Do you know?
"According to AKPK statistics, 70% of Malaysians aged 35 - 45 have been declared bankrupt due to failure to repay debts."
According to statistics, 1/5 of Malaysians have not saved money in the last six months.
When it comes to the issue of readiness and ability of Malaysians in the event of the loss of their main source of income, only 24% can survive up to 3 months and only 10% are confident of surviving up to 6 months depending on savings.
Reports also say most rural and urban households have no savings.
As such, no matter if you are high or low income, living in urban or rural areas, you also have the potential to be in the group mentioned above if you do not manage your finances wisely. Let's get ready by setting up a financial security plan now!
"Practice the 30:10 financial management formula especially if you are just stepping into the world of work."
The majority believe, if a person is high income, it is a bonus because it guarantees financial stability. If finances are managed wisely, chances are you will enjoy stable finances. Practice the 30:10 financial management formula especially if you are just stepping into the world of work. Income is divided by division:
30% - savings, investments & protection;
30% - debt & expense savings;
30% - expenses; and
10% - purification of property, for example zakat.
You can enjoy stable finances if you control your finances rationally. That is why Islam encourages moderation and prudence in managing expenses. Hadith from Abu Darda Radhiallahu Anhu states that the Prophet SAW said: "From the wisdom of a man is his prudent attitude in the affairs of life" - Narrated by Ahmad.
Therefore, improve spending and practice a lifestyle according to ability. Reduce non -essential expenses so that finances are secured no matter what income is earned.
"Controlled spending will prevent you from spending beyond your means."
What are the factors that make a person so in debt that he cannot enjoy financial freedom despite having a high income? How can a person enjoy financial security with a medium or low income? The formula - Control Spending!
Controlled spending will prevent you from spending beyond your means. If you spend excessively, the amount of money in hand will decrease. As a result, the surplus money that can be used to invest will shrink. Accumulating debt also adds to the inconvenience that can cause you to feel anxious when thinking about financial losses. The loss in question is the occurrence of something that results in a lack of income; rising cost of living, rising taxes and so on. When you feel insecure with your own financial position, it will trigger fear and stress.
Financial security is the peace of mind enjoyed when you have enough funds to get on with life without feeling anxious if forced to deal with an emergency situation. When you feel ‘safe’ financially, you will not be stressed and can focus on other things. So, no matter you are high, medium or low income, if you equip yourself with financial security, you can enjoy peace of mind. Follow these 6 steps to help you prepare for financial security:
Control credit card usage
Credit cards encourage additional spending. Without proper discipline, it will lead to a pile of debt, stress and anxiety.
Prepare an emergency fund
Create a safety net in case of an emergency. At least you’re prepared if it’s needed. It’s hard to stabilize finances if you have debt. Keep some money in the bank as a first step of financial security.
Settle the debt
Settle debts systematically. List all debts from smallest to largest - by balance. Settle the first small debt first. When done, continue with the second small debt and so on until you are debt free.
Spend within your means
Spending at will only gives temporary satisfaction. Teach yourself not to overspend so that your finances are more stable.
Invest 15% of income after debt free
Increase wealth by generating additional income (if necessary) before retiring or achieving planned financial goals.
Join takaful
Get a long -term life takaful plan, health, home vehicle for financial loss risk coverage.
In conclusion, no matter how high or low income you earn, you can equip yourself with financial security if you know how to manage it since you started working. Practice good finances in preparation for a peaceful future. Remember! Plan and discipline yourself to get the financial security you dream of before it’s too late.
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BUSINESS & MONEY
