Wednesday, May 20, 2009

Your Lifestyle And Your Retirement Planning

On Sunday, I read an article by Yap Ming Hui on NST online with the title SAVING little for retirement. This great article is an awakening call for those who are still not planning for their retirement. I won't be surprised to know that even those who make hundreds of thousands a year are not saving for retirement. The main reason is as their income go up, their lifestyle also go up. When a person earns 1K a month, he drives a small and economy car just to bring him to his destinations. With only 1K, how to save for retirement? When his salary increases to 3K a month, he's driving a bigger and more expensive car. In the same way, when his salary increases to 10K a month, he'll replace his car with a more expensive model. If he continues, he will not be able to have enough saving for his retirement. 

Yes, as our income level increase, we will need to upgrade our lifestyle. But, do monitor and adjust your lifestyle from time to time according to your retirement planning. It's important to have enough saving for our golden years. Make it a priority to save a portion of our income while we are still in our income generating years as we'll not be working and earning forever. 

As you are getting nearer to your retirement years, you will be grateful for your early saving attitude.

Wednesday, May 13, 2009

Effective Cost Saving Ideas For Your Office - Part 3

Though the retrenchment rate in the US has reduced for April 2009, it doesn't meant that the hard time is over. I believe it will still take some time before the economy bounces back. It's still  a hard time for huge and small organizations to stay afloat.

Why not practise the cost saving ideas below to prevent $$$ from flowing out from your organization?

1) Control New Purchases
Do you really need to buy the new PC set for your staff? Or the old PC still is still functioning for at least another year? By controlling new purchases especially huge purchases, it does help to save cost in an organization.

2) Limit Staff Overtime Claim
Did the Human Resource or Audit Department really check through the staff overtime claim? Do your staff really need to work overtime or they are just taking the opportunity to get extra cash? Make sure, the overtime claim is with valid reason and with approval from department head. Overtime claim not only mean you are paying the staff for the extra works , but also for those additional hidden expenses (electric, water and heater cost).

3) Review Company Functions
Is it really necessary for your organization to organize monthly, quarterly or yearly functions? I meant grand and expensive functions at 5-star hotels. Or, is there a way to trim down cost by organizing the same function at the meeting rooms or company hall? Most important part is to make sure the objectives of the functions are met.

4) Reduce Entertainment Cost
This is another area where staff can misuse the benefits given to them. Give your employees the limit of entertainment cost. And have them verified before they bring their guest for entertainment.

5) Advertisement Cost
During this hard time, consumers are more reserved to respond to advertisement. Review your advertising strategy as advertisement is one of the  most expensive cost paid by mos organizations. 

The above cost saving ideas sound better than retrenchment isn't? You can practise the above cost saving ideas even when the economy is back to the bullish style. Let's build a financially healthy and profitable organization.

Money Lenders - Will You Borrow From Them?

For the past few months, I have been receiving money lenders name cards or brochures on my car wipers, stucked at my car windows, in the post box and in the office pigeon hall. Recently, money lenders signboard has been mushrooming in my small town as well. Almost every month, I see new money lending companies been set-up.

Personally, I am against this money lending business. As, money lending indirectly encourages people to borrow and spend tomorrow's money. And usually, the interest is very high. It's really not worth it.

I  believe, most of those who borrow from money lenders are those who didn't  managed their finances properly and they are not saving for the rainy days. When they encounter urgent and emergency needs, the fastest and easiest way is to borrow from money lenders. When there's no other way to get the $$$, probably the thought on how to pay back is not the main concern. But, there's no free lunch in this world. The amount borrowed must pay back (with very high interest).

So, if you really need the $$$ and you don't have saving, will you borrow from money lenders?

Thursday, May 7, 2009

Malaysia Motor Insurance - Know Your No Claim Discount (NCD)

Earlier this week, I have been asking for quotations for my car insurance renewal. I was a bit surprised how my googling on No Claim Discount (NDC) or No Claim Bonus (NCB) can save me about RM40. 

When I requested for the quotation from one of the local bank, the customer service asked for my car details. Then, she said the amount is about RM417. I was a bit curious as the amount was not as what I expected. I knew about NCD but not really in details. Due to my curiosity, I did some googling on NDC in Malaysia. 

