Saving tips

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THE rule of thumb when it comes to saving is of course to make sacrifices and put the dough away for things that you really want — a dream holiday, a sporty car or even a fancy wedding. Saving also goes a long way in making sure you have cash when it comes to emergencies such as a medical crisis or the need to replace an expensive but essential household item. But come April, Malaysians are bracing themselves for price hikes with the implementation of the goods and services tax (GST).

Based on an article found on the America Saves website, ‘live it!’ brings you some applicable tips on how to do things differently and save, instead of breaking the bank.

  • Keep the loose change. Putting aside 50 sen a day over the course of a year will allow you to save close to 40% (RM182.50) of a RM500 emergency fund.  
     
  • Avoid impulse buys of expensive items. Take 24 hours to think over the purchase. Acting on this principle may result in fewer regrets and more money for the things you really need.
     
  • Have a budget. For a more effective way to establish a budget, get receipts for all your purchases from the beginning of a new month. Review them at the end of each month so you can have a clear idea of your spending habits.
     
  • Compartmentalise your spending. Put monthly expenditures for food, entertainment and supplies in different envelopes to track spending limits. This will help avoid buying unnecessary goods and remaining monies can be saved.
     
  • Be sure a buy is worthwhile. If you fancy a new item, take note of its cost and factor it into your hourly income. For example, is the RM50 pair of shoes worth the eight long hours at work if you make RM10 an hour? Breaking things down like this helps keep your spending in perspective.
     
  • Substitute artisan coffee with normal coffee. In doing this, if you saved the RM14 you normally spend at a coffee outlet, you would have enough for a RM500 emergency fund in just 36 days.  And let’s be honest — a good hot cup of Kopi-O that typically cost RM2 or less in the Klang Valley will do the trick just fine.
     
  • Stick to the automated teller machines (ATMs) of your bank. Using another financial institution’s ATM once a week could cost you RM1 for local banks or RM4 for international banks — for each withdrawal. That’s a total of RM52 or RM208 annually. The other alternative is to withdraw a larger sum of money so you don’t have to go to the ATM so often.
     
  • Keep your car engine tuned and tires inflated to their proper pressure. It could save you on fuel and hundreds of ringgit for new wheels. Also, avoid fast start-ups and stops. Good and courteous driving habits save on wear and tear of the vehicle as well as fuel costs.  
     
  • Buy cheap when you can. If you really can’t help yourself, let the discount racks be your first stop at a shopping outlet. And take advantage of seasonal sales like the ones before Chinese New Year and Hari Raya, year-end sales and the 1Malaysia Mega Sale Carnival.
     
  • Plan gift-giving in advance. In addition to finding thoughtful but less expensive gifts, you will have the opportunity to look around for sales and decide on how you would need to spend and survive for the rest of the month.
     
  • Mind the mobile phone. Since you can’t leave home without it, make a point to understand mobile phone usage and charges. Make sure the plan you subscribe to suits your needs and take note of peak-hour charges and data plans, and understand how you can make the most of them.

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This article first appeared in The Edge Financial Daily, on March 3, 2015.