Most of us would have to contend with paying monthly utility bills such as electricity, water, fixed or mobile phone lines, cable TV, broadband etc. It pays to pay attention to these bills even though they may only account for a small portion of your expenses. Because they are recurring expenses, small amounts of savings may account for moderate gains as the malay proverb goes “Sedikit-sedikit, lama-lama jadi bukit!”. Small steps we can take include:

1. Switching off lights, fans, air-cons and tv sets when not in use. Appliances consume electricity even on “standby mode”.
2. Maintaining the air-con temperature between 24 – 26 degrees Celsius unless it is a very hot day! At this temperature it is more energy efficient.
3. Removing unused plugs from wall sockets will reduce minor power leakages.
4. Plan your household chores to reduce the frequency of switching on/off. Heat producing electrical appliances like ovens, irons, kettles, cookers, steamers, fryers etc tend to consume a lot of electricity especially when switched on often.
5. Reduce water wastage by using showers instead of bathtubs, check for dripping faucets and leaking pipes, save rain water for watering plants, etc
6. Review your phone line packages. Opt for less expensive packages where possible since most people use free apps like WeChat or WhatsApp instead of smses.
7. Where possible use FREE WIFI!

Simple as it may look, the above steps may save between 10% to 20% of the monthly utility bills. The success is dependent upon persistent application.

The idea of car pooling has been around for a long time. The concept of pooling from home to work and back is often impractical, or at best, an inconvenience. But there are variations which may be more practical and cost efficient.

Parents can car pool to fetch children to and from schools. Some parents may send the children to school while others may fetch them home. This also promotes good neighbourliness. Office executives can car pool when going out for lunch thus saving petrol as well as parking charges. They can even car pool when meeting up with clients by planning their meetings and appointments within the same vicinity, eg, meeting for lunch at different food outlets within the same shopping mall.

Car pooling need not be confined to work days. During weekends while doing marketing or grocery shopping, neighbours can also pool their cars. Better still, car pool with sibling families if they stay nearby. Apart from saving on fuel expenses, we will also be doing our part to protect the global ecological balance.

Such proactive steps can only succeed if we put them into action. And these require us to develop awareness at all times until it becomes a habit. Regularity breeds familiarity.

A very rich tycoon was once asked why he bothered to bend over and pick up a penny he found on the roadside when he has billions in the bank. His reply was plain and simple yet enlightening, “Even a penny has a value and a healthy respect for that value is required to deserve riches.” No matter how small the savings, it is significant in the overall financial picture.

It is important to develop the habit of savings especially in the face of the current price hikes of various essentials. Starting with our pay, how many of us set aside a portion of our salary for the proverbial rainy day. Even if it is as small as a ringgit, it is still a start. It is not so much about the amount but rather the discipline. Here are some practices we should inculcate:-

1) Don’t buy on impulse; prepare an intended shopping list beforehand even if it is just mental.

2) Take note when going for sales that not all products may be on sale at the same time. Many establishments eg hypermarkets, usually employ a loss leader concept which offer a very low price for an essential item while the rest may be higher than elsewhere. This is when ‘by-the-way’ shopping will nullify any savings.

3) Compare the amount of savings against the cost of gaining access to the sales. It is not wise to save RM10 while the petrol, toll charges and parking exceed the savings.

4) Making do with what you have now and making the purchase at a later date where possible eg mobile gadgets. Delayed gratification may save you as much as 50% of the launch price.

5) Reducing the frequency of eating at more expensive outlets.

6) Pay your credit cards on time. Pay in full where possible! Many are not aware the monthly compounded interest can exceed 18% pa.

Have you ever wondered how is it that a parent can support a few children’s education even with a small income? It mainly boils down to sacrifice and savings. Do not underestimate the power of disciplined savings!

Despite the high prices of cars, car ownership has been increasing. This is due in part to the poor public transport system. While it may be easy to purchase a car, maintenance may be a different issue. It can take up to as much as 2-3% of your income, more for older cars.

Cars should be regularly serviced especially old cars to reduce breakdowns which may result in costly repairs. A good and reliable mechanic is important to ensure the servicing is done meticulously. Spend some time to look for an experienced mechanic who you can depend on. This can save you time and money in the long run.

Do not be penny wise, pound foolish! Use quality materials and parts which can give you prolonged performance compared to inferior ones which may require constant replacements.

Cars are not assets but a convenience to take us from one place to another. As such it is important to select the right car based on your needs. This will give rise to savings which can be wisely invested for your future.

It is not uncommon for Malaysians to over consume in times of festivities like Chinese New Year. Not only will much of the food go to waste, but over eating can be detrimental to health.

Much of the income of the average Malaysian is spent on food. There is much that we can save if we would only consciously manage our food intake. Start by reducing the frequency of patronising expensive food outlets. Expensive does not equate delicious! A reduction of 20% of frequency will result in an equal amount of savings.

Be mindful of the number of dishes ordered. Many a times we actually do not need 7 to 9 dishes for a sumptuous meal. On occasions 3 to 5 may serve just as well. Order larger portions instead if the group is bigger. Drinks often comprise a large portion of the bill. To improve savings it is often wise to consume good food with tea or just plain water.

There is a Chinese advice that suggest, “Zao Shang Chi De Hao, Xia Wu Chi De Bao, Wan Shang Chi De Shao!” The English equivalent would be “Breakfast like a King, Lunch like a Commoner and Dine like a Pauper!”. This sound advice actually leads to good health. Eat mindfully and save.

