Financial Advice for 26M

[kars]

Hello r/MalaysianPF,

I am 26 this year and had just started working 6 months ago. My take home pay is +-RM2,550 if I don’t take leaves. I work Monday-Saturday, 8:00-19:00.

Here’s my monthly spending breakdown :

Accomodation = RM800 (there’s nothing I can do about this, housing in this area pretty much cost the same. But the location is very good because I can walk to office.
F&B = RM450 (More or less, never more)
Parents = RM200
Petrol = RM100 (I don’t have a car but the company let me use one if needed and sometimes I borrow friend’s car)
Student Loan = RM84
Entertainment = RM 45
Laundry = RM40
Phone = RM30
Internet = RM35
Total Essential Cost = RM1784

That leave me around RM766 each month. Normally I’d save this up or buy something nice for myself. I am on LDR so not really spending on dates, just some casual gifts and surprises.

I used up all my saving(Wahed+TabungHaji) recently to pay money I owe to my brother and mother.

Now I am looking for advice on how to place myself in a better financial position. How can I have 3 or 6 months emergency saving faster, or where should I put all my money going forward. I am also plannig to have my own car but that is currently not feasible.

Thanks in advance.

 

[redimi2]

@kars Hi bro. First of all, congrats on budgeting your salary and paying up your debt with your family. Shows thats youre responsible with money and that in itself will be a big reason you’d be set up in the future

You are absolutely right about wanting to get 3m emergency fund next. Forget about investment grade assets, ROIs, crypto yada yada. Jam your extra RM600-700 in ASB/ASN account every month even if the dividends “arent great”. Because what’s more important to you at the stage is liquidity. You’ll want to have the option be able to draw on that fund on your way towards that 3M or 6M.

 

[overbat]

@redimi2 Agree with this, OP needs to be liquid now. Once your have 6 months emergency fund then you can start thinking of investing in other assets. For growth, crypto is good returns but you must study up first. Same with all investing, don’t blindly follow the crowd.
Good luck

 

[hollersnhills]

@redimi2 Damn great advice fariddaim

Build your emergency savings first, for security.

Then learn, earn and grow.

 

[skillz1]

@redimi2 Even better option: unit trusts! I can hook you up with CIMB if you’d like

 

[gtfox26]

@kars Congrats on securing a work during such a difficult time.

Though some may think it is a bit low and the time is too long, but if you would rent a house near your company, sure you like your job for a reason.

Since you mentioned about Wahed and TH, I think you are eligible for ASB too, just save everything there for maybe a year, and you are pretty much recession proof.

 

[bwo]

@gtfox26 I second this

 

[dailyjob]

@kars 30% saving is already quite good.

No issues I see with your spending - everything is well within range except rent, but as you say location prices are what they are, and at least you have the benefit of easy commute.

Just one thing - if you don't have a car and only occasionally use the company one, where's the RM100 petrol going? That's quite a lot, especially since you don't have a work commute.

Keep saving diligently and put it to work. Open an ASB account stat. Keep 3 months expenses in your bank for emergencies, and the rest port to ASB to grow (can withdraw for less urgent emergencies).

Realistically, you need to earn more to start growing financially. Think about your career path and how you can advance. I would advise against a car right now as your immediate situation is fine.

 

[psalm51mercy]

@kars Good work on managing your finances so well. I wish I started keeping tab of my monies at 26.

Please do look into ASB & ASB loan. It's amazing and make use of what you can get, not all of us are so lucky.

Look into stashaway if you want some background dummy-proof investment going on. If you decide to go for it, PM me for referral link, we'll both get 6 months free cash management.

Try to pick up an add on skillset that you can monetize - copywriting, video editing, coding. But only do it if you have a passion in it. If side projects feel like a chore, they end up costing you mental health points.

Do you have an insurance policy with your work? If so, stick to that for awhile before getting your own.

Other than that, in the long run, try to ask for more pay or switch to a better paying job and think of a side business. That's the only real way to grow your monies.

All the best!

 

[blindautist]

@psalm51mercy I like the asb loan part. It can be amaxing, to take advantage of gettin big initial capital from loan when u dont hv big capital urself.

 

[resjudicata]

@psalm51mercy For asb loan, my thought is that youre paying 3-4% interest from the loan and if muslim then have to pay 2.5% for zakat. Asb dividen has been low ~5% and they dont expect it to rise to what it used to be >8% anytime soon. Arent you then essentially bleeding money if you go with the loan?

 

[blindautist]

@resjudicata Dis actually quiet true. But, zakat only need to pay based on our own money and dividen so the 2.5% should be calculated only on the dividen part so not 2.5% on capital loan.

Also, percentage cannot be the basis in the calculation here cause its different capital. If i get 4% on 1000 i will get 40. But if i get 4%-3%=1% of 10000 i will get 100. Still a win.

However, asb loan still bad nonetheless if you cant afford the commitment monthly.

 

[resjudicata]

@blindautist

But, zakat only need to pay based on our own money and dividen so the 2.5% should be calculated only on the dividen part so not 2.5% on capital loan.

Oh, i didnt know that. I thought if the person make a 200k asb loan then they’d have to pay the zakat for 200k + dividen.

 

[byrightpaths]

@kars How do keep ur F&B so low? Any tips?

 

[kars]

@byrightpaths I only ate maximum 2 times a day and I only drink water. Trying to lose weight by reducing sugar intake. There were instances where I fork out RM700+ a month in F&B but I am sure that is not going to happen again.

 

[timothyd]

@kars Question: are you renting a room or a whole place at RM800? If it is the whole unit, you can consider letting out a room with a friend / another renter to reduce accomodation cost.

 

[kars]

@timothyd A whole place. I think 800 is a fair price for the level of privacy I needed.

 

[pomegranate]

@kars Is it possible to get a mobile plan that can also cover internet? Like I am currently using RM38 celcom package that gives me unlimited calls and 7gb/month.

To echo with others people suggestion:
1. Rental - if you are having the whole unit / room by yourself, you may consider finding a roommate? But understand that privacy is valued differently by everyone, hence only a consideration.
2. Saving - ASB is good, do consider if your line of work has good progression moving forward. You still need to progress in your career first for higher paycheck, which will really help to accelerate your speed to gain financial standing.

And also, thumbs up for the budgeting effort, it is definitely already a step forward, stick to it and you will certainly achieve what you want.

 

[kars]

@pomegranate I am not comfortable using my phone as hotspot. I am online 24/7 so I have this portable modem/router to connect all my devices. Tried few times without mobile data on my phone but carrying portable wifi around can be cumbersome sometimes.

 

[resjudicata]

@pomegranate TuneTalk rm48 with unlimited call and unlimited data