Kick-start Your Money Goals
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Discovering and planning your financial goals is the ticket to staying fiscally fit as you lay the foundation to maximise the value of your cash.

With a specific set of financial aspirations underlined, you have in your hands, a powerful and motivating tool to keep you making good money-management decisions all year round.

But just how do you get the wheels in motion for your all-important money goals?

Kick-start Your Money Goals

Define and Set Your Goals

Financial goals are just like any other, in that before you do anything, you need to first have them defined.

So just what are your money goals? Use these helpful hints to identify and craft attainable goals:

  1. Ask yourself what it is you want to achieve, is it a deposit for a new car purchase, do you want to clear out mounting credit card debt or simply increase your level of savings? Big or small, write it all somewhere you can see, so that your targets are within sight and in mind.
  2. Be specific and avoid vague objectives like, “I want to have more spending money”. Say instead, “I want to increase my disposable monthly income by 15% and decrease daily expenses by 5%”.
  3. Be reasonable – Make RM1 million in six months? We’re not trying to rain on your parade but do ensure that your goals are achievable, will not put too much of a strain on day-to-day finances or demotivate you when it does not happen.
  4. Deconstruct big goals by dissecting them into bite-sized portions. For example, buying your first home is a major financial uptake, so perhaps try to save for a down payment first and only then move on to cover other entry costs.
  5. Put a time frame on it – Set a realistic time frame to accomplish your money goals and make a review of its progress and feasibility from time to time.

Money Goals to Keep You Fiscally Fit

Before you progress towards other targets that maximise the value of your money like investing or buying a second home, here are a few essential objectives to check off your list first:

Maintain a Healthy Level of Savings

In a recent survey by Bank Negara Malaysia (Financial Capability and Inclusion Study 2015), only 6% of Malaysians possess savings of six months or more to support themselves in the event of sudden loss of income. It is clearly time to make changes to improve our reserves. Try these handy suggestions to develop your own savings:

  • Make deductions for your savings before you start spending. This way, your outgoing budget is reduced and your nest egg prioritised.
  • Join a savings programme that automatically deducts from your income account and funnels into a dedicated savings account.
  • Aim to first reach savings worth three times your monthly income and once achieved; increase deposits to fulfill a comfortable level of six months’ worth.
  • Keep an emergency-only credit card on hand, so you do not blow through your savings in times of financial distress, especially if your emergency fund is presently insufficient.

Get Insured and Stay Protected

One trip to the hospital can severely dent or even wipe out your hard-earned nest egg – this is why medical insurance is an indispensible (and indirect) shield for your savings.

As a start to cover hospitalisation costs, do look into procuring a basic medical insurance card and when financially able, you can move on to comprehensive policies for greater coverage.

Consider also, life insurance policies that come with a cash value or savings feature which could be used as a retirement bolster (read more about retirement savings below).

Alternatively, a cheaper, basic, term life insurance policy can protect the financial wellbeing of your dependants and provide monetary support in the unfortunate event of permanent disability.

Secure Sufficient Retirement Funds

It’s no secret that your EPF savings alone is not enough to cover your retirement living costs, yet it’s one of the most neglected goals for young folk who view retirement as a long way away. But times flies and earning capabilities dwindle for most, thus, you’ll need to rev up contributions from now to see at least a decent sum.

Basic EPF contributions should see around 23% to 24% of your monthly income (total minimum contributions by employer and employee) go toward your retirement. Still, research by the Private Pension Administrator Malaysia (PPA) suggests that to even cover two-thirds of your current income in your retirement years, you’ll need to put aside 33% of your monthly income.

In other words, you’ll need to apportion another 9% or 10% of your income for retirement savings to enjoy adequate income replacements in your golden years.

To help you make bank for your retirement, try saving through the Private Retirement Scheme which even comes with a tax rebate and if you qualify, a RM500 contribution from the government under the PRS Youth Incentive.

Taking Control of Debt

The most important financial goal that we have saved for last is related to how you can take charge of your debt. Now, while each of us may define being debt-free differently, the main aim of managing your debt is to minimise fees and interest costs associated with credit and borrowing.

Here’s how to shrewdly keep debt levels controlled:

  • Negotiate interest rates for financial products (home loans, balance transfer fees, etc.) especially during sales periods to enjoy the lowest promotional rates. It may not always come to fruition but it is worth a try.
  • Consolidate debt to reduce interest payments.
  • Be clever with credit card spending and make use of the interest-free period.
  • For larger purchases like appliances and furniture, pay cash or charge to credit cards that provide zero-interest, easy payment plans.
  • Stay updated on tax information to fully utilise applicable interest rebates and related incentives.

“A dream becomes a goal when action is taken toward its achievement.” – Bo Bennet

Achieving your money goals requires a whole lot of planning, persistence and motivation but most of all; you simply need to get started!

Now is the perfect time to take stock of your finances and put together a plan for where next year’s earnings (and beyond) can take you.


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