Simple Tips To Avoid Overspending On Your Credit Card

• By adji.hendrawan
• July 18, 2022

A credit card is often associated with debts and overspending, but you can turn it into a useful tool to help you build a credit score history and earn rewards. Check out these simple tips to avoid overspending on your credit card. 

Plan your purchase every. single. time.

Imagine swiping your credit card every time you like something without weighing its pros and cons. This is actually a common mistake for first-time credit card users! Therefore, We recommend that you plan your purchases every single time.

Make it a habit to ask yourself the following questions before making any purchases:

• Do I need this?
• Can I afford this?
• Can I buy this cheaper elsewhere? 

To make sure you’re making the right decision, you may want to wait at least three days before purchasing anything. This method will allow you to think and consider each purchase. The next time you’re going shopping, try to implement the tips above and stick to your shopping list! 

If you’re an impulsive shopper, we would recommend you to leave your credit card at home when you’re going window shopping, which brings us to our second point! 

Leave your credit card at home 

Yes! Leave your credit card at home, especially when you know you’re going window shopping or any outing that will lead to spending money unnecessarily. This will not only help you to avoid overspending but you will also be forced to stick to your budget.

If you feel you need a more stringent approach, you can freeze your credit card-not literally, of course!. Check with your credit card issuer if they will allow you to freeze your credit card for other reasons apart from security purposes. 

Wondering if this will affect your credit score? Read more here.

Track your spending every day

Most people fail to remember that when you purchase something with a credit card, it means that you owe the credit card issuer money and you will have to pay it back. This is what makes credit card owners end up overspending and in debt. 

The easiest way to overcome this is by tracking your expenses daily. Try to jot down your purchases regularly. We would suggest doing so on your phone so you can access it anytime. We would also recommend you revise your budget sheet before going out so you have a rough idea of how much you should actually spend on that day. 

Related: Should you pay for your daily expenses with Cash or Credit Card?

Say NO to multiple credit cards

Should You Have More Than One Credit Card? Well, It’s not wrong to own multiple credit cards… If you know how to manage multiple credit cards, it can be rewarding! 

However, having multiple credit cards is one of the reasons people tend to overspend, especially when the rewards offered by card issuers are appealing. Try to find one card that provides all rewards and benefits that are suitable to your lifestyle so you can get the most out of it. Check out all credit cards from major banks and find the one that suits you best, here. 

A credit card is a very effective tool to manage your finances as it offers rewards, points, and cash back, but it can definitely backfire if you fail to spend diligently. Try to plan your purchases, opt to leave your credit card at home, track your expenses regularly, and avoid having multiple credit cards to avoid overspending on your credit card.

What Is Lifestyle Inflation & Why It Could Make You Poor!

• By Dharshaini Grace
• July 15, 2022

You’re probably aware that we’re going through inflation right now in today’s economy, but there’s another inflation that you’ve probably been living with all this while but never noticed – it’s known as lifestyle inflation. Get to know what is lifestyle inflation and why it could make you poor!

DEFINITION.

Lifestyle inflation is when an individual’s spending increases as their income increases. It’s also known as “lifestyle creep” because these lifestyle changes can sneak up on us! 

IT HAPPENED TO ME. 

Have you ever realized that the more you earn, the more money you spend too? YEAH. There’s a thought in us, where we think, “Oh yeah, now I’m earning more, I can finally save up that additional increment!” 

Yeah, hold it – that’s what I thought too. But then recently I noticed something peculiar, my demand for “wants” has now changed to “needs”. 

I’ll give you an example, just months ago, I was okay with using drugstore skincare brands. But now that I know I’m earning a little better than before, my skincare needs have unconsciously changed to buying bougie skincare products!

That’s when I realized, I was falling trap into lifestyle inflation. Things that were once luxuries in life have now become necessities. It happens when your lifestyle or standard of living improves as you make more money. 

WORK. SPEND. REPEAT. 

It’s natural to spend more as you have more money to buy the things that you want. After all, we work hard to buy and do the thing we love! 

But here’s the problem, you can get stuck in a cycle of living paycheck to paycheck or worst, fall into debt. 

SIGNS OF LIFESTYLE INFLATION. 

• Buying or renting a larger home than what you need. 
• Your amount of monthly savings isn’t increasing. 
• You’re no longer on a budget. 
• Indulging in way too many expensive habits. 

AVOID FALLING TRAP INTO LIFESTYLE INFLATION.

1. Be aware of emotional spending.

Emotional spending happens when someone goes out on a shopping spree to make themselves feel good. You might end up buying something that you don’t need or want all because you were feeling angry, sad or stressed. 

