You've done it all in your twenties: vacationed every 3 months; hit the hottest bars and bought every new gadget you could comfortably charge on Easy-Pay. But the life of carefree spending has caught up and now you're 30 but still living paycheque to paycheque.
Some people are totally okay with this. They figure family, spouses and life will always find a way to work it out for them. Some people aren't so sure. That's when the cold sweats begin and every bill is a reminder of your dwindling bank account. Thank God for EPF or you'd have literally nothing to show 70 year old you.
But here's the truth: you can catch up. It's just going to take some tough going to make up for the slack thus far. Roll up your sleeves, folks. We've got 5 ways you can fire up those savings and be on top in no time.
Sell Your Skills or Your Stuff
If you have clutter in every corner – consider cashing it in for money you can pad your account with. Unless you have some serious collectibles, don't expect to make a profit off your cost but even a fraction of money back from an item sitting in the corner is a good trade off.
We've got a guide with all the info you need to get you started with cleaning out your clutter. It might sting a little to let go but you just might love what your bank account looks like after you're done!
If you aren't the hoarding type; you can always sell your skills via freelance or part-time jobs. As your bills will be paid by your full-time job, it leaves you to funnel all your part-time money into your savings. Even a couple of weekends of barista duty will give you a couple of hundred ringgit to kick-start that future fund.
Let Your Money Earn More Money
Earning more money alone isn't enough if you really want to maximise the time you spend saving. Once you have a sizable amount, consider putting this money into a fixed deposit or unit trust if you feel so inclined.
Fixed deposits can be started with as little as RM500 so let it do the work for you. Every time you have more; you can put it in too.
You won't have to work as hard if your money is doing part of the work for you by earning an interest all on it's own!
Contribute More to Your EPF or Consider PRS
Every month, you will be contributing 11% of your income to your EPF and your employer will be contributing more. But if you could manage it, you can put in more if you wanted to. EPF usually offers good interest rates but they also make it difficult for you to withdraw your money for spending making sure it is saved until you retire.
If you want to try something else; you could opt for funneling additional money into the Private Retirement Scheme (PRS). To find out more about PRS, we've got a simple guide to help you.
Relook at Interest Rates
If you have a mortgage, credit cards and other loans, you're probably paying interest on all of them. These interest charges are costing you a bit of salary every month: money that could instead be saved rather than paid to a bank.
Take a look at the rates of interest you are paying on all your banking products. Are they offering you good value? If not, you can reduce them by remortgaging your home under a lower rate home loan; get a balance transfer for your credit card; or consolidate your loans under one low interest rate.
Make Lifestyle Changes
We saved the hardest for last. This is only if you are really ready to downsize and make drastic changes in order to see your bank account grow. It's definitely not for the faint of heart!
Lifestyle changes that should see you growing your account in no time include:
1) Saving first. Create a standing instruction with your bank to have a portion of your salary deducted and funneled to a savings account that you cannot touch.
2) Downsizing your living. Consider moving to a smaller home or getting subtenants, or roommates to split the costs with.
3) Ditch the car. If your home is sufficiently connected to public transportation or you have colleagues you could carpool with; this will help you save a tonne on petrol and toll. You can keep your car for weekend use or emergencies but reducing your driving will surely reduce your costs.
4) Trim entertainment budgets. This does not have to be a permanent measure but perhaps it is something you can do until your account is sufficiently padded. Keep entertainment spends to a minimum until you're back on track.
5) Consider a new job. Have you been scared to take your career up a notch and have as such been accepting a lackluster pay package because you aren't confident enough to up your game? There's no harm in trying. Send out resumes and test the market. You could also take a short course or certification to make you more desirable in the market.
Whatever you decide to do will require commitment and some discomfort so be ready for that before you take the plunge.
The best thing you can do for yourself is to believe that it is possible and achievable. It surely is. Late is better than never so don't be discouraged by comparing yourself to how far everyone else may seem to have gotten.
Concentrate on getting back in the saving game and you'll be just fine.
Do you have any saving tips to share? Let us know in the comments.