You recently finished your first degree and among the feelings that you have is that you are going out in the world and you feel as if you are ready to take it on. No matter what you do or plan to do, you must always bear in mind the importance of financial management because a wrong step could mean a long term problem which will be very hard to solve later in life. The truth is that no one teach you about financial management in university or college, not even those who major in finance and accounting. The real world can be very cruel if you are not careful with your money. There is no way to mater this instantly so its best that you follow some tips from our experts.
You might start with a meager salary or a high-paying one. However much you get paid, remember that you need to practice self-control. This is a very difficult skill which requires practice. If you can, wait until you have the cash before buying something you like. Don’t buy into the future. Credit Cards would be a totally different issue that will be talked about in other articles
Take note that if you are not in control of your own finances, then there will be people who will. In fact, if you are a rich person, chances are there are people who will want to manage your money where they might not have your best interests at heart.
In whatever circumstances, NEVER EVER make a habit of purchasing everything on credit cards because once you start, it will continue for the next 10 years at least.
The rule of thumb is to be aware of where you money is going. If you earn RM2,000, take note of where each sen goes to and with that you will be able to make a budget of what to do the following months.
Always keep an amount away for rainy days. No doubt you have commitments and loans to pay off but it would be wise to start an account which is totally dedicated for ‘rainy days’. Accumulate this monthly and you will have a substantial amount when emergency arises.
Yes, you might be starting out in the world and landing in your first job so what’s the point of talking about retirement. After all, they have the EPF (Employees’ Provident Fund) to take care of me when I am old enough to retire. A simple and quick calculation will tell you that EPF will not be sufficient. So start saving now. The good thing about starting early is that you need not save a lot now and start to build your own fund as you earn more later in life.
No one is asking you to try and cheat the system. Income tax must be paid and there are many provisions to help you pay less. Get to know the tax relief provisions by the government and you need not be paying too much in taxes each year.
Investments are very attractive and many would tell you to put your money in shares, foreign exchange and things like that. If you are not comfortable, then don’t invest. However, make sure that you invest in health insurance, unit trust and such which are longer term and more beneficial. These are vital investment methods which will help you in the future.
The best thing that you can do is try not to get into debts through credit cards and personal loans. No doubt they are enticing. Credit cards will burden you in the future. If you can use cash, use cash, avoid credit by all means, unless it is absolutely, definitely necessary.