Friday, January 4, 2008

Where’s my money gone?

MOST of us work hard and long hours from Monday to Friday, sometimes even on weekends. We wake up early, drive through maddening traffic every day, rush through lunch, battle the same maddening traffic to get home and collapse in front of the TV at the end of the day. We start thinking, “When can I finally have enough money to afford my retirement? Where does all the money go every month? Why isn’t there more of it in my savings account?”
Sound familiar? In fact, people who earn a decent living and still have problems making ends meet are probably in the majority. But you can make your hard-earned ringgit stretch further by adopting a healthier attitude towards money management and becoming a careful spender.
The biggest monetary wastes
First, you need to figure out where your money is going by drawing up a budget. Once you know what you are spending on, it’s surprisingly easier to spend less and save more. This is because a budget helps you to identify the biggest wastes of money.
Extravagant dining: Malaysians just love to eat. As families in Malaysia become more affluent and more air-conditioned food outlets are opened, eating out becomes a social norm and we spend more at restaurants.
Gambling: I read an interesting fact once that the chances of striking it rich at lotteries was slimmer than being hit by terrorists! According to one report, gambling can be more addictive than smoking or drinking and is potentially a silent but quick robber of our savings.
My advice is simple – just stay off gambling altogether except during the occasional festive season get-together with relatives or friends – if you celebrate Chinese New Year, the gambling must end on Chap Goh Meh.
“Premium” coffees: It is okay to treat yourself occasionally with a premium coffeehouse blend. But if going there is part of your routine every other day, I suggest you kick your caffeine addiction and put the savings somewhere else more profitable.
Cigarettes: If you are a heavy smoker, it’s unlikely that you understand the economic significance of a daily packet of cigarettes over a lifetime – presuming, of course, that the smoke you inhale permits you to live a full lifetime.
Say a young man starts smoking a pack a day at the age of 20 and continues until age 70. Assuming the current cost of cigarettes remains the same at RM8.20 (which is most unlikely), the money that has gone up in smoke over 50 years is RM149,650 or RM2,993 per year. If he puts that amount away in a risk-free investment instrument at 4% per annum, after 50 years he would have RM456,932 stacked in his retirement account!
Paying too much interest: Do you routinely pay your credit card balances promptly and in full, so that you are not charged an interest?
Those of you who carry unpaid balances over from month to month may find that you are on your credit card company’s list of super customers. Speak to your bank to structure a loan for you in order to settle those unpaid credit card balances. Manage your credit cards by:
 Paying off your card balance in full every month.
 Using your credit card wisely to take advantage of the 21-day free interest period. Get your credit card company to vary the payment cut-off dates.

the star
posted by paymedollar at


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