Banker's Thoughts

Landing a job is becoming harder than ever. Most people have high expectations and requirements on their job selection. Some expecting to get into MNC, some expecting to able to travel around, some hoping to earn RM3K a month... the worst one... some hoping to have all the BENEFIT...

I have a friend, Ms A, who was once unemployed for one year since graduation due to her naivety, has now settling in a less expected job with just RM1.5K per month. I recognized the importance of landing a high pay job to live in the cities nowadays. However, the economy has forced people to be more down-to-earth to get a relatively low pay job to sustain their livings. Earning a little pay or being unemployed?

JUST FACE THE FACT!

It is better to have a secured job than stay unemployed and keep asking pocket money from your parents. Life must continue... every month you will be happily receive your salary in the early month but I bet usually it won't last for 2 or 3 weeks. Most probably, you will stay at home on the 4th week....doing nothing...because everything you wanna do (or plan to do) will incur additional costs.

WHAT SHOULD YOU DO??

Let me share with you some effective ways to continue your livings...

1) START SAVINGS

Some must think it sounds CRAZY... since the current income they earned is insufficient for their day-to-day livings. But it is even more IRRATIONAL if you continue to work and do not save. WHY? Imagine you continue to work-and-spend it all attitude... Where will you be after 5 or 10 years? Are you moving forward in your life? Think wisely.

How do I save? How much do I need to save?

You can start savings now. I advise you to start as soon as possible. The earlier you start, the faster you adapt on your savings habit. You can start to save as little as RM100. I would advise you to save at least 10 percent of your salary. If you can save more then it will be better for your future. Another way is to increase your savings every month. You can save RM100 for 1st month and increase to RM110 the following month and so on.

You have to take note that the money you save is for your future. Not to buy your favourite handbag or latest mobile phone. This savings fund is non-touchable. You can consider opening a separate bank account for your savings. Ensure the bank account do not have an ATM facility. The harder for you to access the money the better. Do not delay your savings. Bank in the money to the account on the day you receive your salary. ALWAYS PAY YOURSELF FIRST! Or you can consider asking someone you trust to help you save. Is either your parents or your wife/girlfriend (somehow girls manage finance better). If you do not save, you will be in big trouble. Imagine on one unlucky day, your boss decided to terminate your service immediately due to bad economy, what will happen to you?


2) SLOW SPENDING

You know how much you are earning every month. How? You got your payslip stating your basic salary and deduction of EPF. Then you will got your net income credited into your account. Correct? However, how much is your spending? Yeah... You can always assume your monthly expenses and expect there is something left in your wallet or purse by end of the month. But generally it won't happen. Why?

As you can see, when something monetary is in black and white (payslip), people tend to notice and pay more attention about it. As for spending, people tend to be ignorant and less calculative. They can hardly see the big picture of their spending.

Assume Mr. A is earning net income of RM2K per month. He enjoys drinking on happy hour and spends RM15 everyday. For a month, he is spending RM450 (RM15 X 30 days) for happy hour. This is amounted to 22.5% of his earning. Spending RM15 daily might look small but it is drying your wallet day by day. How do you overcome the problem?

Firstly, you must learn and understand your spending pattern. Before the day you receive your pay, prepare a projected monthly expenses. Then you can start to jot down all your daily expenses which include your meals, tolls, parking, petrol and etc. By end of the month, you need to compile your monthly expenses and compared with your budgeted spending to have a clearer picture of your spending.

"REMEMBER WHEN THINGS ARE IN BLACK AND WHITE PEOPLE TEND TO NOTICE IT"

The next step require you to breakdown your category of spending whether you can try to eliminate or reduce it on the following month. For instance, mortgage and insurance payment is fixed and payable every month. This category neither can be eliminated nor reduced. On the other hand, expenses that you have controlled on such as entertainment can be reduced or eliminated if you want to. Try to take control on your variable spending. Slowdown your spending. Change from spending for happy hour daily to every 2 days once. By doing so, you will significantly see a boost in your income immediately by end of the month.

Treat yourself as a company. Be responsible and manage your cash flow. Imagine a big company foes not take control on its cash flow, what will happen to it? Most probably it will go bankrupt very soon. The same theory applies to individual too. PROFIT OR LOSS? It is up to you to decide.


3) SEARCH SOLUTION

After all your efforts, you noticed that something is amiss. You realized that you are spending RM1.10 for every RM1 you earned. How to solve it?

When you are spending more than what you earned, you are in critical stage of debtness. You are owing people (bank) money! This does not sound good. Imagine you are compulsory to repay your debts next month. You will eventually become a free labour and work for your creditors for that month.

The next wise step to take is to increase your earnings. Get yourself a part time job. I bet many companies are looking for promoter on weekend. You might consider using your skills to earn money. Conduct tuition for students or get some freelance projects if you are a technical person such as web designer or programmer.

"STOP BLAMING OTHERS FOR NOT EARNING ENOUGH"

There is a lot of ways to earn additional income. Just fully utilized your brain and think.

The optimum method to sustain in the current hardship living is to employ all of the above ways: start to save early, reduce spending and increase income. By doing so, your future will be more secure and guarantee.