According to Kurnia Insurance website, NCD is s a discount given to the policyholders upon renewal of their motor insurance if no claim is made or arises from the policy for a continuous coverage of 12 months. The discount given is based on a fixed rate provided by Persatuan Insurans Am Malaysia (PIAM) Motor Tariff. The NCD discount for private car in Malaysia as below:

Period of Insurance Discount
First year    0%
After the first year of insurance          25%
After the second year of insurance    30%
After the third year of insurance    38.33%
After the fourth year of insurance    45%
After five or more years of insurance    55%

I called the customer service again and told her that I checked through the NCD claims details and I should be entitle for 45% instead of 38.33%. she calculated again and this time the amount that she gave to me sound reasonable, RM372. I believe, if I didn't asked for the second calculation, then she'll just charge me RM417. Luckily I did some googling. And most importantly I feel good because I learned something new.

So, next time you are planning to renew your motor insurance, check your NCD entitlement. I found that Kurnia Insurance website provides a complete details for motor insurance coverage and even a calculator to calculate the motor insurance premium . Remember to calculate your own motor insurance premium before purchasing the insurance. Perhaps you can save some $$$ from here.

Tuesday, May 5, 2009

Bad Debts - How To Avoid Them?

In recent bad and tight economy situation, I won't be surprised if more and more wage earners are not able to support their current life style with limited monthly income. No matter how hard and difficult your situation is, never allow yourself to fall into bad debts.  

I listed below 4 ways to avoid from falling into bad debts:

1) Review Your Current Life Style
If your can't change the figure of your income, then you will have to change your current life style. Unless you can bring in more money, the easier way is to change your life style to the standard which can be supported by your current income. I know it's not easy, but always think far ahead. By  changing your lifestyle, you wont need to borrow any extra cash from anyone (Credit card, banks, loan shark, money lender, relatives & friends). It's much smarter to live on what you have rather than to live on tomorrow's money.

2) Plan Your Spending
Budgeting is the right word. I believe there are a lot of people out there who does not favour this word -  budgeting. But, in good financial practise, no one can run away from budgeting. Through budgeting, you will have a clear picture of your spending pattern and where your $$$ goes. Most importantly, it will avoid you to spend more than what you have. A lot of us have a visual budgeting (budgeting in our head). The best way would be put down your budget in black&white. You can either write it down in your spending book or list down in a simple spreadsheet. Do stick to your budget because it's meaningless if you have a budget but never bother to take it seriously.

3) Replace Credit Cards With Debit Cards
Yes, change from 'cr' to 'd' cards. If you're someone with weak financial will and hard to avoid temptations, you will be thankful for this smart move. The debit card function is almost similar with credit cards. The main difference is that there's a limit for your spending and most importantly, debit cards will definitely not bring debts to you. 

4) Avoid Taking Bad Loans
What I meant by bad loans are those loan which does not bring benefits to you such as huge car loan and personal loan or bank over draft. It sounds easy to apply and to get approval for these bad loans. But, when come to payment, it will bring you sleepless nights. If you must take a loan, then make sure you the payment is within your budget and remember to make the payment on time.

If you have any other ways to avoid bad debts, do share with me. Let's learn to stay away from bad debts. 

Sunday, May 3, 2009

Financial Crisis - Why Retrenchment Should Be The Last Option

For the past few months, millions of workforce were out of work worldwide. Even those huge and reputable business owners are practising retrenchment, not to mention those smaller and fresh business owners. They said it's a difficult decision but still need to be done. It's a difficult decision for the employer but what about those affected employees? It's a nightmare that they're forced to face.

Retrenchment will only make the financial crisis more severe. When more people are jobless, they don't have income to spend. When they don't spend, the economy will shrink further. When economy shrink further, everyone suffers. It's just like a domino effect.

Personally, I think retrenchment is a very selfish idea. It's the easiest and fastest way to cut down company expenses. But, it's not a healthy way to do so. There are other solutions rather than exercising retrenchment. 

If we are serious to overcome financial crisis, retrenchment should be the last option.