May Peace be Upon You
For this week, I am going to share one knowledge that can be apply to all of those who are working either with government or private sector that earn fixed amount of wage on how to manage their salary by divided it into several part. This knowledge actually come from the books that I have been reading since early of this month. This knowledge is only applicable to those who are still single and for the married one, you can still use this knowledge but you may need to adjust some of the figure that I am going to share with according to your compatibility.
Usually within one week after receive your paycheck each month, almost 70%-80% of it had gone and you did not know when and where had it gone. So before you wasted your money, here's what you need to do to keep track your money flow and stay away from over spend. For this explanation, I will use the average salary for fresh graduated worker which is RM 2,000 after deducting EPF and Socso. What you need to do is you need to divide your salary into several portion or percentage. For me myself, I divided my salary into 7 portion which are
- 50% of salary for saving which means RM 1000 will be use for saving. What you are going to do with this money is up to you, either let it stays in your bank account or you can invest it. if you choose to invest it, you can invest it in unit trust or in gold. You can pick whichever you want that suit your desire. For the married one, you may need to lower this percentage as you may need to use more on spending for your family.
- 22.5% for daily spend which means RM 450 will be use for your daily expenditure including petrol, food, car loan and other stuff that you need to pay each month. If possible, try to lower your food consumption in term of snack. Even snacks price are cheap, but that is optional and you can choose not to consume it as it is unhealthy and wasteful of money. For those who are married, this portion need to be a lot bigger as you need to support your family food and need.
- 10% for charity which means RM 200 will be use for donating. You may lower or remove this portion if you think that charity is not important for you. Based on Islam point of view, the money you give to charity is your money and the money in your pocket is not entirely your money and probably it is someone else money. The more you give charity, the more you will get.
- 5% for travel which means RM 100 will be use to travel to your dream place. This does not mean that each month you will use this money for travel but this is the amount you need to save if you want to travel locally or abroad to loose you joint and escape from work stress for once a year. Let say you start saving the travel money from January to December, then at the end of each year you can use RM 1200 for travelling to whichever place that you want. If you are planning to go abroad, I'm suggesting this portion to be a lot bigger as the Malaysia currency now is still very low compare to US dollar.
- 5% for networking which means RM 100 will be use to established your networking either with your friends or coworker. This portion is very important if you are doing part time job that require you to have big networking.
- 5% for miscellaneous which means RM 100 will be use for unexpected item such as replacing your home light bulb, your car maintenance or pills and medication for your health.
- 2.5% for books which mean RM 50 will be used to increase your knowledge. There is a saying said " Knowledge is more powerful than money". Just buy any books that can increase your knowledge in whatever aspect, be it in financial planning, self motivation or even cooking books. The more knowledge you have within you, the wiser you will be in making decision.
That is how you spend RM 2,000 efficiently without losing track where the money has lost to. All of these percentage are not fixed and you can modified it so that it can be suit to your situation. The most important thing is you must be discipline to follow your own percentage so that you will not over spend the money that you had been allocate.
So, that is all for this long post and I hope it is beneficial and can be implemented to improve your future. Before I forgot, this is one thing to ponder where if you can use 1 month salary to support you for 2 month of living, then that's mean that you are over spend and you must reflect yourself and change it before it is too late.
May Peace be Upon You