Prudent Spending

Nowadays without prudent planning, it would be really tough for us to survive in this society especially with the inflation or rising cost living.

What does RM100 get you if you are a young executive in Kuala Lumpur? I think you could not do much about it except for your normal routine transportation and meals. Some might finish it within 1 day or 2 but some are able to survive with it for a week, why is that? The reason is because it depends on how do you spend it and the way you choose to live with.

You can make your money stretch further if you learn how to manage it carefully, such as:

Know what you want to do with your money
Be transparent with your own financial status. Ensure you know how much is left at the end of the month after allocating money for your monthly expenses such as rental, car installment, petrol, meals and other necessities.

Know where your money goes
Be aware and alert where your money goes and make sure you do not spend on unnecessary things. Things like clothes, shoes or accessories are endless favourite buying products. There are always new trends, fashion and style, so if you do not know how to limit yourself, then all your money will be gone in the wind.

Know your spending habits
If you found that you have not much money left to spend at the end of the day, then you might want to look into your daily expenses, grocery bills and households item. Check whether there are any items that are not necessary to purchase.

You should also look out for some of the warning signals of bad spending habits that will lead to real money problems:

	You use your savings to pay current bills
	You delay payment of some bills which you used to pay on time
	You take out new loans to pay for old ones
	You defer your loan repayments
	You prefer to pay by installments when buying everyday household items
	You owe more than you earn at the end of the month
	You buy on impulse even though you know you can't afford it

Develop a prudent spending plan
Establish your monthly total income, total up all the fixed monthly bills, repayments, daily living expenses and etc. Place aside a fixed sum of money that is enough to handle emergency or seasonal expenses. (Income tax, Insurance renewals, etc)

Spend wisely and within your means
Ask yourself this question whenever you want to spend on something, 'Is that a need or just a want?' Do not spend on unnecessary thing.

Reserve some money for your future
If you found there is no surplus left after deducting all the expenses, you might need to review your list again. Try to cut down the expenses by Do-It-Yourself. For example, making your own breakfast or cook more often, exercise at home or park instead of paying to join the gym center and etc. You may want to cut down utility bill by monitoring the use of your water and electricity and also restrict calling at peak hours.

It is always a matter on how you plan and spend your money and not how much you earn. Besides that, we always have to learn how to tight on thrift.

Remember Cash Is Best - Always pay cash in any transaction (other than buying a car or house). Do not fall for hire purchase schemes, however attractive they may be. The tactic or philosophy is - if you cannot afford it, you do not need it! Paying by credit cards in advance merely postpones the payment - until month-end.