2. Spend your raise intentionally and strategically.

One way for you to spend your raise wisely is by creating financial goals so you don’t lose track of your finance. Set your financial goals and align your spending against your goals. For example, you should only upgrade your car to fit your family’s needs. 

3. Don’t try to keep up with your social circle or family.

Peer pressure is real. But this isn’t a “Keeping Up With The Kardashian” show! Seeing your family and friends with the latest Apple iPhone or driving a brand new car may make you want to own one too, but remember, spend according to your means. At the end of the day, we don’t know their financial commitments and background. For all you know, they may also be in debt for living that luxury lifestyle! 

Now that you know about lifestyle inflation, try to be more conscious of your future lifestyle changes and shake off that lifestyle creep! 

Do you need a degree to succeed in M’sia?

• By CompareHero.my
• July 14, 2022

It’s time for me to pick out a degree that’s more or less going to define most of my early 20s. With okay-ish grades and no passion for the sciences, there were only a few courses I could possibly pick that would land me a job in Malaysia.

Eventually, I applied for Law at a local university. It was the closest thing to writing and helping others, two things I have always enjoyed. I had hopes and dreams of becoming like Michael Ross from Suits – or Harvey Specter if I was lucky. I mean, just look at Donna! However, 3 months into my degree, I knew that Law was not for me. I was always a creative person and law was quite the opposite. Luckily for me, I got to gain skills that I would later apply to my career.

A few days ago, one of my old classmates asked if I think that I would’ve succeeded even without a degree since I never went into the legal world. That got me thinking: do Malaysians still need a degree to succeed? Let’s take a look at the pros and cons of not getting a degree.

Pro #1: You’ll be saving 3 to 4 years

I’ve heard stories of non-graduates who ended up making more money than their peers who got a degree. When asked why, it’s usually because they had already worked their way up over the last 3 to 4 years, giving them a head start to gain all that experience at a young age.

Plus, many graduates like myself end up in fields unrelated to their degrees after graduating. We all know graduates who graduated in some expensive universities overseas just to end up in a low-paying job.

Pro #2: You’ll be saving tens of thousands

Let’s be real, with it costing upwards of RM20,000 per year, the tuition for a degree these days ain’t cheap. As a matter of fact, many graduates end up leaving university with a negative net worth and a fresh, new loan to service.

Moreover, getting a degree overseas would be much more expensive – likely the down-payment of a nice 3-bedroom condo these days. That’s a hefty debt to bear when you’ve just started working. Though it would be more challenging to succeed without a degree, you would be debt-free with a clean slate to build opportunities on.

Pro #3: You get the opportunity to pick up more skills with short courses

It’s a different era. Whether it’s creative writing, graphic design, business management, investment, or knitting, these days, you can take all kinds of short courses to build a career with. Moreover, some of these courses could give you a professional license of certificates for jobs, such as teaching or financial planning!

Also, short courses can be done online, in school, or even overseas. And the best part is you would still graduate with money in your pocket, debt-free. Thus, you could pick up skills that aren’t being taught in universities and even start freelancing. Many young adults are starting their own businesses these days with creative skills, such as crocheting, woodworking, or even makeup formulation. Just take a look at the founders of HYGR! They left the legal field and started selling viral lipsticks, and honestly? It sounds like a dream.

Con #1: You’ll have limited job opportunities without a degree

One of the most obvious downsides of not having a degree would be the lack of job opportunities you’ll get. You’ll definitely miss out on the chance to be a doctor, a lawyer, or an engineer, and risk disappointing your Asian parents, but you already know that.

Nonetheless, if you’re not looking to be a part of the gig economy, it will also be much tougher for you to land an interview at a larger company without a degree. We know it sucks, but in a country where graduates are the norm, it’s understandable why non-graduates are sometimes overlooked. I mean, if anything, there are way too many graduates and the job search market is pretty damn competitive!

Some people without degrees work their way up the corporate ladder and eventually do earn their dues. And although that is incredibly respectable, it is definitely no easy feat.

Con #2: You’ll miss out on networking in university

Though many nights are spent partying or Netflix and chilling (we don’t judge), universities are where you’ll be able to do some solid networking for the first time. You’re between the ages of a teenager and an adult, and so is everybody else who’s around you. You see these people in class everyday and one of them could help you land an amazing job opportunity someday. However, if one works hard enough, they can still network through LinkedIn, social events, and more.

Let’s be realistic…

While it’s definitely easier to land a job interview at an MNC with a degree listed in your resume, it’s still not guaranteed. These days, getting your dream job just isn’t easy anymore, so you shouldn’t get a degree for that reason alone. Be sure to think it through when deciding what you want your career path to look like. You don’t have to know what your next 5 years will be like immediately, but you can start by looking at the kind of skills you have and would like to cultivate.

