We work to enjoy the fruits of our labor. Whether it is that monthly shopping or yearly vacation or even that sports car purchase, you can only accomplish all these if you have the money to splurge.
These are attainable but there are bumps that can derail your financial goals and dreams. To protect yourself against these, you need to be financially savvy and you don’t need much to begin with.
These five tips will help you hack your lifestyle to ensure you keep living the life you have always wanted:
1. Save an affordable amount every month
According to the Employees Provident Fund, one in three Malaysians do not have a savings account.
While the rising cost of living is not illusionary, you can still take charge of your finances by setting aside a decent amount every month. The trick is to get it automatically deducted from your bank account.
For example, if you put a down payment of RM1,000 for a unit trust fund with a yearly return rate of 10%, and then a monthly contribution of RM500, you stand to earn RM236,000 from interest alone, with the overall total being RM350,377.
That amount is enough to fund your child through a local private college or university.
2. Get a protection plan
Even if you are in good shape, medical problems do not discriminate and a life-threatening disease can hit just about anyone.
Your best bet, especially if you are working to pay off that mortgage or save for your child’s education, is to get an adequate protection plan such as Takaful.
Takaful is a type of Islamic insurance where members contribute money into a pooling system to guarantee each other against loss or damage.
These plans ensure the lifestyle or wellbeing of the dependents are not affected should something happen to the certificate holder.
3. Keep track of your investments
Even if you opt for mutual funds where someone else is doing all the tinkering for you, the onus is on you to ensure that your portfolio is constantly delivering based on your goals.
When you set aside money for investments, there will always be risks involved. To help weather this, you need to allocate your assets properly and this is where goal-setting comes into play.
If you are in yours 30s with retirement or financial freedom as your goal, then opt for a moderately aggressive portfolio. Often referred to as a balanced portfolio, this option serves those with a longer time horizon, generally more than five years.
4. Be disciplined
Investing is a long-term game, a marathon not a sprint. Sometimes you could lose track of your investments or even be demotivated or distracted.
To stay motivated, reward yourself. One way is to pay yourself a certain amount. While this may seem counterintuitive, the idea is to keep you in the game for the long term.
How to go about this is simple: set aside money for savings and personal spending. Do this before you set out to buy groceries or even pay the bills.
5. Think far, like really far
The problem with consumers is that many look for quick payoffs. But that would most probably lead you to debt.
According to Asian Institute of Finance, many professionals between 20 and 33 live beyond their means. The majority live on credit with 47% living on high-interest-rate credit cards, while 70% who own credit cards tend to pay the minimum monthly payment with 45% failing to meet the payment deadline.
One way to avoid falling into this frightening statistic is to simply spend and live within your means. If possible, delay consumption now for rewards later.
How do you get started?
The i-Great Mega by Great Eastern Takaful is a flexible savings scheme which offers a coverage starting at RM500,000 and loyalty benefits of up to 40%.
Here’s how it works: suppose you’re 35 years old and decide to save under the i-Great Mega, 20 pay plan that provides a coverage of 30 years.
You allocate RM300 a month and choose the Dana i-Majmuk fund which invests in Shariah-compliant equities, and suitable for achieving medium to long-term capital appreciation.
Here’s what you will receive:
What’s more, you get a tax relief of up to RM6,000 a year throughout the plan’s 30-year coverage and should anything unforeseen happen to you, the wellbeing and lifestyle of your dependents are not affected.
To know more about i-Great Mega by Great Eastern Takaful, visit this page and make an appointment with a Takaful Advisor to work out the perfect plan for you and your family.