Positive Financial Habits

Dear all,

As some of you may know, one of my up and coming projects will involve helping ppl manage their money better, irregardless of how much they make.

Here are some check list of positive financial habits that the wealthy practice, and when i say wealthy it does not mean have tonnes of money...it just means u can have passive income more then your expenses. That a topic for another day.
Back to the check list

1) Write down every of your expenses on a daily basis.
Get a small booklet or write it in ur phone/pda. You should do this for at least 3 months to know where your money is goin every month. This will help you achieve 3 things
- know where your money is spend
- budget for the next month
- know your financial standing
After that you would need ur cash flow sheet and balance sheet... This is for another day...
2)Pay urself first...
First thing you do when u get ur pay is put aside some money to save. It does not matter if its just RM50 or RM5000. Its a habit that you have to pick up. My recommendation is 10% of your monthly income. Remember this is savings, means you cannot spend the money.. How much to save and when can i invest?..that a topic for another day....
3)Avoid credit card purchase
if you cant pay it off end of the month. Credit cards can be good if you manage it properly. e.g get extra discounts and points. But if you do not manage it properly it can cause a huge impact on ur financial standing..wait let me rephrase that.. Send you back to MARS or VENUS or where ever you came from....bye bye... If you are already in this situation....having unlimited credit card debts... that a topic for another day...
4) Wait for at least 2 week for major purchase.
This is for all expenses that are more then usual. e.g hp, computer, car, house, or anything above RM1000... This is because you may come to one of these conclusions
- The product is something you dont really need
- You might find a better price for the thing you want
- You might find another product that is of better value.
- Some body might actually give it to you.
5)Review all bills for errors.
This might sounds like you are being cheapskate or something...but really its a practice that most wealthy ppl practice. If you still feel like its being a cheapskate..then just leave a big tip after you find the bill is correct with no errors. Nobody's stopping you.
6) Shop for the best price
This is almost similar to no.4 but its basically means look around for the best deal before getting something that has a monthly repayment. E.g. Getting a loan. Are you getting the best rates or just the first bank you see or what your car/house agent ask you to get?
7) Read one money related article a day. Magazines like Personal Money, Smart Investor are good. If you do not wish to purchase. There are tonnes of free websites on the web. Find a few that you like then add it to your feeds.
8) Limit TV time.
For some of us at this modern time would be to watch less of downloaded movies/ series. If the first thing that you do when you come back is turn on the TV or watch a movie on ur computer. Better change that. I'm not saying that you should just quit all together. Just asking to cut down. You'll be surprised at how much you could do with that time.
9) Shop with a list and stick to it.
Most of us when we want to shop for something, we often come back with more then the thing we wanted to shop for. This does not only apply for girls but guys too. The worse it in a hypermarket. Its arranged in a way that it will look to you as if its so cheap or you sure must get it. Ask those frens you have that works for FMCG type of business.
10)Always be ready to refinance your debts.
For those of you that have loans to pay. Always be ready to change to a lower interest loan. But becareful to calculate properly, sometimes the penalty or the admin charges might not make it worth while. But for those of you with credit card debt..no need to think..just get a balance transfer or a personal loan. Any other bank would gladly give it to you. Dunno what is balance transfer or personal loan? Call any bank and ask them... they would gladly explain to you to. Will talk about the difference between the 2 in another topic.
11) Finish you debts faster
You can start by paying your more expensive debts first. not the bigger debt..(this is also a topic for another day). If you plan to get car for e.g then maybe consider 5 years instead of 7 or 9.
12) Use discounts cards
use discount cards that you can get. This will help you save quite a bit in the long run. And this discount cards is different from those that you chop then after you get 12 chops you can get a free drink. That is a marketing strategy. What i mean is e.g if you shop a lot or buy a lot of books. then popular book store give 10% discount on most of their products including stationaries. Maybe we can come out with a list of where to get all the discount cards available in KL.
13) Don't spend your pay rise
If you already got a pay rise or getting one soon after this year end. Dont spend it. Save it or invest it or pay off your credit card debts. You didn't die last month did you? means you wont die if you dont spend ur pay rise when u get it next month.
14) Eat in, instead of dine out
As much as you can if you have a family, eat at home or cook a meal. It is always cheaper to cook at home when you have more then 2 ppl. Of course you can still dine out occasionally, but you must budget for it. not just spend only.
15) Buy generic, not always branded.
When shopping always choose best value. That means that is worth to buy. It does not mean branded is better. but sometimes it does. So you weight the value of it.
16) Avoid convenient stores
If you can try to stock the basic things that you need from a hypermart. Generally convenient stores are slightly more expensive because of their 24 hour operation.
17) Do what chores you can.
This means if you can wash ur own car, cut ur own grass, do your own laundry. You will realize that you can save or make money. Let me give you and e.g. If you send your car to car wash, you pay an average of RM8. It normally takes them less then 30mins to finish. Try to think of it as this way. If you wash your car, normally it takes you less then 1 hour. You get paid RM8 to do that. Now does that sound better?
18) Budget your expenses
Most ppl dont budget their expenses. Thats why sometimes you hear them say aiya no money, pay never come yet. You should budget ur expenses so that you can know how much you have to spend on each of your expenses. Of course this cannot be done if you dont do No.1. How much to budget for each thing will be discussed another day. I have a file that can help you guys budget. Email me to ask for it.
19) Have a piggy bank for loose change.
Everytime you come back put ur loose change in a piggy bank. It will help you save and it can come out to significant amount. You tot that this was when you were a child when ur mom or dad ask you to do. but sorry..its for you now as well.
20) Dont support KTM
Before you get me wrong. KTM means.. Kuda, Toto and Magnum. If you consistently buy these you know that you will surely loose in the long run. They have calculated the odds and you can never win them. If you are already in the habit of doing this try considering option No.2. Put the money aside to become ur savings. Trust me. This way you will win more..

