Paying Yourself First

Procrastination, as per my previous post, is the number 1 factor why we Malaysians or even the world fail to ever reach our financial goal. The excuses are always the same and here are some of the most frequent excuses I have heard.

• I'll save after I reward myself with my pay.
• After I get my new phone/car/clothes/computer/console
• I don't have enough money!
• I'll start saving after my promotion.
• Save so much for what?! Cannot take to the grave also! Enjoy life first larh!

Yes believe me, I've heard the last one with my very own ears before.

What do all these have in common? Procrastination. It's always after I get this, after this happens, after after after after. This is the reason why I am a firm believer in paying yourself first! If you hate budgeting like me, this is the best method of saving you can follow.

Now what is paying yourself first? It basically means setting aside a set amount of money each time your pay comes in. The main reason why most people fail to consistently save is because every time their pay comes in, they spend it in paying off credit card debts, all the bills, loans etc. By the end of the day, you are left with nothing! Saying that your pay is too low to start saving is pure BS. Start saving even 50 per month is better than nothing. Just like the advice given my experts in how to achieve your goal, you must always take small little steps and if you really feel your pay is too low, start with 50.

Here are a few simple common steps on how you can start this habit going:

1. Start a new savings account where you swear upon yourself to never touch it unless it is a real emergency. No, buying a dress just because its on sale and it is a one time deal only is not an emergency for all you drama queens out there.
2. Start small. Like for example 50 per month. The most common excuse I've heard when given this advice is that how much can 50 bucks help me. See THAT'S the problem, people have one thousand and one excuses on why they shouldn't save.
3. Once you have this habit going, slowly increase the amount to say 100 bucks or more.

For those of you that want to go one step further, what you can do is actually to keep track of your spending to see how much money you REALLY need per month. Yes, focus on the word really. Most of us don't need to have that extra Starbucks everyday, or that expensive meal. Once you have estimated how much you roughly need to survive each month, start putting in that amount in your new savings account straight away once you get your pay!

If you are like me and hate keeping track of your spending every single day, just do it for a few months to get a more accurate estimation of your spending, and once you managed to save that amount consistently over a few months, you can stop keeping track of your spending. Do note that I do revisit this method every once in a while when I notice that I'm spending more than I should.

So, to get your finance on track, always remember to Pay Yourself First and not end up like the woman in the picture below.

Taken from: http://allfinanceupdates.blogspot.com/2012/07/pay-yourself-first-savings-tips-and.html

Procrastination

Procrastination. We've all heard it and do it and it plays a really huge role in how fast you can reach your financial target. But more on that later.

The main reason I came up with this title is to address an attitude that I have. When I first decided to start blogging about my financial journey, I've actually set out a target to write a post at least twice a week. But I have procrastinated again and again after my first 3 post. And in order to improve, be it career, investment, savings or life in general, I really need to get rid of this habit.

Now back to how does this relate to investing or saving? It determines how fast you will eventually reach your financial target. We have all heard about the overly preached phrase that " Compounding interest is the 8th wonder of the world " stated by Einstein himself.

Read any financial book on investment and saving and they will tell you this exact same thing. That saving and investing starts now! The later you start, the longer and more difficult it is to reach financial freedom!

Now why is it people my age still don't get this? One gets a new job and he gets a new phone. After the first promotion, a new PC. Then comes a car. Then if we're lucky, that person finally decides to get a house.

I'm not saying that we shouldn't enjoy life, but there are many other better ways to spend our hard earned money other than to spend it on gadgets and items that only depreciates through time.

I guess I was lucky enough that my parents didn't always give me what I wanted when I was young and had to save my own money to get it. I believe this is part of why I started saying early.

Anyways, saving is just the first step and there are many more that we would need to take in order to reach our goal and I will cover that in the future. But for now, please, don't procrastinate and start to save!

What Is Financial Freedom?

Before I start, let me briefly talk about the current book I'm reading. It's called "What Your School Never Taught You About MONEY". It's written by a Singaporean, so although it is a bridge apart from Malaysia, what I have read so far is pretty practical even for a Malaysian and contains many good advice and quotes.

So back to the topic at hand, what is financial freedom? The best definition I've read so far came from the previous book that I was reading by Yap Ming Hooi. He mentioned that financial free mean different things to different people which is why, financial freedom is whatever target you have set for yourself financially.

In his book, what he focus on mainly was that how much you will need to sustain your life after retirement and for how long. But as for people like me, who has just started working not too long ago( although 2 years does seem like a long time), retirement is still pretty far from my mind, I have personally set certain target I would like to achieve within the next 5 to 10 years, which ultimately in return help to achieve my dream. Which is to be financially free!

So, what is financial freedom to you? This is a really good point to ponder.

Keeping Track of Your Finances

I've just finished a new book lately titled "The Road Map to Financial Freedom". The book is about 200 pages but focuses mainly on one thing, creating a road map to financial freedom. And it repeats over and over again based on the different clients that he has had.

Although very repetitive, I believe that it has one key point that is really important that I have yet to follow properly, which is to keep track of your finances, like your savings, spending, investment etc. To tell you the truth, I've stopped keeping track of my spending quite long ago when I roughly figure out how much I roughly need to spend and how much I can save per month. But I noticed that I have been over spending a bit lately which is why I'm back at keeping track of my spending. But the next important thing I will need to do is to keep track of my investments, which I never ever did do before. At most, all I do everyday is to click on my portfolio to see how my stocks are doing, and that's about it. I do not have a single clue, what my actual returns are.

I do believe that creating a road map is important in achieving financial freedom, but I will have the take the next step, besides figuring out how much I spend, which is to keep track of my investments and how they are performing.

I do believe that with this small step, everyone will be one step closer to achieve financial freedom. What is financial freedom? Perhaps I will cover this in my next topic to whoever my readers are. If there are any at all :)

Hi!

It's been a really long while since I last blogged. Also my previous blog was meant more as a comedy blog. However, after being in the working word for more than 2 years, I've decided to start blogging again! This time however, on a much more serious note about work, life, and most importantly, saving and investing.

I was sold the idea not too long ago about achieving financial freedom and this blog will be mainly about my journey towards financial freedom and tips on savings and investing as well as how to achieve that.

As I'm still fairly new to this, feel free to join me in this long journey on learning and discovering different investment techniques, or money tips and hopefully to reach the ultimate goal. To be financially free!