M’sian mom shares the cost of raising a kid in 2022

• By Dharshaini Grace
• July 13, 2022

What is the cost of raising a kid in Malaysia? Now having a kid is no easy matter, especially when you add finances into perspective. The National Population and Family Development Board report back in 2020 indicates, that financial factors are major obstacles for couples when it comes to their desired family size. 

“According to the 5th Malaysia Population and Family Survey, 65% of married people said they would like to have more children if financial issues were not a hindrance.”

Director-general, Abdul Shukur Abdullah. 

Costs that took a toll on parents included the high price of baby products and food, such as disposable diapers and milk, plus babysitting and high nursery fees. 

Now with the current high cost of living and inflation, raising kids is no mere feat! While I don’t have a kid, I can only imagine how tough it would be to raise a kid in today’s economy. #LetsBeReal, I ONLY have enough to spend for my OWN necessities, yikes! 

So I asked Nur Ainaa Samsudin, 32, who’s working as a radio news presenter and a mom to an adorable 5 years old boy, Muhammad Aisy Rizqy – current obsessions include dinosaurs, drawing, and coloring. 

This is *Ainaa’s story. 

*To be honest, my husband and I were just married for 6 months when I first found out that I was pregnant. So we had no savings for a kid at the time. At first, we didn’t expect how high the cost would be. We had ZERO knowledge. It was only when I started surveying the cost to deliver at a private hospital that my husband and I panicked! 

Who knew giving birth at a private hospital could cost tens of thousands??? 

We only started our savings for a kid when I found out I was pregnant. First, we opened up a bank account, then every month, we would divide our expenses for: 

• Preparation for our baby’s arrival
• Hospitalization 
• Confinement 

We only had 9 months to save up, and that’s not enough! 

We also had to cut costs. So I decided that we could do the monthly check-up at a government clinic and have my labour at a private hospital. 

Pregnancy stage cost 

• Pre-natal checkups: RM 200
• Private hospital: RM 15,000++ 
• Pregnancy supplements: RM 500 

For natural birth, it may still be affordable to labour at a private hospital, however, you will need to have at least RM 15,000 in case of an emergency cesarean. Some private hospitals will charge up to RM 20,000! 

In a twist of events, I had some complications nearing my labour – getting Gestational Diabetes Mellitus (GDM) and high blood pressure that needed specialist care. I was immediately warded and safely gave birth at a government hospital. 

However, because of that, we managed to have some extra money for a confinement lady!  

• Confinement care service: RM 2,000 for 2 weeks.

Now let me tell you, baby essentials aren’t cheap! 

As we were first-time parents, we had to discuss what baby items were worth spending big bucks on and what baby items we were okay with buying at affordable prices. 

For example, we decided an RM900 baby mattress wasn’t worth the spend but investing in a breast pump that cost RM500 was a good investment. 

It was a bit overwhelming at first but it worked out once we set our priorities. It was essential for us to determine our priorities as we had other commitments too. 

• Monthly car loans 
• House rent 
• House furnitures 

As we were still newlyweds, we had to not only save money for our pregnancy but we were also saving on furniture like a sofa for our rental home. 

Honestly, our monthly budget has changed 360 degrees since having a kid. In the first 6 months of living together since marriage, we would dine in at restaurants anytime we want or go on an impromptu holiday. I also love collecting branded, luxury handbags. 

But now, all the extra money we make goes into our baby’s savings account. 

The first few years… 

The expenses for a kid will only increase till they reach adulthood. During Aisy’s early baby stage, I used to prepare his meals using organic ingredients, and feed him kids pasta that was made out of vegetables and, biscuits that doesn’t contain artificial colouring and preservatives. 

Guess what, a quarter of our household income is spent on my son!

During the baby/toddler stage: 

We spend an estimated amount of RM 18,000 per year. 

• Formula milk: RM 400 per month
• Baby essentials: RM 550 per month (diapers, clothes, toys and food) 
• Daycare centre: RM 550 per month  

I had to sacrifice my shopping budget because RM 400 (formula milk) is the same amount as what I used to shop at Sephora for makeup. But I didn’t mind it, I felt guilty for not being able to produce my own body’s milk, so I wanted only the best formula milk for Aisy. 

During the preschool stage: 

Education cost, RM 4,800 per year.

• School fees: RM 2,600
• School uniform: RM 200
• School books: RM 200 
• Tuition class: RM 1,800 

Medical cost, RM 3,000 per year. 

