Here Are 3 Simple Steps To Start Saving 20% Of Your Income

CFD trading offers a sensible method to manage your hard earned money. This benefits you in leveraging your bets and with them within your fullest potential. A relatively small market movement can produce major changes with your portfolio. But usually there are some things you‘ll want to understand so as in order to manage your account correctly. Minimum Deposit : Money lying within the account doesn‘t bear interest. The simplest way to use you money during this case is to stay as less money with your CFD trading account as you can. The very best way usually is to move funds electronically When you‘re trading within your account. This manner you will get the very best of both worlds, the interest from the checking account along with the leverage from CFDs. To do that, you should have a CFD account provider that permits zero balance inside the account. Understand Withdrawal Procedures : Similarly capital gains should be moved towards the account where they bear interest. Please ensure that there aren‘t any charges for creating withdrawals as you‘ll lose valuable interest if you‘re stuck using the money with your CFD account. Understand Your Risk Appetite : CFD accounts are highly leveraged and therefore provide facilities based on the customers risk appetite. There‘s a feature which provides guaranteed execution from the order at the marketplace price which were entered straight into the computer. This service is with a premium because it risked your downside. However there‘s a standard service where transaction costs are much lower. It‘s inside an investor's best interest to comprehend these options and also to pick what he / she wants. Many investors have lost lots of hard-earned money towards the simple ignorance of those facilities. Understand the Bid Offer spread : CFD trading is really a type of derivatives contract. Such trading generally happens from the market and requires the investor to part having a bid-offer spread. Alternatively some big market makers permit the customers to position their order at the marketplace price with no spread. This causes it to be identical to trading upon the exchange albeit having a leverage. Features : A lot of these trading platforms allow advanced features for research, which Isn‘t open to the retail buyer. The buyer can understand the liquidity on each side of the positioning prior to making a little. This is usually a very good indicator from the loss valueable that could happen just in case of a fast sale. The higher the liquidity, the lower the risk. Security : Although it isn‘t advisable to keep your funds inside the trading account, though it‘s nonetheless safe. Most of those accounts are held in possession of the trust, which makes sure the money is safe and provides risk mitigating mechanisms equivalent to, otherwise better than the marketplace itself. CFD trading benefits you leverage your positions at rock-bottom transaction costs. The well-known investor Warren Buffet is likewise famous for their apprehension of transaction costs. CFDs help solve a little bit of the matter, by lowering them otherwise eliminating them completely. CFD Trading is a different way of trading that offers investors a good deal of leverage and flexibility. It provides you a chance to make huge profits a lot sooner. Dealing in CFD is taken into account safer than normal share dealing because it provides you the liberty to position your trades anytime and close your position when you would like. Even after such a lot of flexibility and leverage, the majority of folks see it too risky to put money into CFDs. CFDs are a good source in order to make quick money by putting extremely less efforts. Still, most novice players suffer from losses when trading in CFDs because of the insufficient proper knowledge and patience. Even the knowledgeable players sometimes bear huge losses as they simply fail to create a right decision. This really is where CFD trading strategy comes into play. In an effort to maximize your profits and minimize your losses, you desire to make effective strategies. Here are a few points that ought to be kept on your mind while dealing in CFDs : Lack of information and proper understanding is that the biggest obstacle. Investors got to attain a good knowledge of the topic before actually jumping in it. The marketplace is extremely volatile ; and also to succeed, it requires thorough basic understanding of the topic along with current market trends. It‘s recommended to take a position a small amount if you‘re a beginner. Before investing an enormous sum, you ought to convey more practical knowledge. Tracking your performance and profit-loss ratio from time for them to time is a great idea. It benefits you know if you are able to invest an enormous amount or otherwise. Along with it, it benefits you analyze your trading style, mindset, and capcapacity to take risk. Understand the tricks from the trade and research the marketplace thoroughly to play till long. Pairs trading is said to become a tried and trusted approach to CFD trading because it involves low risk and high-probability gains. You are able to sell the older stock and purchase a brand new one for future, simultaneously. This provides you an opportunity to adjust your risk. It‘s far better to trade more that certain financial instrument. Different financial instruments assist you adjust your risk of meeting losses. Deal in CFDs only if you re able to spend a good deal of time as these are generally not ideal for buy and forget situations. You need to deal in them everyday. Keep an eye upon the current market trends. It isn‘t advisable to purchase a financial instrument at sky-high prices. It might result into huge losses when market crashes down. if you are a risk-averter, you are able to choose CFD day trading to guard yourself from overnight risk of stocks. Making decisions could be very critical at each stage. Do not make hasty decisions because it may land you inside a bigger trouble. You‘ll lose all of your money. Think, research, and analyze, after which have a move. Buying and selling CFD could seem very simple and straightforward. It‘s recommended to not jump in it immediately. Review your finances and analyze if you can bear the loss in case you face any. As said earlier, one needs to attain a strong basic knowledge of the topic and become very cautious simultaneously.


