5 Tips To Budget and Plan For Your Expenses Better in 2022
- By CompareHero.my
- January 28, 2022
These last couple of years have taught us a lot of things, one of which is that life can drastically change in the blink of an eye. And while you may not always be ready to face rainy days, being financially stable does make a difference.
As we’re about to step into a new year, here are some ways you can plan ahead for your expenses in 2022.
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1. Categorise them according to needs & wants
We all know what needs and wants are. Needs are your basic necessities like food and shelter and wants are the things that help make your life comfortable, but aren’t essential.
When you get your salary at the end of the month, it can be tempting to want to spend on some fancy things. Now there’s absolutely nothing wrong with that, and if you’ve worked hard the whole month, you shouldn’t deprive yourself of a treat or two.
However, before swiping your card or hitting that ‘Pay Now’ button, think if you really need that item. If it’s something you don’t already have or something that needs an upgrade, go for it. But if it can wait, you probably could do without it…for now.
Some people even set a waiting period—10 days, 2 weeks, a month, etc.—before buying an item. By the end of that time frame, if they don’t feel like getting it anymore, it probably means that they dodged an impulse purchase. If you want to be super careful with parting with your hard-earned money, you can try this technique.
Not only is this good for your wallet, it’ll also prevent you from cluttering your home with unnecessary stuff. But like we mentioned earlier, it’s okay to spoil yourself every now and then. So when budgeting, do set aside enough for this purpose as well.
2. Identify your fixed expenses
List down all the things that you have to pay every week or month such as your rent, phone or Wi-Fi bills, or car loan. Because these are fixed expenses, they should be at the top of your list when budgeting.
Related: 6 Ways to Lower Your Electricity Bill
Before you start allocating money for anything else, make sure you have enough to cover these first. The last thing you want is to have spent on other things without sufficient funds for your bills. Once you pay off your commitments, you’ll have more peace of mind to spend on other things.
3. Prioritise the most crucial ones
Once you’ve noted all the items you know you have to pay each week or month, rearrange them by what needs to be paid off first. All of your fixed expenses may be equally important, but make note of any late payment charges that you may incur if you don’t pay up on time.
This might be common sense, but these extra expenses can be avoided as long as you settle your debts when they’re due. You definitely don’t want to have to part with more money, on top of the bills you already need to foot.
4. Use a budgeting app
Sure, in theory you might know how much to spend, how much to save and so on. But keeping track of your income and expenses can be quite tricky. To consolidate all of this in one place, you can use a free budgeting app.
Related: 10 Free Budgeting Apps That Can Help Track Your Expenses
These apps can even help you plan expenses with other family members, set realistic spending goals, caution you when you’re overspending and so on. Apps like Mint and Spendee will even give you monthly reports and assessments which can help you rework your spending plan for the next month if needed.
5. Set up an emergency/reserve fund
Coming back to the whole point of being in uncertain times, you should always have a sum to carry yourself through rainy days. If you suddenly lose your job or get sick, that extra cash would serve as something to fall back on.
Dedicate a sum from your salary each month and put it in your emergency fund. It’s up to you to decide how much you want to contribute each month, but a rule of thumb is that you should have enough to cover at least 6 months of expenses. As much as possible, try to use your emergency fund only when it’s absolutely necessary. Other than that, it’s better to leave it untouched.
All in all, be clear about the items you are spending on and critically evaluate their importance. Most importantly, stick to your plans.
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What Are Investments And How To Start It
- By CompareHero.my
- January 27, 2022
After successfully conquering your finances, now you’re about to start building your wealth. We all have heard the term ‘making money work for you’ but how does that actually work? Putting in your hard-earned money into the stock market can be daunting when you’re unsure how to go about it, so here’s what you need to know about investments:
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What is investing?
In simpler terms, investing is when you invest your money with the ultimate goal of receiving more money in the long run, a higher return than the amount you first invested with. Investing isn’t tied down to just stock markets – you can invest in real estate or even your own business. Wherever you put your money into, you are expecting to earn even more money in the near future.
When should you start investing?
The general rule of thumb is that you should start investing as early as possible, mainly because the sooner you start, the more time you’ll have to grow your investments. However, there are several factors to take into account before you start investing:
Make sure all of your debts are paid off
Since debts are part of your monthly expenses, the least you can do is settle them first so that you can invest worry-free.
Have emergency savings
Imagine relying only on one income and it is merely enough to cover your debts and expenses. That’s a big no-no, you’ll have to prepare some sort of emergency funds so that you can invest without worrying about losing all of your money.
How to start investing?
- Come up with a specific budget
When you start investing for the first time, be sure to set aside a budget on how much you plan to invest every month. Come up with an investment strategy after you’ve finalised your budget. Remember, it doesn’t have to be a large amount, you can simply start with how much you can afford – even if it’s small.