We have often come across policyholders who seek our advice regarding policies they felt they had bought wrongly. Some of these include policyholders who had bought savings policies with purported high returns but very low coverage costing thousands or tens of thousands of premiums. In these current times the premiums become a burden. There is nothing much we can advise except to reduce the plan.

It pays to scrutinise the proposals before committing to them. The main purpose of purchasing a policy should be protection followed by savings with reasonable return. Would-be policyholders should be aware the returns quoted are not based on capital invested but the sum assured. As such, a 10% return for a RM10,000 premium policy may only yield RM500 (sum assured is only RM5,000).

Purchase insurance policies according to needs and budget. Do not over stretch the budget as our financial situations may change. Policy with cash values can help tide over difficult times thus it is better to keep up with existing policies rather than replacing them with “new” policies.

Likewise review all existing general insurance policies like motor, fire, burglary, personal accident, medical and other insurances. Be aware some of these insurances will see an increase of premiums in the new year. It pays to be financial cautious and diligent!

In our last writing, we advised policyholders to review their existing insurance policies. Much savings can be gained from this simple exercise. In fact, annual or bi-annual reviews are necessary.

When insuring residential or commercial buildings, the sum insured should be based on cost of reconstruction rather than market value of the buildings. A semi-detached house valued at RM2.5million may be reconstructed in the event of a fire for RM1million including removal of debris and consultant fees. Thus the sum insured for fire insurance should be RM1million instead of the market value. Pay attention to extra perils like lightning damage, flooding, soil subsidence etc.

There may be many purchasers of apartments and condominiums who are required to take up fire policies by the financial institutions which provide the mortgage loans. But the Joint Management Bodies may also require them to contribute premiums to the Master Policy, thereby in effect paying double premiums. In such instances, it would be advisable to write to the financial institutions to either reduce or waive the policies. Please note that these policies normally cover only damage by fire. Burglary and liability policies should be taken separately.

Annual reviews are also advisable for burglary, M & E and motor insurances as allowances should be made for depreciations and additions. We cannot over emphasise these exercises could save you many hard-earned ringgit!

Call us up for a free policy review or advice at no obligation!

How many of us have expensive hobbies or hobbies which involve much expenses? Cars, super bikes, Japanese Kois, exotic pets, bonsais (expensive ones), mountain climbing, scuba diving etc? These are life enhancing experiences giving ‘deeper’ meaning to life and lifestyle. Often times it’s the stuff that provide the rejuvenating juices we all need from time to time either as a stress reliever or impetus to push harder to achieve our goals.

I used to dabble in Japanese Kois. These ornamental fish can run into thousands of ringgit each, if not more. As all worthwhile goals require sacrifices, I decided to reduce my expenses like purchase of new fish, cutting down expensive fish feed, reducing impulsive purchases of equipments and supplies etc. Eventually I managed to reduce by a couple of hundreds expenses per month. Nowadays I’ve taken up less expensive hobbies.

Review your expenses which may not be necessary while retaining the same pleasure you derive from your hobbies. Group travels in less expensive lodgings for your climbing expeditions or photo outings can save some expenses with new experiences.

Life should be lived well. And we can often do it with less expense. As one famous architect would put it, “Less is More!!”

With the current rising cost of medical care, even an appendectomy can set you back RM10,000 per incidence. The growing number of private hospitals is an indication of the lucrative healthcare business. This means we will have to dole out more cash for treatment of various illnesses as well as pregnancies. Planning ahead may save you a lot of heartaches!

As the saying goes ‘Prevention is better than cure’, it pays to look after your health. Delaying the onset of illness means there will be more productive years to accumulate wealth for retirement and medical care. Choosing a healthy lifestyle by eating right, exercising and de-stressing translates to savings in the long run.

Private healthcare is expensive and still rising making public healthcare a viable choice. While it may take a longer waiting period and the general facilities may be less comfortable, the public medical facilities may be more complete and the charges more reasonable. Additionally, one should consider a medical insurance policy to pay for the medical expenses. This may serve as a measure to preserve precious retirement funds.

Throwing good money down the drain seems to be a ‘favourite pastime’ of many a ‘would-be Warren Buffet’. Many uninformed investors are trying to make quick money in the stock market without sufficient knowledge of stocks or are just depending on rumours or hearsay. While the stock market has been in a bull mode since 2009 after the sub-prime debacle, it has not been rosy all the way. There is a lot of market noise most of which are untrue. Thus, if one depends on these rumours, the stock market can be a risky venture.

Many stories are told of huge gains reaped effortlessly through investing in the stock market. But stocks and shares investment is a zero sum game – when someone gains, someone else will lose! As such, investing in the stock market without sufficient information is almost tantamount to gambling. Unless you have unlimited resources to invest, managing your limited funds by investing wisely would save you lots of pain by mitigating unnecessary losses. At times it is better to be safe than sorry!

Most Malaysians especially the employed, plan their retirement funds via EPF. As past records have shown, this is insufficient for most retirees. It would be wise under current economic scenarios to set up an additional retirement account. These can be in the form of savings accounts, fixed deposits, investment accounts or life insurance policies.

Retirement accounts should preferably be NOT easily accessible. Many of those who save for their retirement via saving accounts or FDs, find it irresistible at times to access their retirement accounts to occasionally splurge. These splurging episodes may include buying a new car, going for a trip, purchasing costume accessories etc which may seem insignificant or small at the spur of the moment, but would have long term consequences. This is especially so if it involves a senior saver. There may not be sufficient time to take advantage of the compounding effect of money. Additionally, one should prepare for downturns which may reduce contributions to savings. ‘Make hay while the sun shines’ is the motto to live by.

While spending may be a pleasant activity, retirement planning requires discipline, focus and sacrifice for the long term good.