Thursday, 13 October 2011

The Power of Saving - RM1825 A Year

I am interested with the entry posted by blogger ariffshah 'Kuasa Gandaan Dalam Penyimpanan Wang'. I too wanted to share our experienced with money and saving. From how we were in debt and now we managed to control our spending and increase our saving.

I did wrote a post sometime ago about Latte, Our Latte Factor. A simple saving that in the end gave a huge difference in our life. The latte factor had taught us about being discipline, not to spend more than what we earned and patience.

We were one of those youngsters who have problem with credit cards. Yes, that plastic money. Swiping this, swiping that and pay only minimum amout. I don't have credit cards, but my hubby have it. Err.. 4! One day, Mr. Furitheart told me this has got to stop. So we list down the amout and pay it slowly. Until now, we only use 2. We cancelled the other two since we have finished paying it. Yes, main rule. Patience, discipline and remind each other.

Just like the PM presenting Budget 2012, we too have our own household budget. We list down all the important bills we have to pay like car, insurance, fuel, school and grocery. We always put in our saving first before we allocate our balance to other things. We have our main saving accounts which we saved RM1000 and our secondary savings we saved RM800. Our main rule is that, we won't touch our main savings. That is to be used in case either on of us is jobless. The second saving is mainly used for bills that we need to pay quarterly, once or twice a year. Like car insurance.

Let's say we have to pay 1000. So every month we will put aside RM83. We have to pay our car insurances every December, so by the date we are suppose to pay, we already have an allocation for it. No need to crack our heads and redo our budget. I know it's hard for us to take our money one shot RM1000 to pay it all. So, by saving early that gives us the 'un-necessary stress'.

Image credit to google
What ariffshah said in his blog post is true. After 10 years, we will see that this compounding concept is really useful. You have a lot in your savings. Just imagine, if you are 18 years old and saved RM5 a day. You will have RM1825 a year. In 5 years you would have RM9125 at the age of 23. For those who are going to get married, there you go.. you easily have some 'duit hantaran'.

Same goes saving for kiddo's education. We allocated RM50 into his SSPN every month and we also put aside RM100 into his saving account. I started the SSPN since he is 3 years old and his current savings when he started school. I know, it is hard to do this. But, where there's a will, there will always be ways to do it. If you can't start with RM100, RM10 a month is good enough. Better than not save at all right? And it's NEVER TO LATE to start!
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