On a daily basis we hear from our readers and users about how they need to get more loans because their income is insufficient for them to survive after repaying all their existing debts. It is also not unheard of for Malaysians who are just clueless as to what happened to their salary by the second week of the month.

These stories, though heart-wrenching, can be frustrating to hear.

Our millennials survey last year found that the biggest concern most Malaysians have when it comes to their finances is the high cost of living. But if I may be brutally honest, I believe the biggest problem we have is the lack of financial planning.

I mean, sure, cost of living has skyrocketed and income is trying to catch up, albeit in snail-pace. But I the disparity between income and cost of living is not that great that it is impossible to survive.

Perhaps, we should do some self-reflection and look at our finances to figure out how we can cut and trim to match our current cost of living. We can’t have it all – buying our first home and shopping every weekend, something’s got to give.

So, how do you do it? What can you sacrifice and what do you spend on? Here I break down budgeting in the easiest way for you, and show you how you can benefit from it:

The 50/30/20 budgeting method
We can’t say it enough times: Don’t spend more than what you earn! And the best way to do that is to keep track of what you spend.

One simple way of keeping track of your money is through percentage budgeting. It is a simple and straightforward concept – instead of allocating fixed amount to every line item, you establish a target percentage for each expense category.

One guideline that we like to use for percentage budgeting is the 50/30/20.

Here’s the breakdown:

FIXED COSTS
50%

Bills and fixed expenses such as rent,
mortgage, and subscriptions FLEXIBLE SPENDING
30%

Flexible day-to-day expenses
such as food, groceries,
transportation, entertainment,
etc. FINANCIAL GOAL
20%


Trip to Europe

Down payment
for first home

Retirement

1. Fixed costs – 50%
Fixed costs mostly consist of essential expenses, and it makes up half of your income.

For an average 20-something, fixed expenses are usually made up of rent (if one is not staying with his/her parents), phone bill, Internet subscription, car loan (if one owns a car), monthly parking at work, insurance premium and more.

Fixed spending – 50%
Nett income RM3,500 a month
50% for fixed expenses RM1,750
Room rental
RM600
Mobile phone bill
RM98
Internet subscription
RM178
Car loan repayment
RM650
Student loan repayment
RM200
Total fixed expenses
RM1,726
However, if you’ve listed down all your fixed costs and they come up to more than 50%, it’s time to take a hard look at your expenses. Perhaps you can downgrade your phone or Internet subscription, or even sell your car and turn to public transportation.

The beauty of a budget is, you will immediately identify where the problem areas are and you can make adjustments in your finances.

2. Flexible spending – 30%
Allocate no more than 30% of your take-home pay toward flexible spending.

These are day-to-day expenses that can vary from month to month, like eating out, groceries, shopping, hobbies, entertainment, or petrol.

To determine your flex-spending amount, first deduct your fixed costs and financial goal contributions from your income. This way, you’ll know that the balance for flexible spending is truly yours to spend however you want.

Flexible spending – 30%
Nett income RM3,500 a month
30% for flexible expenses RM1,050
Eating out weekdays
RM200
Eating out weekends
RM100
Groceries
RM250
Household items
RM100
Petrol & toll
RM300
Entertainment
RM100
Total fixed expenses
RM1,050
Flexible spending will require you to exercise discipline in order to be on track. If you have splurged on a nice dinner with your friends, then you will need to cut your spending elsewhere. Perhaps, by preparing your own lunch for the next few days, or forego paid entertainment for the month.

The key here is to ensure the overall spending allocated for flex-spending does not exceed 30% of your nett income.

3. Financial goals – 20%
Not sure what your financial goals are? Ask yourself what do you want in five, 10, 20, and 30 years down the line? How do you envision your retirement?

Financial goals are not set in stone, and should be reviewed every few years. However, having a rough goal will help you work towards achieving them.

If you allocate 20% of your income for your goals, you will ensure that your finances will be on track to reach your target.