- Find out your investment style
Everyone has a different goal when it comes to investing. Hence, you should identify how much of a risk-taker you are as well as the total time spent to invest and where you intend to invest the money.
- Use the right trading platform
Using the right platform for trading could make or break your investments when you’re just starting out as trading platforms have varying fees or minimums for deposits, withdrawals etc.
- Create an account and start investing
Now after getting the basics done, you can begin creating your investment accounts and start investing with the amount that you’re most comfortable with. Remember that you do not need to start with a large amount of money, rather you should start with an amount that is within your capabilities.
- Regularly check your accounts
Just like everything else that you own, you should keep checking your investment portfolio and monitor it on a frequent basis. That way, you can identify whether you need to sell off your stocks or keep them, and so on.
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Is It Compulsory For You To Have Car Insurance in Malaysia?
- By CompareHero.my
- January 25, 2022
Simple answer, yes. At the very least, you must buy and renew a third party car insurance on an annual basis in order to get and renew your road tax for your vehicle. However, there is additional coverage available based on your preferences such as windshield and flood coverage.
Buying third party car insurance is compulsory in Malaysia if you own a car. If you do not own third party car insurance, you will not be able to renew your vehicle’s road tax from Road Transport Department (JPJ) Malaysia. Driving without a valid road tax can cost you penalty in fines up to RM3,000 depending on court’s decision.
Related: Unlike Some Leeway For Road Tax, You Must Have A Valid Car Insurance During The MCO
Why is car insurance compulsory?
A basic third party car insurance offers coverage when you injure someone else in an accident, including his/her physical self and vehicle’s damage. However, you will not be able to claim for loss over your damage on both vehicle and yourself as third party insurance is structured in such a way under a minimal fee.
If you are driving an expensive car, say more than RM30,000, it is safer to buy a comprehensive insurance policy to protect yourself and your car in case of an accident, fire, and theft.
Not owning a third party car insurance and renewed road tax can bring you damages in times you expected the least. Other than getting busted by the authority which can cost you up to RM3,000 worth of fines, you should know that you will be responsible entirely for both your vehicle’s and another party’s vehicle’s damage.
For instance, Ahmad ran the red light and bumped into someone else’s car without any injuries caused. However, he realised that his car insurance is expired and road tax is way overdue while he is on his way to make a police report. As a result, he has to bear the subject’s and his own vehicles’ damages that go up to RM8,000 in total.
Hence, it is wise to keep track of your car insurance and road tax which go hand-in-hand most of the time. During the renewal process, JPJ online service will check any outstanding summons and blacklist records at both JPJ and Polis Diraja Malaysia’s database systems. In order to proceed with this renewal, it is necessary for you to make payment for all your outstanding traffic offences recorded.
Related: 10 Ways To Save Money On Car Insurance Premiums
Having comprehensive car insurance is even more important for those who are working as freelance ride-hailing services drivers such as Grab to cover the physical damage of their passengers from unfortunate events.
Look out for more articles on car insurance as we embark to keep you informed and educated on what you need to know when protecting yourself and your vehicle. Thinking of getting a comprehensive car insurance policy? Click the link below for more info:
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Money Lessons From 2021 That Can Help You Save More In 2022
- By CompareHero.my
- January 24, 2022
The COVID-19 pandemic has changed the way we work, learn, shop, play and live this year, and potentially, forever. By adapting to these changes amid increased unemployment and economic uncertainties, we have also learned valuable money lessons to safeguard our financial health in the new normal.
Our wallets and job stability may have taken a beating in 2021, but we live to fight another day, armed with important tips so our finances will never be caught unawares again. Here are seven money lessons that will benefit you in 2021.
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1. An emergency fund is super important
Ever since we were old enough to earn a paycheck, we have been encouraged to allocate parts of our salary to our savings (an untouched amount of money that is meant for your long-term goals) and emergency fund (which should comprise six months’ worth of income that you can use for unexpected expenses like retrenchment, job loss and urgent medical care). However, how many of us have actually followed that advice?
The Edge Markets reported that an estimated 48% of Malaysians still do not have any emergency savings. This was based on a survey by financial literacy platform Multiply.
If you are one of the more prudent Malaysians who have set up an emergency fund, well done! Since 2020 and 2021 were two years where a significant number of Malaysians were being retrenched or laid off, some of us have resorted to using our emergency savings. According to a report by Malay Mail, MIDF Research mentioned that Malaysia’s unemployment rate was around 4.3% in 2020 (compared to 3.3% in 2019).
So in the event of a job loss, you can use the emergency fund to support yourself and your loved ones while looking for new employment.
