It is good to have savings, for example when an emergency occurs because they do occur in everybody’s life sometimes. And it is a really good feeling to watch your savings grow when you are saving for something that you really want, such as a house or an overseas trip. While we know that having savings is a great feeling, but still most of us don’t do it. So why are Malaysians so bad at saving? If you feel like you are one of them, read on.
1. We don’t have a monthly budget
We haven't thought about how much we earn, how much we spend and how much disposable income we have. If we knew how much all our expenses were, we could plan how much we have available for spending.
2. We use our credit card too much
A credit card is the easiest way to go broke and stay broke. First we spend money we don’t have. Then we pay a lot of interest every month because we can’t afford to pay the total bill.
3. Shopping with e-wallet
It used to be we’d go to the mall with RM200 in our wallet and when the money was finished we’d have to go home. But now we can access our money so easily. Even if we don’t have a credit card, we could use our debit card or e-wallet to pay for something without cash. It means that our whole salary (bank account) is in our pocket all the time! The temptation to spend cannot be resisted just by looking at our empty wallet.
4. Impulsive buying
When we see something nice, we tell ourselves we deserve it. We don’t think about whether we need the product, or weigh up the benefits versus the cost.
5. We try to impress others
This is so common, and of course everyone wants to look good. We can’t resist buying fashion items: shoes, bags and scarves and we love to buy brand name items. Other people buy gadgets
6. No savings plan or goal
Saving is boring and hard work. We need to have an incentive to stop spending. Normally, to force ourselves to save we have to set a goal to save for something worthwhile that we really want e.g a house, a car, or a trip.
7. Internet and phone bill
At least for young and single people, the phone bill may be one of the biggest expenses, but it is also one where we have a lot of choices to save money if we try. We may be using the wrong plan. Most of us are spending a lot on data plans, so we should look for a new and better plan. If we stick to the same plan, we will find the benefits less attractive over time.
8. The phone itself
We want an expensive phone and we change our phones too often. We could choose to buy a mid-range phone instead which has almost all of the same features, because many of the features we don’t use anyway. Sometimes we were careless and broke the phone so we had to get a new one.
9. Too much food and coffee
Food is necessary and we Malaysians love food. But maybe we overspent on trendy food. We also bought food which we can make at home easily, such as convenience foods like spice paste and cake mix. Many Malaysians are coffee lovers and sometimes we would buy from those expensive cafes at over RM15 per cup!
10. Our salary is not enough
It sounds like a joke, but this is the truth. We can't save because we don't earn enough. It’s a fact that salaries in Malaysia are generally too low. We have two choices: either we dial up our salary or dial down our lifestyle.
11. Spending before saving
We always feels that we will save whatever is left at the end of the month. But for the majority of Malaysians, there wasn’t anything left. Saving should come first. When we get our salary, we could set aside 2% - 10% for savings. The best way is to set up an automatic payment to Tabung Haji or some other investment fund.