A recent survey by Citibank revealed some scary facts – That Malaysians do not save enough and many do not have enough to buffer them in the event of a job retrenchment!
According to the latest findings from Citi’s Financial Quotient (Fin-Q) 2008 survey, only two in five (39%) Malaysians actually save and less than one-in-three (28%) make and stick to a monthly budget.
In the event of a job loss but with continued regular expenses, one-in-five indicated their savings would last for only four weeks. On average, Malaysians reported having 11 weeks of savings in reserve. (source)
It is scary statistics indeed especially with job retrenchments looming and Asia set to lose 23 million jobs. So, beat the statistics with these great saving tips!
Set A Monthly Budget
Sit down and draw up a monthly budget. If you are married, sit with your spouse and discuss together how you should spend your monthly expenses. Planning is one, execution is another and you have to discipline yourselves to stick to your financial plans.
Pay Yourself First
Your budget should always include payment to yourself. It is a form of forced savings and a prudent target to begin with is at least 10% of your take-home salary. However, do try to increase this savings as your salary and expenditure adjusts.
Teach Children To Save
Start your children on the savings path from an early age with these tips to teach your children to save. Make it an enjoyable family event and you will have given them one of life’s best financial lessons.
Don’t give up on saving. Sometimes some months may be a little tight due to high insurance payments or unexpected events. Try to save whatever little you can and make up for it in the following months. Every little bit helps.
Spend Your Bonus Wisely
Bonuses now are far and few in between with many companies cutting costs and laying off staff. However, if you are lucky to get one, spend it wisely by saving and investing. Of course you should still reward yourself with a small portion of it but do save most of it to build up your emergency funds.
Previously, employees were advised to keep at least 3 months of their salary in cash to provide a sufficient buffer in the event of layoffs. Today, with inflation on the rise and the economic crisis, it will be wise to have at least 6 to 8 months buffer in cash to ensure you can ride out this storm.
Remember, it isn’t about how much you earn but how much you can save.