Why Should You Listen When Your Mother Sets You With A Financial Goal?

Today, we have another reader, Hamizi adopting Envelope/Ang Pow method in segregating the expenses and controlling spending. He is currently working in government sector, and turns 30 this year. During his younger age, he was not exposed to a proper financial management, just an advise from a caring mother insisted him having a savings account. Read on to find out more what he is about to tell us…

The Mistake

As I brushed my mother’s advice off, I started making mistakes. The first one was to a buy new car with 10 years loan for undergraduate scheme under Bank Islam. The monthly installment seemed to be affordable at the time, I served 600 monthly.5 years have passed and I have 5 years to go, sigh.

At that time I did not have a good financial goals, any goal for that matter. I am counting on my government pension scheme for retirement, putting all eggs in one basket, and I do not have any other savings account. Money, as always as it never enough, I find myself out of pocket at the end of the month not knowing where has it gone and how did I spend it.

In the past recent two years, I read an article about one wealthy Chinaman offered his advice for people with net income of 2000 per month. I have adopted the advices to suit my situation and later, I call it the Letter techniques because I put money in the envelopes.

Rectifying My Financial Issues

The letter technique requires you to put your money away in little envelopes, and to divide the income into 5 portions for example:

I have also used another unique technique to force myself save money. It is based on 52 weeks per year. I put 1 ringgit for the first week. Next week I put 2 Ringgit and continue until 52th week. At the end of the year, I should get 1378 Ringgit and I can simply add my investment. However, I have added cents according to number of the weeks. First week I put extra 10 cent instead of only 1 ringgit. At 10th week, I add 1 Ringgit ( it means 11 ringgit for that week). Hence, I will have an extra of 137.8 ringgit.

So, basically this is Hamizi little secret in managing his spending and creating savings. We are just wondering how many more of you are using this techniques and whether it works for you. Leave the comment below or email us about your technique, because sharing is caring.