Assuming you start with RM3,500 nett income per month, and on average you get a 5% salary increment every year. Here’s how 20% of your nett income makes a difference:

Year
Monthly salary
Total savings
Financial goals
1
RM3,500
RM8,400
You would have saved RM15,000 within 1.5 years for your Europe trip.
2
RM3,675
RM17,700
3
RM3,859
RM28,000
You would have saved about RM52,000 for the down payment of your first home (RM520,000)
4
RM4,052
RM39,400
5
RM4,254
RM52,000
23
RM10,750
RM692,000
You would have saved RM692,000 for your children’s college education.
35
RM19,306
RM1,978,600
You would have saved up a sizeable retirement fund to supplement your EPF savings.
* Assuming 6% per annum average returns.


Though this budgeting method sounds simple enough, it takes some discipline to stick to it. And it does not work like a miracle where your finances will improve and your debts will disappear overnight. You still need to work hard to make an sustainable impact on your finances.

The most important thing about budgeting is, it should be personalised to your lifestyle and spending habits. This budgeting rule serves as a guideline to lead you towards the right direction. Once you have an idea on how a balanced budget looks like, you can create your own budget to achieve your financial goals.

If this budgeting method doesn’t work for you, give this unconventional budgeting method a try.

Finance writer Michelle McGagh from London gave up spending for a whole year, aside from her mortgage and bills as well as £30 (RM167.15) a week for groceries and essential toiletries.

She said the frugal life made her happier, healthier and allowed her to overpay almost £23,000 on her mortgage.

Being spendthrift by nature, I decided I should give it a shot. I have always had problems reining in my finances and it’s about time I embarked on some plan to keep my money in check.

And as I am a little wiser – after my failed attempts to fulfil any New Year’s resolution – I decided instead of doing a McGagh, I would attempt to not spend for a week and see how much I’d save.

So, here’s how I did it:

Have a well-stocked pantry
As my wife cooks most of our meals at home, I already had canned food and other dried ingredients stored at home. If you are the proud owner of a skeletal pantry, stock up ahead of time.

I discovered that knowing that I have a well-stocked kitchen motivated me to stick to my no-spending approach. Why? Because I am less tempted to pick up take-out after spending a decent chunk of my salary to fill up those shelves.

Also, it gives me an idea to plan meals and also expect the unexpected. In moments where I need to dash off to work and have no time to cook, I just need to pop open that can of tuna and throw the meat into a Ziploc together with salad leaves – lunch is served.

Cheap ways to stock your pantry

Hold on to whole grains
Fill your pantry with whole-grain favourites such as brown rice, barley, rolled oats and whole-grain pasta. Stock up when you find a good sale or buy in bulk – bulk bins usually offer better unit prices than packaged grains.

Bet on beans
These are versatile sources of protein which you can add to soups and salads. They are cheap and lower in saturated fats. When buying canned, look for no-salt added or low-sodium.

Nosh on nuts
The dried variants might be expensive but it is good to have them around – great for snacks, breakfast and even salads.

Fill your pantry with flavour
Vinegars and other condiments such as Dijon mustard are great for quick, homemade salad dressings. Apple cider, rice and balsamic vinegars are all good options.

Spice things up
Speaking of flavour, keep the dried herbs and spices used often on hand. Use to add taste in place of extra salt or fat. The trick is to keep a few staples that you will use in most of your dishes, such as black pepper, oregano and thyme, which will go well with pasta.

Invest in healthy fats
Canola oil is a lower-cost healthy choice best used for cooking. Olive oil may be worth the extra cost when making dressings or vinaigrettes. By having different types of oil, you can choose to use the more expensive type of oil sparingly, and for certain types of dishes only. For example, you can use canola oil when you are deep frying, and use olive oil when you are pan-frying.

Buy basic baking items
Always have basic ingredients like flour, baking soda and baking powder stored completely in your pantry. They are great to turn one ingredient into a complete dish such as overripe apples or bananas? Make an Apple Crisp or Banana Crumble for a healthy dessert. Who says you need to throw away overripe fruits?

Don’t be shy of instant noodles
I am no healthy living evangelist and instant noodles have saved my life more than once. I don’t binge on them but once in a while, they serve as great comfort food. They have a long shelf life and cheap, too.

Pick the best week
The week doesn’t need to start on Monday or end of the weekend, but I am a traditionalist, so it had to start on a Monday and end on a Sunday.

The last week of June worked best as it was when I naturally had to stretch my ringgit and it so happened there was a company dinner – that took care of one meal.

It also allowed me time to plan and get my family in on it. Planning is crucial because you need to buy enough to last you for the week. It also has to be the week where you’d exercise the least amount of effort.

