BY VIKTOR CHONG

IF you are currently at the age of 20 something, just out of the university and stepping right into the employment market, saving now to secure your financial future may be the least of your concern with the obligation of rents, study and car loans and other daily expenses.

However, there are a few simple steps to be considered if you would like to start early on saving a buck or two.

Live With Your Parents

The stigma associated with a grown individual living with his or her parents does not offset the benefits. With mom and dad, you don’t need to pay rents. Considering the average lease of a small room in Kuala Lumpur is RM500 excluding utilities, that is a big thing.

In a one-year time frame, you could save up to an amount of RM6,000. Couple that up with the joy of healthy, home-cooked meal, prepared with love from your very own mother, an individual could save up for breakfast and supper, further cutting back on cost.

You might also be able to skip the bills for the electricity, internet and other utilities.

Leveraging People

If you have a friend who happens to pass by your house on the way to work, be sure to ask them for a ride. Pay them a small fee for the trouble. Even better, ask them if they are renting out and if there is a room available for you.

Renting in pairs allow you to spread rental and utility expenses, lowering your financial burden. The idea of carpooling also removes the need to maintain a car loan and other cost associated with owning a car like maintenance, road tax and petrol.

Personal Accounting

Keep a record or an expenditure journal for every expense you incur. Everyone knows this, but nobody does it. The saying goes that people do not feel what they do not see. You will be surprised to realise the cumulative amount of money you have spent on some cheap snack.

A detailed record provides you with a more precise picture of your financial budget, allowing you to revise and adjust accordingly. Make a simple excel spreadsheet and program it to compute all your monthly expenditures automatically.

Goals

Set a financial goal that you can stick with. Keep it realistic. For example, you could set a goal of saving RM500 a month. The very moment your salary comes in, be sure to take out the RM500 and bank it into a separate bank account or put the cash physically into your cute, pink piggy. With this apportionment, you create a mental barrier that inhibits you from touching this money.

It is hard to resist your shopping frenzy when your monthly salary is sitting comfortably inside your wallet, screaming for you to spend it. Try to apportion at least 20% of your monthly salary as part of your savings. You can monitor the condition and progress incrementally to 30% or above.

Do keep in mind that your health should not be affected by your budget cuts.

Avoid Premiums Like The Plague

Shop wisely.

Delayed Gratification

Curb your impulses and differentiate the need from the want.

Self Cooking Is In

By preparing your food, you bypass the service charges and even the labour cost associated with the process of making the meal.

Living in a rented apartment with your roommates? Cook along with them and share the food expenditure. Bring your lunch to work in a Tupperware. No, you aren’t cheap, just creative.

Take Good Debts

Not unlike healthy food, a financially sound investor takes in good debts like supplementary vitamins. The banking institution can be leveraged to provide free income to a property investor. For example, an individual takes up a housing loan, paying RM1,000 a month to finance it. By renting the property out, say for RM1,500 the individual makes a profit of RM500 per month. Property investors progress in such a manner, earning passive income through the rental collection which is then used to offset the monthly loan instalments.

However, take note the dry period in which your property will have to wait for a tenant to arrive. Bad paymasters will also defer payment by a few months, forcing you to finance the loan personally. It is essential to maintain a deposit of cash to safeguard against such events.