretty visual reports and customisable sub categories so you can organise your expenses as you deem fit. You could even view your expenses across any timeframe within a day, week, month or year. So, it really allows you to see where is the bulk of your money going to and if you would like to make changes along the way.
2. Immediately transfer a portion of your salary to your savings fund
Another good habit is to immediately transfer a specified portion of your salary OUT of your bank account. Out sight, out of mind! This habit adopts a save-first-then-spend approach as compared to save-what-you-have-left approach.
You could always set a target of how much you would like to save monthly, i think 10-20% of your monthly income is a good start, and you can work your way up. Each of us have different sets of commitments so you do you! Either ways, set aside that target you have set for yourself and that amount becomes absolutely OFF LIMITS.
I typically transfer my saving pool to a Fixed Deposit / Stashaway Simple/ My brokerage account. I think Fixed Deposit is a good starting point because once it’s locked in, you cant lift the deposit without forgoing the interest rate, so it builds that discipline for a new habit cause then you would really ask yourself “Do I reallyyy need to dig into my savings for this dress?”
Both you and I will get up to RM30k managed for free for 6 months 😀
3. Set up a play fund
All work and no play makes Jill a dull girl! Setting up healthy saving habits doesn’t mean letting go of all that luxuries or treat-yo-self days. We all work hard for our money, so we all deserve to treat ourselves after a hard day of work. I think the key message here is spending within means and in moderation.
So a good way to tackle this is setting aside a play fund, maybe about a % of your income, depending on how much other fixed expenses that you have eg. a mortgage or rent, transportation etc. And because you have a fixed amount each month, you have to make choices as to whether this splurge is really worth it.
I especially love this quote I heard from Oprah Winfrey “You can have it all, just not all at once”. Yes you can have that dress, yes you can go for a staycation, yes you can have that Starbucks coffee, but maybe not all at once. Unless your play fund can accommodate so, then hello guilt free shopping!
Most of my play fund is usually spent on skincare (many thanks to Gudeiary’s reviews and the eye catching packaging of K-beauty – nothing like receiving new skincare in the mail ahhhh) and nights out with my friends. And because I want to continue to do so, I am more than happy to let go of that nice pair of shoes. You’ve just gotta choose what matters to you most. Remember, what you don’t spend, is what you save.
4. Wait at least 3 days before buying something
Disclaimer: This does not mean waiting 3 days to buy a dishwash. If it’s a neccesity by all means please buy asap!
By something, I mean our ‘WANTS’. Something we dont need, but would LOVE to have. With so many sales going on, 9.9, 10.10, 11.11, it feels like we are in a world that is just encouraging us to buy, buy and buy. You literally cannot click on a product, without the ad stalking you across your other social media platforms (Google I know you can hear me).
So, think of this 3 day rule as a way to stop giving into our impulse. Yes, you can buy it if you have the budget for it but just wait for 3 days, see if you are as excited about it as you were before. More often that not, it’s actually the novelty, the thought of getting something new, that endorphins of clicking ‘BUY’ that makes us so addicted to purchasing something.
What I usually do is, I click ‘Add to Wishlist’ or ‘Add to Cart’, without actually completing the purchase. I get the same rush as clicking ‘Buy now’ but then I leave it there for 3 days and come back later on. If I’m just not feeling it anymore, I either remove it from my cart or I leave it there waiting for a big sale.
PRO TIP: Buy only during sales. There’s a monthly big sale anyways, why pay full price when you can get free shipping or a discount for the exact same product. You just got to wait.
5. Use a good cash-back credit card
Okay, I know it seems counterintuitive to get a credit card when you are trying to save but honestly, credit cards are just a tool. It’s not inherently evil. It’s how we use it that’s important. Provided you are doing points #1-4 well, you have established that you have good financial habits, then it’s time to introduce a good cash-back credit card to get more bang for your buck.
Here are some ground rules though:
- Use it to buy only what you would have bought anyways with a debit card/cash
- Pay your credit card on time
- Always honour Rules no.1 & 2
A cash-back credit card is a card that gives you ‘cash discounts’ upon purchasing something. Eg. If there is a 5% cashback on dining means, everytime you pay at restaurant for a meal that cost RM100, you get RM5 back. That means the meal only cost you RM95!
I’ll let the pros explain further, so here’s a link to RinggitPlus’s Best Cashback Credit Cards in Malaysia:
There are loads of credit cards out there. Most give you points, so the more you spend, the more points you get. Often times, to redeem something good, you’ve got to be spending a LOT to hit those points. So, that’s why i prefer a cash-back card, cause cash is king. I’m currently using the Citibank Cashback Credit Card. Based on my spending patterns, I’m averaging about RM20-RM35, monthly.
(Disclaimer: This is not a recommendation call, just sharing what works for me now)
That wraps up the 5 simple saving habits in my life now. Are you practicing any of these? Let me know if you enjoy these types of blogposts 🙂
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Check out other articles within the ‘Lets Talk Money’ blog series.