You’ve experienced it: Halfway through the month, you decide to check your spending – and you’re surprised: “Where did I spend my money ah?” It’s very likely a lazy habit that’s costing you money. Be it you’re being a complete sloth in managing your budget or just not putting effort into your savings; it could be anything. You might find one of these 14 habits very familiar.
“Do not save what is left after spending, but spend what is left after saving.” – Warren Buffet
Not paying yourself when salary comes in
The ideal way to spend your money is to pay yourself first. Always set aside a portion of your monthly earnings before you spend, not the other way around! To make sure this is consistent and efficient, you can automate your savings by setting up a monthly recurring transaction with your bank account to transfer a specific amount to another account (yours, hopefully).
This will ensure that you always pay yourself first. Don’t forget to check and compare the interest rates of savings accounts with other banks to ensure you are getting the highest return for your savings. Make sure the interest rate is higher than or matches the current inflation rate, at the very least.
Tip: Try to save at least 20% of your salary every month.
Being lazy to educate yourself on personal finance
At the very least, it is key to place a priority on setting your own budget and to know exactly what each transaction you make is. While that may seem like common sense, financial literacy is not common among the adults of up to 143 countries, including Malaysia, according to an S&P Global Financial Literacy survey. You can learn about personal finance by reading financial blogs (like ours or RinggitOhRinggit) or even books like Rich Dad, Poor Dad, by Robert Kiyosaki; Think and Grow Rich, by Napoleon Hill; and The Richest Man in Babylon, by George Samuel Clason.
It’s also wise to take note of financial news in the newspapers or on TV.
Not using the right credit cards
Credit cards can seem like a bad thing to have, but they’re useful. Use it right and you’ll be able to receive a lot of benefits. For example, you can receive cashback when you spend with a credit card or even earn redeemable reward points. However, remember that having a credit doesn’t mean that you have unlimited money to spend.
Tip: Remember, what you spend with your credit card will need to be paid back! It’s not free money.
Not tracking your expenses
Efficient financial planning will become even better if you track your expenses consistently. This can help you track unnecessary spending and to help plan which spending can be cut down.
You can use a money tracking app like MoneyLover. Take control of your expenses and start cutting out the impulsive expenses.
Not packing your own lunch to work
Eating your own packed lunch is a great way to save half of your expenses on food every month. Imagine paying as much as RM200 monthly compared to just RM100 per month if you bring your own lunch half the time! Not only that but preparing your own meals is also healthier; you can be healthy and save money at the same time.
Not having a fun jar
A fun jar is a smart way to allocate money for fun things! You can set aside some money each time by putting it into a fun jar (whether real or virtual) and then using that money to spend on the fun things in life. This can help curb overspending and it keeps your spending in check with only a fixed sum to spend. You can also setup fun jars for other spending too, such as snacks or clothing. These fun jars help to keep an eye on our expenses and our budget.
Leaving deadlines to the last minute
Missing payments or making late payments for your credit cards, loans, or taxes will cost you a lot of fines and penalties. Credit card interest, for example, can be as high as 18% on outstanding balances! This can be avoided by making payments on-time and settling your tax filing earlier before the deadlines to avoid these extra charges in the filing process.
Hoarding your unwanted items
Holding on to old and unused belongings will give you nothing, but if you sell them off, you can get cash! By selling these old unused items on online platforms like Carousel or Mudah.my, you can earn extra money and put your preloved items to good use. Try to let go of the sentimental value (well, keep one or two) and give your savings a boost.
Being lazy with your debt repayments
Being late with your debt repayments is not a matter to be taken lightly. Bear in mind that you will be charged a higher interest rate for the late repayments and a late fee, which is wasting your money. If you have issues with managing your debts, do visit your bank and discuss with them to reschedule your repayments according to your capability. Banks can be very helpful in rearranging your payment schedule to avoid the cost of non-performing loans. When all else fails (and we hope you don’t come to this point), you may also approach AKPK to get help with managing your debts
Not comparing prices
Who says that window shopping is a waste of time? While it may take slightly longer than usual, but comparing prices of items like clothing or groceries in different locations might help you save a lot. In fact, you don’t even have to leave your homes to check prices these days, you can use apps that show you prices in different stores for you such as, SmartShopper, Hargapedia, or PriceCartcher (by KPDNHEP).
Not maintaining your car
Car maintenance is something a lot of us take for granted. Delaying your car’s maintenance may cause you a lot of problems in the long run as things break down and wear out. It is important to ensure regular oil changes, air filter changes, sparkplug replacements, and other upkeep that will improve the efficiency of your vehicle. Adhere to your car’s servicing schedule and don’t skip a service! You don’t want your car to breakdown because of one small mistake.
Not paying attention to your credit score
An unhealthy credit score can cost you a lot if unchecked. A bad credit score is evidence of your negative financial habits and poor financial management. This can lead the creditors to perceive you as a high-risk applicant. It’s a good idea to check your credit score every now and then. You can do so with a consultation of your credit score from CTOS, a credit agency that helps Malaysians to attain better financial health (https://www.ctoscredit.com.my).
Not getting medically checked
Self-health, either physically or mentally, is the most essential than anything. Always keep yourself in tip-top shape. Pay attention to any symptoms and do frequent check-ups to ensure you are healthy on the inside and outside. Should the unfortunate happen, and you get stuck with a large medical bill, getting yourself covered with medical insurance should be a priority.
Not checking your credit card statement
Keeping track of your credit card statement is vital to check for any fraudulent activities conducted using your credit card. Another reason is to check for extra costs charged on you should you have forgotten to cancel any packages or free trials that you previously signed up for. Being extra attentive to your credit card statement will help you identify whether you’ve spent too much and to manage your budget planning for certain categories.