Plan, revise, repeat
I factored in unforeseen circumstances, such as toilet paper running low, and even that usual run to the hypermarket to buy baby’s milk. I took into consideration that the weekend also coincided with Hari Raya, a major festival.

I wrote all my weekly financial needs, saw what I could do without – and this bit is crucial because I had to let go of some expenses – and repeated the whole process until I knew how much I could comfortably set aside for groceries and necessities without exiling my entire family to frugal-land.

Some of the expenses that I had to say goodbye to during the no-spend week was, my usual morning coffee, lunch at work and the occasional indulgence of snacks.

Learn to adjust
That’s the toughest part: adjusting. Giving up that morning cup of Starbucks for free coffee from the office pantry was painful to say the least. I couldn’t have that Sub of the Day and had to settle for some egg sandwich, which was equally tasty.

There were days where I just wanted to spend, spend, and spend. I would even find a reason to spend when I didn’t need to.

As my colleagues knew about my valiant effort, I knew I couldn’t lose. So that provided some motivation.

Also, my wife helped me to cook the meals. If it were left to me, I would have just had bread and fried egg for most of my breakfast and lunch.

So teamwork is necessary, one way or the other.

So how much did I save?
This is how much I usually spend on any given week, including those family outings on weekends:

7-day spending
Coffee: RM84
Breakfast: RM100
Lunch: RM200
Tea/snacks: RM100
Dinner : RM200
Overall total: RM684
However, I only need RM250 for a week’s grocery for a family of three. So just by cutting down on food, and applying a no-spend week, I saved RM434! Stretch this over four weeks, and I can potentially save RM1,736!

With that amount, I can easily build an emergency fund or even invest that money in a unit trust and reap the rewards in the long run.

If doing it every week is too far-fetched, you can definitely do a monthly detox. The money saved over a year – that’s RM5,208 in savings – would bring you closer to your financial goals, or even your annual family vacation!

All you need is: to start
That was my problem. When I pushed forward the idea it was months before I attempted to try a no-spend week.

But once I got the ball rolling, it was manageable. As I am writing this, I didn’t spend on breakfast, lunch or dinner. That already amounted to some savings.

Of course, like all goals I did reward myself with a latte, and that felt good. However the exercise drives home an important point: no matter who you are or what you do, you can still exert some control on your finances.

Even though my no-spend week has come to an end, I still find myself packing my lunch to work every other day. The exercise has put in place a routine of preparing my meals from home, and it is a much welcomed routine for my wallet – and stomach!

5 tips to no-spend success

See what is going on in the week. Pick a week that isn’t going to be stressful. If your desired week is period where you’ll use a lot of money, don’t pick that week.
Decide what you want your surplus cash to go toward. The concept is saving money but a plan on what to do with the extras makes it easier to have that extra motivation.
Set a budget for groceries and necessities for the week. Take stock on anything you are running extremely low on, including toilet paper or shampoo. As for meal planning, pick local ingredients.
Get creative with entertainment. If you want to save on leisure, then the nearby park is a great way to unwind. Also, why not relax at home?
Track your progress. Use an app or even a spreadsheet to note your progress and how much money you’ve saved each day.

In a matter of weeks, Malaysians will mark the end of the fasting month and greet the Hari Raya festivities with the usual balik kampung sojourn.

It’s a time to catch up with family and friends, flash that baju raya and indulge in a hearty meal of lemang and rendang.

But it is also a time of heightened financial spending. Online sales are expected to surge upward by at least 50% throughout this year’s Raya month, according to digital marketplace 11street.my

Electronics, home gadgets and clothing are sought-after items while demand for car services and road safety-related items are expected to rise, it added.

Now, while we don’t mind a little splurging in the name of festivities, money is no respecter of times and seasons – you’ll just have to use it wisely.

Here are three things you should avoid doing this Raya at all costs:

1. Buying a new set of wheels
By this we don’t mean new tyres, which you should change if they are worn out or have past the expiry date.

For Malaysians a car is more than moving from Point A to Point B – it’s a status symbol. But there’s a more sobering reality: one of four bankruptcy cases in the country are due to the purchase of vehicles.

The Insolvency Department revealed that 27.94% or about 28,374 bankruptcy cases between 2011 and 2015 fell into this category.

Now we know that purchasing a car in Malaysia is easy: all you need is some basic documentation, a low down payment and approved hire purchase loan.

Heck, these days there are many financing programmes empowering consumers to own an upmarket auto through a seemingly reasonable monthly repayment.

