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09 January 2008

Why am I always broke at the beginning of every month?

We work so hard and long hours from Monday to Friday, sometimes and most of the time even on weekends. Everyday is like a routine, wake up early in the morning and getting stress up driving through the maddening traffic every day, rush to lunch, going through the same maddening traffic to get home and so on. It is a never-ending story and I suppose it continue to go on until retirement.

Then one day you start question to yourself “ when is this going to stop? When am I starting getting enough money to retire comfortably? I have a friend for many years, he start complaining about his life from the start until he retire (he end up retired poorly). Believe me, not having enough money upon retirement is like hell. Not getting enough money and cannot afford a big luxury car and so on. But he never think of the many ways to improve his current situation. Instead of complaining, it is better to come up with few ideas on how to improve one financial situation. Complaining about it without doing anything to solve the root of the problem is to me a bloody waste of time. Why complain?

Complaining isn’t going to help you to get more money or at least improve your financial problem.

For example, let us do some thinking like, how to make your hard-earned ringgit (RM) stretch further by adopting a smart and healthier attitude toward money management and be coming a careful money spender.

Let us begin by looking at where all the money goes (out of our pocket).

THE BIGGEST MONETARY WASTES:

a) Extravagant life style: going out for expensive dinner, eating out more frequently (almost everyday), Spend more at restaurant. Buying the expensive designer clothes (even though we know we cannot afford but for style, who cares), buying unnecessary gadget i.e. expensive latest nokia handphone with TV tuner, MP3 player, 5MP camera and so on. The list can go on.







b) Gambling: Buying the 4D and hoping to win the 1st, 2nd and 3rd prize for couple of thousands and then keep on saying the word over and over again “if I won the 1st prize, I am going to spend the money buying all the thing that I have always wanted”. My friend, gambling can be very addictive than smoking or drinking or womanizing. It can drain your saving or whatever amount of money you have like water rushing out of the tap. The simple advice is keep away from gambling except during festive season such as Gong Xi Fa Chai where the gambling must end on Chap Goh Meh.

c) Cigarettes: If you are a heavy smoker, you might not understand the economic significance of a daily packet of cigarettes over a lifetime (if you live longer to see it for yourself). The cost of a packet of cigarettes nowadays is roughly between RM 8.00 to RM10.00 (depending of the brand). If you smoked a packed a day, in a month you have to fork out at least RM 240.00 and in a year you may have spend about RM 2880.00. That my friend a lot of money. If you invested the money, instead you may be getting a handsome return. However, it is easier say than done. To be able to quit smoking is a very hard thing to do to some people but hey, you have to sacrifice something to gain isn’t it.

d) Paying too much interest: I believe most of us have a credit card (at least one). In fact, it is one of the most valuable plastic card you often carry with you wherever you go. But if you use it wisely it actually help you financially but if you use it wrongly, well, you will suffer for it. Those of you carry outstanding balance from month to month is a sure sign of danger and you are force to pay more and more to be able to eventually settle the amount and the moment you paid them in full you will be tempted to use it again. To avoid being in bad debt, manage your credit cards carefully by:
· Paying off your card balance in full every month.
· Using it wisely to take advantage of the 20 day free interest period.

In short, to be able to manage your money carefully is not that hard to do. It just needs practice, discipline, and strong will power not to buy or spend unnecessarily. Budget for necessities such as Food, Electricity, Petrol and so on. Tackle the one that is most important first. Manage compulsive buying behavior by keeping less cash in the wallet so you are not tempted to spend what you don’t have. Shop with a list. And most importantly is start putting away some percentage of your earning and invest them. Let the money be your servant. Let the money work hard to get you more money. You are the master not the money.


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