I often hear people talking about how hard it is to take control of their finances as they don’t know where to begin. Handling their finances can be too complicated which leads to multiple rash decisions made by them which can be right or wrong. For some, they drown themselves in debt & for others, their money sits stagnant in their bank account. Both situations are equally problematic, as their financial literacy is too low for effective handling. Taking charge of the situation only requires a bit of work, which may take 15-60 minutes of your weekly time. These 9 ways have proven to be an effective way for you to be able to make a change today.
What Are The 9 Ways To Take Control Of Your Finances
1. Educate Yourself
Educating yourself by reading blogs, financial websites, watching YouTube videos on financial-related & books is the best place to start. I know that book is the last option, especially for non-readers. If book reading is too long for a start, you can start by reading blogs or watching some YouTube videos. Some YouTube videos are so interactive & entertaining that you can get educated at the same time. All these activities will only take between 15-60 minutes of your daily time.
2. Create An Achievable BudgetIf you do not have any budget, start by analyzing your current fixed expenditures start as loans, bills & others. You should have an estimated budget for how much you usually spend on food every month. You can start by creating a daily budget for your food which you can split between breakfast, lunch & dinner. If you need extra budget for the weekend or special occasion, do add that on as well in your budget.
3. Find Ways To Cut Your ExpensesThe easiest way to cut your expenses is by reviewing your current subscriptions that you don’t need or the ones that you do not use frequently. One of the biggest cuts recently is on my phone bills which I managed to reduce from RM100 to RM45 each month. That is RM660 per year. Even if you can cut RM20 per month, that is RM220 per year.
4. Eat DifferentlyThis may require a different discipline for you to make it happen. Perhaps you are eating out 100% of the time & you do not have any time to cook. Try to prepare your meals during the weekend. You should be able to save some cash from it. Another way to eat differently is to prepare your breakfast at home instead of buying breakfast daily. Aside from making an eating in & out ratio, you can also try to eat differently by just changing your meal habits. Instead of having 20 cups of Starbucks monthly, try reducing it to 15. You can save around RM70-RM100 each month just by doing that.
5. Work On Your DebtI hate debts & I am sure everyone does too. Some debts can be manageable, and some can be unmanageable. Housing & car loans can be considered as manageable if you can pay them without a struggle. If you are struggling to pay both debts, then there is something wrong with your finances. Another debt that you should be aware of is personal loans & also credit card debts. If you have those debts, you need to work on a plan to ensure that it is paid.
6. Save MoneyWe are taught to save money when we are young with our “tabung”. With the e-wallet introduction, saving physical cash can be quite a struggle. 2 suggestions that you can save money would be by transferring your cash from your active bank account to your other bank account which you don’t use frequently. You can start with as low as RM50 each month. Another platform that I use to save & invest is Raiz where I set my savings at RM15 each week to be deducted from my bank account.
7. InvestInvesting is usually “hard” for people who have no control of their finances since they “don’t know” how to invest. This is why the current investment platforms are so easy that even with minimum knowledge, you can invest. For those who want to invest with no knowledge, my recommendation will be Robo-advisor such as StashAway & Raiz. Your next question is, you don’t want to take much risk. Yes, both platforms have different risks that you can choose from from low to high risk.
8. Financial GoalsIt goes back to how detailed & comprehensive you want your financial goals to be. You can set it as simple as “I want to save RM500 per month or I want to invest RM500 per month”. It doesn’t need any complicated ones to begin with. The only 2 things that you need to have for your financial goals is to have short-term & long-term goals. If you are looking for a more comprehensive goal, you can check out my previous post on goal setting.
9. Getting InsuredMany people overlook the importance of getting insured. Life & health insurance are the basic insurance that you should have. It can be a cost that you need to pay each month but those expenses are to ensure that you are protected from any inconvenient situation. There are list of initiatives by the government to promote insurance to Malaysians such as I-Lindung & SSPN Plus by PTPTN.
Conclusion:
If you apply one of these ways to your current life right now, you will start to be able to have control over your finances. You can start almost immediately by taking each of these steps. You may find it stressful at first since you are not familiar with it but it is worth trying. When I started planning mine, I took a rigid planning which put me in a very discomfort situation. As my finances improved, I started to be less rigid & my wealth has grown along the way due to my years of planning. If you find it hard to work on these 9 ways, you can start by choosing the most simple ones & add on more as you are more comfortable with it.
OSS!
