Millennials in Malaysia are known to be disciplined savers. That is what the results of a recent survey conducted by VASE.AI shows. In the results presented last May 29, 2019, the majority of the 1,525 respondents, however, admitted that the amount of savings is less than a year’s income.
For the twenty-something who are working full time jobs, you have the opportunity to reach your financial goals before you reach 30. The following are the financial goals Malaysian Millennials can agree on.
1. Always Have a Budget
When you have a financial goal, everything starts with a budget plan. Saving money without a budget is useless. You will be tempted to spend over and above what your salary will allow.
A monthly budget will help you keep track of all your expenses. You allocate money according to priorities. Usually, the order is savings, debts, rent, bills, food and emergency fund.
2. Pay Down Debts
You will achieve financial freedom if you can be debt free. Prioritise debt payments, especially loans with high interest. To avoid penalties, pay on time. Also, while you are paying down debts, you should not be accumulating new ones. Using credit cards is borrowing too. Restrain or minimise its use or not at all.
Likewise, try not to use your savings to pay debts. Refer to your budget plan to see where the money should go. Focus on paying off debts the soonest time possible.
3. No More Useless and Impulse Spending
You are exercising financial discipline if you can put a stop to useless and impulse spending. You will decrease your savings and disrupt the budget if you cannot correct this behaviour.
Ask yourself if the spending is a need or want. If you have financial goals to meet, splurging and spending on luxuries is a waste of money. Try finding for cheaper alternatives. By practicing prudent spending, you can save more money each time.
4. Set Aside Money for Emergency Purposes
It does not matter if you start small and eventually build up the fund. Ideally, an emergency fund should be able to cover half a year of your living expenses. The important thing is that you have a safety net for unforeseen or unbudgeted expenses.
5. Create an Investment Income
Creating an investment income involves choosing income producing assets and investing in them. Hoarding cash in a low interest bearing savings account does not offer money growth.
The only way to accelerate money growth is to let your money work and allow it to make more money. For instance, you can derive higher returns from stocks, either through dividends or price appreciation. When you reinvest the dividends, you will realise the magic of compounding interest.
6. Save to Buy a House
The vast majority of Millennials in Malaysia dream of buying and owning a house. It also comes with the intent of raising a family.
Buying a house is putting good money for real value because after all, a house is a long term investment. A house can be inherited to your loved ones later on. If you do not plan to reside in that house, you can always choose to rent it out.
When you become an investor, your dreams become bigger. You can focus on other bigger ticket items like a more expensive car or home.
7. Plan for Retirement
Retirement might be years away but the earlier you can build your nest egg the better. Many baby boomers are entering retirement with regrets of not having to save and invest during their younger years. Life in the sunset years is difficult if you do not have enough retirement savings.
Besides, relying on your pension alone is not a great idea. You still need other sources of income to secure your financial well being heading into the later years.
Practice Makes Perfect
The seven goals are interconnected that you cannot achieve your financial goals before reaching 30 unless you practice them. In the survey mentioned previously, Malaysia’s Millennials aged between 24 to 35 years old are mostly saving money to meet three main financial goals. Saving up for an emergency fund, buying a house and starting a family are the top three priorities.
The fourth financial goal is an interesting revelation and is common among the younger generation. A great number are also diligently saving money to be able to go on holidays.
If that is the case, all the more it is important to save and invest to achieve the financial goals in order of priority. Eventually, Millennials should have the financial freedom to travel the world beginning at age 30.
This article is prepared by Direct Lending, an online personal lending platform with the mission to provide simple, safe and affordable financing to all hardworking adults. We help borrowers to find, apply and receive financing that most suit them. Our service is 100% free.
Follow us on our blog & Facebook page as we share more useful personal finance tips.