Lesson: Emergency savings will help you prepare for unexpected life circumstances that require you to spend more than usual – such as unemployment and car repairs.
Don’t have a 6-month emergency fund yet? It’s never too late to start one. This could be one of your New Year’s resolutions for 2022!
Here are some tips about starting your emergency fund:
- Keep your emergency fund in an account that is separate from your regular savings.
- Make sure you can easily withdraw cash from your fund.
- Check if your employer can directly deposit a percentage of your salary to your emergency fund account.
- If you have new financial commitments in your life such as the birth of your child, you should continue building your emergency fund beyond your original goal.
Related: #NewNormal: What To Do Immediately After Getting Retrenched Post COVID-19
In the event of a job loss, you can use the emergency fund to support your family while looking for new employment.
2. Live within your means
The year 2021 has shown us how important it is to have savings to fall back on when the unexpected happens. So in order to save more, let’s spend less.
Splurging on unnecessary items when you have limited funds is not a wise move, but it doesn’t mean you have to give up every luxury. You can find a balance between enjoying life and growing your savings by writing a budget each month and following it.
Calculate how much you need for essential expenses like bills and debt repayments. Then allocate a particular sum for your savings and emergency fund. You can use the remainder of your income to spend on things you enjoy.
Managing your money can also be a hassle-free process when you use budgeting apps like Mint, PocketGuard and Goodbudget.
Lesson: With effective financial planning, you can still attain the latest gadgets, savour fine dining and gratify your heart’s desire while your savings continue to grow.
3. Having your own medical insurance coverage
When people lose their jobs, they will no longer be able to utilise their previous employers’ health insurance plans as well. Thus, it is highly recommended that you also purchase your own medical insurance policy.
When we are in good health, some of us often question the need to spend money on medical insurance coverages. Others may postpone purchasing a policy… until it’s too late.
As 2021 has proven, a health crisis can strike anytime. If you fall ill or get injured while looking for a new job, brace yourself for some potentially expensive hospitalisation and outpatient treatment bills that might make you even more sick than before.
A medical insurance policy could have protected you from paying the full costs of the medical treatment. That’s why you should make it a point to allocate some money for your own insurance plan every month.
To purchase an insurance policy, you should start by conducting some online research for a plan that best suits your needs and budget. Many insurance companies also offer the option to purchase your policy online.
So good luck! Your quest for the ideal medical insurance plan begins here.
Lesson: Buying an insurance policy now might save you from a lifetime of medical debts later.
4. Avoid unnecessary debt
Large credit card bills and personal loans might seem manageable when you have a job, but you will feel the crushing pressure of debt if you become unemployed.
Until you find another job, your financial burden will become heavier as the monthly interests pile up on your existing debts. If you are still unable to pay your debts after a period of time, be prepared to face:
- A destroyed credit score
- Legal action from the banks
- Bankruptcy
Lesson: All these debt-related problems can be avoided if you use your credit cards responsibly. You also need to remember that a personal loan should be used for sensible reasons such as urgent medical operations and education courses.
Related: 7 Strategies To Get Out Of Debt Fast During The COVID-19 Pandemic
Avoid accumulating unnecessary debt by using your credit cards responsibly.
5. Stay safe with contactless payment
Since the start of the movement control order (MCO) on March 18, 2020, food delivery services like GrabFood and Foodpanda have recorded a huge increase in customers. By minimising cash usage and physical contact, these services provide a safer way to order meals from your favourite restaurants.
Whenever you don’t feel like preparing a home-cooked meal, just whip out your phone and order some food via a mobile app. Their delivery rider will soon arrive at your doorstep or condominium lobby with your meal. In addition, you can also have groceries delivered to your home!
The cashless payment approach has also increased in popularity at retail outlets. Customers can pay for their items by using a selection of e-wallets, which includes apps like Touch ‘n Go eWallet, GrabPay and Boost.
If you prefer to shop from home, e-commerce platforms such as Lazada, Zalora and Shopee offer a wide variety of products ranging from gadgets and electrical appliances to clothing, accessories and shoes.
Lesson: Despite the COVID-19 pandemic, the growth of cashless payment technology and e-commerce platforms will ensure that you can continue to shop in a safe environment.
Shop safely from home via e-commerce platforms such as Lazada, Zalora and Shopee.
6. Get a side job to earn extra money
You may have lost your job or gone through a pay cut, but you will still need adequate income to cover your monthly household expenses and bills. To support your family and yourself in these difficult times, you can get a part-time or freelance job.
This year, many Malaysians have taken on side jobs such as delivering goods, baking from home and conducting online tutoring. You can look for similar side gigs through job search platforms like WOBB and JobStreet, or offer your services on freelance platforms such as Toptal and Freelancer.