But there are many financial pitfalls – from fuel to servicing to road tax and insurance – when it comes to car ownership and we are not just talking about depreciate rates and loan interest rates.

How this ruins your Raya

First, restricted cash flow. Since you would probably take out a loan for your car, monthly repayments kick in once you are handed the keys.

So you’ll probably have to cut back on a lot of things in the name of servicing that car loan.

Second, run the risk of having your car repossessed. This is a reality that comes with car ownership.

Festivities or not, the moment you draw out a loan, you are subject to paying the loan according to the agreed deadline between you and the bank. Not being able to do that because you blew your budget will not cut it.

The last thing you want is to recall a Raya where your car was repossessed and put up for auction.

2. Drawing out a personal loan
The World Bank last year discovered that only 36% of Malaysians are financially literate.

Such illiteracy is filled with dire consequences: bankruptcy. Actually besides car loans, many Malaysians are bankrupt due to personal loans.

Personal loans, just like credit cards, exist for a reason. With good intentions, you could finance a pet project or even consolidate and pay down debt.

But you can definitely use a personal loan for a wider range of intentions such as vacations, home renovations, weddings and even big ticket items such as a new surround sound system for your home.

If showboating is what you have in mind, think again. Under the revised bankruptcy laws, the threshold for debt has been increased to from RM30,000 to RM50,000.

Banks are offering personal loans these days up to RM150,000 and you could be swayed into drawing out a loan in the name of a Raya upgrade. But committing to those monthly repayments though…

How this ruins your Raya

First, tighter cash flow. Like a car loan, monthly repayment kicks in once you sign the agreement, meaning you’ll have less cash to use for Raya, worse if you have to hand out green packets of duit raya to friends and family members

Second, outstanding debt affects your credit score. This makes you a less desirable candidate when it comes to applying for a mortgage or car loan. You could be denied a loan or even get stuck with a less favourable interest rate – all these affect your finances in the long run.

Worse is if you have a family and children, which means you could potentially even financially neglect them just to pay off your debts.

Third, bankruptcy. All you need to do is have an outstanding of RM50,000 and above with a default period of at least 6 months to be declared bankrupt. Your assets will be administered by the Director General of Insolvency (DGI) to settle outstanding debts.

Yes, this means all your assets and properties and sell or dispose them to repay creditors. Also your passport will be held by the DGI, meaning you can’t leave Malaysia.

3. Maxing out your credit card
It being the festivities and all, splurging a little on that baju raya is okay. But swiping that plastic for a Prada tote bag or Jimmy Choo pumps or an iPhone? And don’t get us started with shelling out hundreds for jars of kuih raya.

The Asian Institute of Finance found that 47% of young Malaysians are engaged in expensive credit card borrowing.

It found their debt woes were the result of impulse-buying behaviour coupled with easy access to, well, personal loans and credit card financing.

A credit line is helpful if moments where you truly need cash and by this we mean more serious reasons than compulsive shopping.

When used properly, a credit card helps you save, whether it is in the form of cashbacks or discounts and privileges. Some credit cards even offer seasonal treats including festivities such as Hari Raya.

Not being prompt on your monthly payments or skipping payments altogether can lead to dire straits and you are looking at anywhere from incurring late payment charges to a black mark on your credit report to bankruptcy.

How this ruins your Raya

Straddled with long-term debt. If minimum monthly repayment is your MO, you are going to be straddled with debt for a few more Hari Rayas. Looking forward to future festivities is not going to be fun as you will greet each Hari Raya with tighter cash flow and debt.

Second, you’ll deplete your savings. Either by paying off debt or to manage your lifestyle. With the odds against us, from insufficient EPF funds to retrenchments, a decent amount of savings can help us survive such devastating outcomes.

Not having any savings would just leave us vulnerable. Then there’s the usual stuff that happens if you can’t service your debt – all that we’ve mentioned previously.

Keep things simple
Spend if you can afford to. The joy of Hari Raya or any festivity is to actually indulge in the company of others.

The customary duit raya handed to friends and family, particularly children, and the open houses all embrace the spirit of living in community.

In fact, you don’t need to sell your kidneys to look good during Raya – discounts aplenty and you can surely snag an affordable baju raya.

Financial prudence is timeless but so is debt. Remember that an abuse of credit has long-term consequences and if you are not prepared to promptly pay it down, not even your brand new baju raya can help you in that department.

sumber:https://www.imoney.my/articles/budget-50-30-20
             https://www.imoney.my/articles/no-spend-week
             https://www.imoney.my/articles/common-financial-mistakes-hari-raya
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