Spend guide for Malaysians: Do you have an extra RM1,000 but not sure what you can actually do with it? You can either indulge or spend it the right way and get some benefits. We gathered 10 best ways on how and where you can spend the money.
What would you do if you had an extra RM1,000 in your pocket?
While it would be tempting to get yourself that pair of NMDs you’ve always wanted, or maybe even bring your partner out for a nice omakase dinner, there are better and smarter ways to make use of this money.
Here are 10 suggestions:
1. Pay off existing debt
If you have existing debt, it would be a good idea to take this RM1000 to clear all, if not some of it.
It would be wise to prioritise the debt that has the highest interest rate. Credit cards come with a notoriously high interest rate of 15%, and this can actually increase up to 18% if you don’t start paying back your owing!
And if you opted in for the moratorium, now would be a good time to start kickstarting your repayment. Of course, with RM1,000 there possibly could be very little that you can clear… but your debt would still be RM1,000 less than what it used to be.
2. Add to your emergency fund
If there’s one thing that COVID-19 taught us, is that we never quite know what the future holds. So if you can’t predict the next crisis, it’s best to prepare for it.
Why not deposit that RM1,000 into your emergency fund? Speaking of which, it would be healthy to have a buffer that will last you for at least six months if you were to lose your income unexpectedly.
Remember, your savings and your emergency fund should be two separate things. Keep your savings account for your long term goals! When life throws you lemons, you should use the former, not the latter. Not every bank has an option to separate your saving goals, so if necessary, you could always consider opening another savings account in a separate bank to build your emergency stash.
3. Put into your retirement savings
Did you know that our retirement fund (EPF/KWSP) is actually known to have a pretty attractive dividend rate? Though it goes up and down, many choose to park their cash with EPF for a slow and steady growth.
To be fair, 2019 didn’t yield the best rate (5.45% for conventional and 5% for Shariah accounts), and you can roughly expect how COVID-19 will impact 2020’s rate... but it’s still a lot better than Fixed Deposit rates.
You can easily add to your EPF account through:
- Internet banking (Online transfers through Maybank, Public Bank, CIMB, Kuwait Finance House, RHB Bank, Bank Muamalat)
- Bank Agent Counters (Cash/cheque through BSN, Maybank, Public Bank, RHB Bank)
- Registered Bank Agents (BSN)
- EPF Counters (cheques accepted, but if you’re giving cash, they’ll only accept a maximum of RM500)
Just take note that it may take up to 14 working days before your contribution is reflected in your statement. There is no minimum contribution, but you can only transfer a maximum of RM60,000 per year.
And of course, since this is for your retirement fund, expect to only be able to withdraw in your golden years.
4. Protect yourself with a personal insurance
Accidents happen, and when they do, they can oftentimes leave a huge hole in our wallet. That’s precisely why insurance companies exist - to sell us protection during troubling, uncertain times.
While there are many different insurance plans and categories, medical and personal accident policies are the most common, and for good reason too. Although Malaysians get almost-free and world-class healthcare treatments (can be as low as RM1!), we almost always will have to wait for hours, days, weeks, months, maybe even years before we get an appointment.
That’s why many opt for private hospitals, even though they can cost a bomb. If you’re familiar with how medical insurance policies work, you’ll know that they can cover a range of costs in these places.
So if you have some money to spare, it wouldn’t be a bad idea to consider getting yourself covered with an insurance policy.
5. Get a credit check and protection
The best thing that you can do for your financial health is to always keep track of it. Many Malaysians are not familiar with credit scores, but this three-digit score is actually the most important digits of our lives.
On top of that, many don’t proactively keep their personal information safe. This puts them at risk, as fraudsters are always ready to pounce on unsuspecting victims.
It will only take a fraction of RM1,000 (Less than RM100 a year from CTOS, last we checked) to check your credit score WHILE getting protected at the same time. This subscription gives you protection and alerts when your personal information and data gets leaked on the dark web, information on new credit applications and account closures under your name, as well as a change of your address and contact information.
It also gives you four MyCTOS credit score reports yearly, and alerts you for missing payments. (FYI missing payments can severely affect your credit score!) On top of that, you can also get fraud and Takaful coverage.
Read also: Ultimate Guide to Credit Scores
6. Upskill yourself
Sometimes, the best investment you can make is on yourself. You could be looking to do your MBA, or simply trying to learn a new course to upskill yourself. If you’re unable to get a scholarship for your course, you could consider taking up a loan to help you improve yourself.
In any case, investing in yourself is always the best thing to do. (Provided you actually put into practice what you’ve learned.) At the end, you’re only adding more value to yourself, which may make you a more attractive candidate to your future employers.
7. Invest your money
Ever wanted to start investing, but never had huge capital? Investing can be scary, especially in this climate… but it’s not necessarily inaccessible.
To make this easy for first-time or small-time investors, more and more companies are coming up with ways for people to invest even as little as RM100. To add to that, peer-to-peer lending models are also getting popular. If you’re not familiar, it’s basically crowdfunding your peers.
Of course, investing comes with its own risk, so do your research before jumping into anything.
8. Get healthier
The smartest way to use your money is to do something that will ultimately benefit you. Your body will thank you for putting your health first!
While you don’t actually need to spend money to get healthy (e.g. getting a monthly gym membership when you can actually go for a run in the park for free), you can use this money for a health checkup and catch warning signs before they become full-fledged issues.
With RM1,000, you can also invest in equipment - such as a treadmill or a glucose checker - that can help you in your journey to attaining better health.
9. Fix up your car
If you rely heavily on your car to get you from A to B, it’s important that you keep it in tip-top condition so that it doesn’t give way and cause you inconvenience. (Inb4 Murphy’s Law!) Plus, it’s also a matter of life and death - you definitely DON’T want to risk your life - and the lives of other road users - by saving a few hundred bucks.
With this extra RM1,000, it would be a good idea to change your tyres if they’re getting smoother than M.J. on the dance floor. Fix your brakes if they don’t work well, sort out your air conditioning and your power windows… do what you need to so you can have a safer, more comfortable drive every day.
10. Give it away
Give… it… away?! How on earth is that supposed to be smart?
It’s not because giving donations can come with tax benefits, but donations to the needy can really help rebuild lives. If you have an extra RM1,000 to spend, it would be great to put in some thought into how best to spend it. While you can use it to benefit your life in the ways we suggested above, you can also use it to enrich the lives of others.