If you refer back to the previous blog, since the day i receive mine first pocket money i had already started with the 3-3-3 saving method which taught by my parent to me. My formula is :-
- 33%on Emergency fund
- 33% on Leisure fee
- 33% on Daily expenses.
My thought back than was emergency money is equal to saving. Hence, i will continue save to this 30% regardless how much i have put it in. Soon two major problem i realize after i started my first part time work.
Issue 1 : I will tend to withdrawn more from the Emergency fund to use as leisure when my colleague asking me out for hang out for various reason like discuss on new project venture or investment method (Guess i think only those topic attracted me as i did not favorable on gossip or watching sport) at Mamak stall or Starbucks after finish work.
Issue 2 : For odd amount like ten it is difficult for me to determine where should i saving. Sometime instead of saving i will think to spend it off to keep nine then ten (How naive).
For Issue 2 this was easily solved. After i notify emergency fund is not equivalent to saving. Hence, I start my first insurance force saving during the age of 18 with one of my friend who just come out work as part time insurance agent for prudential. Then in age of 19 i was introduce by another friend who invited me to register and invest together in Amanah Saham Nasional Berhad (ASNB) a fixed rate unit trust by Permodalan Nasional Berhad (PNB).
For Issue 1 i solved by using budget control method. Which i share on 24 Jan blog (What you need to do before you start investment? If you interested can visit by this link : http://ourjourney06.blogspot.com/2021/01/what-you-need-to-do-before-you-start-to.html) Where i start to track every single cents by using a note book back in 2005. Soon i found that my finance health from negative turn to positive i am enjoying fun along the tracking. That is reason i keep advise my surrounding of people remember to mark down your expenses.
Since then i had modified my lifestyle my financial flow had become below formula :-
- 20% on Investment fund
- 20% on Emergency fund
- 30% on Leisure fee
- 30% on Daily expenses.
Four online banking management or sharing by other call Four bank passbook management
- Definition : In order for this method to work well for you. You will need to have 4 saving account which set to be automotive transfer on your prefer date.
- Income Account : Function as receiving income and be the place where to store excess money for quick retrieve at ATM withdrawn or online transfer purpose.
- Emergency Account : Ideally to store >6 month monthly income. But for me i only store 6 month fix expenses (such as insurance monthly payment, transportation, meal expenses overall i add in +10% incase any thing happened). One i had achievement this target amount , shift this account to FSMone Money Market fund/fixed income bond fund to help me generate 2% to 5% ROI per annum.
- Investment Account : 50% of income to this account for ETF & Reits Investment (Which i using TD ameritrade + CGS CIMB which i not so active on stock back then). Once i getting the return of investment/dividend payout i will transfer back to Income account and let it auto roll down as preset.
- Expenses Account : 50% of income is in this account. When you have girl friend you will know how important this account is :) Whenever i see there is left over money on 28th of every month i will maintenance the minimum amount inside and transfer the balance back to Income account to let it auto roll down as preset.
In next blog, i will introduce you 6 Jar Money Management to all of you.
Today the quote take away will be : -
"Money will only make you more of what you already are.” - T.Harv Erker