Thats all for the check list. Here is how i faired.
1) Write down every of your expenses on a daily basis
I did this about a few months back. Now i know how much i spend on each of my expenses every month
2) Pay urself first
I'm doin that. The moment i got my first break..i put my money into an investment vehicle.
3) Avoid credit card purchase
I dun really like to spend using my credit card. But when i need to because of lack of cash. I will go back home then terus use Maybank2u to pay off on that day itself before end of the month.
4) Wait for at least 2 week for major purchase.
Last time i just buy oni anything i like. Now i think twice for every thing i spend.
5) Review all bills for errors.
I dun really review my bills last time. I tot what everla. But now that i learned it has help me to look at other bills as well to make sure i dun get overcharged for or charged for things i did not use.
6) Shop for the best price
I always do this. there is always a better price or try to bargain for a discount. Do you know you can also bargain with a bank. But tat is if you have lotsa money la.
7) Read one money related article a day.
Currently doin that. mostly i go to border to look at the magazines. Its free.
8) Limit TV time.
Last time i used to watch series or movies non stop for hours..Now cutting down la. But still i think this is a major portion that i still need to improve on.
9) Shop with a list and stick to it.
I seldom make a list. Thats why i always over shop in hypermarket. Need to start doin this. I know its a good practice.
10) Always be ready to refinance your debts.
Dont have much debts now. but always still on the look out.
11) Finish you debts faster
This is something which i have just learned a few days back. Still pondering about it. because last time i used to think if you can get better returns then your debts you should invest instead of paying debts. This will be the question that i will ask God for the next few weeks.
12) Use discounts cards
I dont really have much discount cards.Cos always tot it is leceh to carry to many cards. But now tryin to improve on this.
13) Don't spend your pay rise
Dun really have pay rise... but yes i learned the key to being wealthy is to maintain ur lifestyle even though you have more money now in ur pocket.
14) Eat in, instead of dine out
you be surprised how much u save when you eat in. There was a time when i really was broke. I had to eat at home everyday and cook. That was the only way to spend less on food.
15) Buy generic, not always branded.
Yeah, value for money is the thing i'm looking for. I bought a dockers pants for RM199, I wore it every week for almost 2 years. This was probably the most worn pants in my life and also the most expensive. It was worth the brand. On the other hand i just saw a pants in a warehouse sale a few weeks back, now alternating with my dockers pants. I got it for only RM39, it was not a branded but it was good quality. It did not even have a tag. i dun even know wat brand. so yeah. quality and value vs brand.
16) Avoid convenient stores
Tryin to do this part. Sometimes i forget. But need to remember No.9 if not sure overbuy in the hypermart.
17) Do what chores you can.
This is probably my weakest. Tryin really hard to achive this or to do this. neeed to was my own car and cut my own grass.
18) Budget your expenses
I normally do that but sometimes i forget. Need to remember to budget. And also after budgeting. STICK TO IT. dun touch my savings. still need much improvement.
19) Have a piggy bank for loose change.
Wah...This really saved my life. Some of you may know i was really really really broke a few months back. That time i was so thankful that i had my piggy bank. well it is not a piggy just a clear container but still. The coins inside was enuff for me to survive for almost 2 weeks or more.
20) Dont support KTM
Last time i always tot that if i win 3 million buying lottery no need to work already. But now i know 2 things
- Most older ppl always say this. There is no shortcut to success. Need to work not just only smart but hard too.
- If i never learn to manage RM100 then RM1000 then RM10000 and so on. I will never manage RM3 million. Ask yourself If i give you RM1 million today. What would you do? I bet you within less then 3 years everything is gone and you are back to where you are today.

Thats all for now..

Forward this to 3 frens so see where they stand now. Hope this will really help ppl.

Credits to Mr. Karthigesu for this.