Basic saving tips for your hard earned money
Saving money that you have earned is always in a person mind. There is no right or wrong on how much one must save. It’s adviceable to allocate 30% to 35% of your hard earned money to your savings for rainy days.
Let me share the basic tips on where you should allocate your savings to.
Have an emergency fund
This fund is used when the economy takes a dives and you loose your job unexpectedly. This fund size should at least equal six months of your current income. This will enable a person to find a job within that period of time.
Personally : My emergency fund size is roughly 8 months of my current income. Anyway, as a free lance blogger i don’t need much of an emergency fund for loosing a job but might need the emergency funds for other purposes.
Life risk fund
Insurance! Everybody has to own a medical plan to cover a person when he or she loses the ability to earn income. It is essential to own an insurance policy. As we know, medical bills are getting sky high day by day. Would you want to see your hard earned money being sucked out by doctors? Definitely not. Let the insurance company work that out for you.
Personally : I have a medical card worth RM 225k at the age of 26 which is enough currently. It might not be enough as my age increases. So cover yourself higher when your age increases.
Yeah my favorite, investment fund
Set a side some of your money for investment on property, equities or event trust funds. This fund must be managed wisely as it will garner returns if you make right choices or decisions. It might be negative if not managed properly.
Personally :To be honest, out of the three tips, i have the highest concentration on my investment fund. At my tender age of 26, i am more interested in high risk investment such as equity as time is on my side. It might turn out disastrous if not properly managed but i am still young to pick myself up again if anything goes wrong. So as age increases, lower down your risk profile. Opt for saver investments like fixed deposit or ASM.
Conclusion
Saving is important and everybody must have a good habit of saving. Start young and practice it consistently it will be fruitful. Slowly but surely!
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