Lesson: Need extra money to fulfil your financial commitments during the COVID-19 era? Get a part-time or freelance job.
To earn extra money, many Malaysians have taken on side jobs such as delivering goods.
7. Future-proof your career by upskilling and reskilling
The job market has become increasingly competitive. These days, one open position can attract up to hundreds of applications. In order to stand out from other job applicants, you need to quickly adapt to the latest developments in your career by mastering new skills through upskilling and reskilling.
According to the Oxford dictionary, upskilling is “the process of learning new skills” while reskilling means: “to learn new skills so that you can do a new job.”
Thus, if you are looking for further career advancement in your current field, you can sign up for relevant upskilling courses via online learning platforms such as Coursera and LinkedIn Learning. These platforms also offer reskilling courses for people who plan to switch careers or adapt to different job responsibilities in an automated and digitized work environment.
Besides that, YouTube tutorials, webinars and e-books are other avenues that can help elevate your skills to the next level.
Lesson: To achieve career success, you should continue to develop additional work-related skills through upskilling and reskilling.
Ready for 2022?
We have almost made it to the end of 2021. Phew! Let’s learn from past experiences and make 2022 our best financial year yet.
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5 Ways Malaysians Can Save On Their Monthly Petrol Bills
- By CompareHero.my
- January 19, 2022
The MCO kept most of us indoors in an effort to contain the spread of Covid-19. Reduced movement meant seeing fewer cars on the road and because most of us were home, we got to drastically save on our petrol bills each month.
But now that things are slowly opening up again, people are going back to their daily routines and that just means two things: heavier traffic and more petrol usage.
Sure, one way to ensure you get your money’s worth each time you refill your tank would be to avoid high traffic times altogether. But that’s not always possible. So, here are some practical methods you can follow to help cut down on your monthly petrol budget.
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1. Take the excess weight off your car
Let’s face it, at some point, all of us would have turned our cars into a mini storage area. It’s not uncommon to find boxes or bags in the boots of a lot of cars. Now, that might not seem like a very harmful thing, since cars are meant to transport belongings anyway.
But in the long run, it can be damaging to your precious vehicle. According to Automotive Fleet, an extra 200 pounds (that’s roughly 90.7kg) can take away one mile (1.6km) of fuel efficiency!
Besides causing your petrol to deplete faster, carrying too much weight in your car can also ruin its suspension. Make sure you know the maximum load your car can withstand and try not to exceed that. You surely don’t want to spend on fixing things you can avoid in the first place.
2. Don’t increase your speed suddenly
Unfortunately, we Malaysian drivers aren’t known for being the most courteous ones on the road, and we wouldn’t think twice about overtaking slow car in front of us. But suddenly accelerating your speed like that can force more fuel to burn. This also applies to instances where you weave in and out of traffic, repeatedly braking and pressing on the gas pedal.
To be much kinder to your fuel tank (and your wallet), increase your speed gradually. If your car has a cruise control feature, turn it on as that can be helpful as well.
3. Avoid letting your car idle for too long
If you’ve parked your car to wait for someone, don’t leave the engine running for too long. When you know it’s going to be quite a wait, ideally you should turn off the engine altogether. However, do note that starting and stopping your engine too many times can also take up a lot of fuel.
So, only if you’re sure that you’re going to wait quite awhile, go ahead and turn off your engine and wind down your windows for some fresh air.
4. Don’t miss any of your car service appointments
Up next on how to save on your petrol bills: servicing your car. We all know the importance of getting your car inspected frequently. Changing your black oil, timing belt, coolant and so on when needed will ensure you get to drive safely. Some other parts that get replaced during these routine checks are air filters and fuel filters.
Failing to put in new filters when it’s time means your car is going to burn petrol inefficiently. And besides just using up your fuel unnecessarily, you’re also going to end up releasing harmful gases into the air.
5. Be mindful of your AC usage
It’s common knowledge that your air-cond is powered by your fuel. Using the air-cond in itself isn’t an issue, but make sure you don’t frequently use it at the highest speeds, if it’s possible.
Colder AC only means more fuel usage, so if you really can help it, maintain it at lower levels. Living in a climate like ours means your car can get hot pretty fast. To keep your car cooler so you don’t need to use excessive air-cond, Automotive Fleet suggests parking it in shady areas.
Hopefully these tips will be of help to you, especially if you’ve just gone back to work (read: back to being stuck in traffic jams for hours). Saving on your petrol bills aside, we do need to be careful with how we use fuel as it’s a non-renewable resource and we need to ensure there’s enough for future generations.
Speaking of using fuel efficiently, below is a list of the most affordable fuel-efficient cars in Malaysia. Check it out and let us know what you think!