• Vitamins: RM 1,200 
• Insurance: RM 1,800

Essential needs cost, RM 4,800 per year.

• Food and drinks 
• Clothes 
• Toiletries 
• Miscellaneous items 

Entertainment/toys cost, RM 2,400 per year. 

With the current economic situation…

I do think it’s a struggle to raise a kid in today’s time. Just recently, there’s been a hike in oil prices, costing up to RM 40 per kg – which is just ridiculous! 

Parents who are earning a household income of RM 6,000 – RM 7,000 will also feel the pinch, what more of those who are earning lesser than that? 

Plus with the many viral infections and epidemics going on, as a parent I would want to send my kid to the best school because I know he’ll be well taken care of in a secured and clean environment. That costs a lot of money! 

Other high expenses that have to be factored in include: 

• Vaccine shots for influenza, chicken pox and more.
• Supplement and extra vitamins.

This takes a toll on our budget. That’s why it’s important to have a strong savings plan. 

Eh, why only ONE kid? 

Today’s generation is completely different than the previous generation, who were able to raise 5 kids. Nowadays, if you have more than one child, you have to be well-off to raise them because it’s definitely not cheap to raise a kid in today’s age!

But having said that, don’t be afraid to have a kid (that’s right – A KID)! Unless you’re able to afford a second child, then go for it.

Hence why it’s essential to do family planning. Our kids deserve better care from us, parents. Why chase to have lots of kids if we can’t provide the best for them? Remember, quality over quantity! 

Especially since we’re living in a pandemic time, and facing an economic crisis, as parents, we have to be smart in planning and budgeting for a better living. 

However, don’t be afraid to not want a child at all out of financial fears. Plan for one and raise that kid the best you can. It’s amazing how kids can change you. Because of Aisy, I’m motivated to improve myself to be a better mother every day. 

Fixed Deposit Alternatives In Msia That You Didn’t Know About

• By CompareHero.my
• July 8, 2022

For a long time now, Fixed Deposits (FD) have been used by Malaysians to save their funds. However, FDs possess an inflexible nature, requiring its users to put in a high deposit and locking in their money for a long time. It also charges a penalty for those who make an early withdrawal.

Therefore, over the past year, more and more flexible alternatives have been innovated in the world of finance. Most of them are regulated by the Security Commission (SC) of Malaysia and allow users to enjoy favourable rates on their savings with a small capital.

In this article, we will be comparing 4 different FD alternatives in Malaysia. Read on to learn more!

1. StashAway Simple

As StashAway Simple says, growing your cash should be simple. Users can save their money with ease through the StashAway app, which happens to be incredibly user-friendly.

The money you save with StashAway Simple will go into its underlying funds, AmIncome Fund. Whether you’re starting up with RM1 or RM100,000, this FD alternative still makes it possible for you to earn the full projected rate.

What’s more, with StashAway Simple, you will be earning stable returns on your cash, so no longer will you need to worry about volatile markets!

2. Versa

Promoting itself as “the alternatives to fixed deposits, but better”, Versa heavily emphasises that its users can earn up to 2.4% per annum, which is on par with conventional FD rates. Since its underlying fund is the Affin Hwang Enhanced Deposit fund, users’ money will be invested in highly liquid and low-risk cash instruments.

It’s also incredibly easy to start saving with Versa – Malaysians aged 18 and above can start saving or investing through Versa from as low as RM1. They can also withdraw their funds anytime without being charged a penalty fee. Also, similar to StashAway Simple, the Versa app is user-friendly too!

3. Touch ‘n Go GO+

With GO+, Malaysians can now save conveniently while earning steadily. All you have to do is cash in your eWallet balance into the GO+ feature on the Touch ‘n Go eWallet app, and you’re set to start earning!

With the Principal e-Cash Fund serving as its underlying fund, this cash management solution allows users to save or invest with a peace of mind.

Further, with GO+, users can make instant withdrawals from their GO+ to their eWallet balance or even use funds in GO+ to make payments. However, users do need to take note of its maximum account balance limit of RM9,500.

4. Kenanga Digital Investing (KDI) Save

Boasting a high payout frequency, KDI Save reflects user earnings on a daily basis, thus allowing users to receive their interest daily on its platform.

Due to its ongoing promotional return rate of 3% p.a. until the end of December 2022 and the fact that it does not charge its users any management fees, the platform has been incredibly popular. Further, with Proprietary Money Market Instruments from Kenanga serving as KDI Save’s underlying funds, users can save with KDI Save without worries of volatility in the market.

To start using KDI Save, users will need to sign up for a KDI account, which will also give you access to KDI Invest.

So, which of these FD alternatives will you be using? Let us know in the comment section!