Budget Blues

"No time" is one of the top excuses for not preparing a budget.  Failing to budget may lead to personal bankruptcy.   A budget is crucial to to manage your money otherwise you may spend your way to serious problems.

• Set a spending limit.
• Track expenses.
• Develop smart spending habits.
• Use credit cards wisely to avoid unnecessary interest or penalty.
• Pack lunch if you can.
• Share resources like car-pooling or books/magazine.
• Reduce fixed expenses
• Ideally not more than 60% should be on expenses.

Budgeting requires discipline to succeed, but once it becomes a habit, you will reap the benefits tremendously. 

Whats your cost if delay investing

Some of us put off financial planning, postpone retirement savings or delay pay off escalating debts.  These eventually translate into a bigger financial loss. To eradicate this habit, learn how time determine the value of money.

• The power of compounding. When money works for us, it grows in value or compound, earning interest on interest and it is one of the greatest aspect of financial planning. 
• The cost of procrastination. If your goal is to raise RM100,000 by age 65,  compounding at an annual rate of 10%, your current annual saving (assuming you are 20 year old now), RM1,132. However if you only start your savings at age 50, your annual saving will be RM22,500.
• Inflation factor. The price of goods and services increases over a period of time. Thus a dollar tomorrow will not buy as much as today's dollar.
• Other lost opportunities. We can be adversely affected financially if we put off other important financial matters like life assurance, retirement plannning, estate planning or even basic financial planning.  Eg the insurance period of a 45 year old is much higher than than for a 20 year old for the same coverage.

Delaying manging our money may result in lesser in value compared to investing now.