As a young working adult, managing your finances may seem daunting and even impossible at times.
It’s easy for people to blame this situation as simply a case of millennials having a lavish lifestyle or spending excessively.
However, the rising cost of living is among the challenges that could affect how you manage your personal finances.
While some factors may be out of your control, you can still determine how much you save and spend every month, and this could be crucial in helping you accomplish your financial goals.
First of all, you have to be honest with yourself every time you’re about to spend your hard-earned money; make sure you analyse whether you really need something or if you just want it.
For example, do you really need to drink that fancy coffee which costs RM12?
As you start your career, try to stretch your ringgit as far as you can. You don’t have to spend a small fortune to have fun so look for and take part in activities that require little to no money.
Remember, by spending less, you will have more to save and invest.
Speaking of savings, before you think of saving for that vacation you’ve always wanted, make sure you save for something more important first: an emergency fund.
This emergency fund, which you should save in the bank, should be at least six months’ worth of your monthly spending.
You never know what your financial situation will be next year or two years from now, but having an emergency fund in place will at least be of help to you when getting back on your feet again.
Worryingly, according to the Employees Provident Fund (EPF), 75 per cent of Malaysians find it difficult to save RM1,000 for emergency needs.
And if you’re now in your 20s, it may seem like forever before you reach retirement age.
However, it is never too early to consider planning for that time when your days of working are over.
EPF once again provides another sobering statistic as it estimates that 55-year-old retirees would need at least RM228,000 in their EPF savings to be able to withdraw RM950 a month, based on a life expectancy of 75 years.
The good news for millennials is that you still have a long time to save and invest for a comfortable retirement, and there are also a lot more resources now to learn about managing your own finances.
This is a weekly column by SarawakYES! – an initiative driven by Faradale Media-M Sdn Bhd and supported by Angkatan Zaman Mansang (AZAM) Sarawak – to provide advice and stories on the topics of education and careers to support Sarawakians seeking to achieve their dreams. Join us on Facebook, Twitter, Instagram and Youtube.
This article first appeared on The Borneo Post, visit this link: http://bit.ly/2xsvq6M
Image Source: Parade