Hi MORTGAGE Review: I Found Out How Much Home Loan I Can Get [SPONSORED]

So you’re thinking of buying a house. Maybe you want it for your own stay, maybe you want to use it as an investment property.

But you don’t know how much the bank is willing to lend to you.

And that’s a problem, because while there are a lot of choices within the property market, you also don’t want to fall in love with a property that is out of your price range. You know how important it is to stay within your budget.

I found the best way to go about this: find out first how much home loan I can get with my salary (*if* I can even get it), AND the banks that are likely to approve my home loan application, BEFORE I even start looking for property.

Find out eligibility first BEFORE look for house

Enter: Hi MORTGAGE’s Home Loan Eligibility tool. It tells you how much home loan you can get from the bank, based on your salary and other factors.

Normal process: Fall in love with a property -> submit loan application -> maybe approbed, maybe get rejected
With Hi MORTGAGE ’s Home Loan Eligibility tool: Find out if you’re eligible -> [If yes] Find house -> submit loan application to banks with the highest chances of approval and best rates

Here’s how it works.

How to Use Hi MORTGAGE Home Loan Eligibility tool

Go to
https://www.himortgage.asia/
. The interface is clean and simple, and the tool is displayed prominently on the main page itself.

Step 1: Enter the amount you want to borrow, and number of years

Step 2: Enter the sector you’re in

Step 3: Depending on your answer, enter your income or salary

Step 4: Enter your current commitments and savings

Step 5: Enter your IC (this is needed for the DSR – Debt Service Ratio check)

Step 6: Find out which bank(s) is likely to approve your home loan application

In the process of doing this Hi MORTGAGE review article, I tested out the platform myself, this is my result. Looks like I have at least 4 banks that I can get a home loan with! You can see that different banks have different maximum loan amounts they can offer, based on their own criteria.

The data is insightful on its own. If I’m ready to start the property-buying purchase, all I have to do is click Proceed and I’ll be connected to a mortgage consultant (it’s like having your own personal banker, said the Hi MORTGAGE team), who will:

Give me my financial character report (see the example below)
Advise me further on the next steps, and
Help me select and compare products.

Hi MORTGAGE’s financial character report will be given to you for FREE upon clicking Proceed. It essentially tells you three things:

1. Your financial character

This tells you how favourable you are in the eyes of bank institutions. If you have a score below 629, you are defined as ‘Fair’ which is deemed as fairly unfavorable by banks. Therefore, you will be facing difficulties to get your loan approved.

If you have scores between 630 to 719, you are defined as ‘Good’ which is deemed as somewhat favourable by banks. But if you score 720 and higher, the world is your oysters. You have the highest chance to get your loans approved.

2. Loan amount eligibility

On this part, it tells you the maximum amount you can borrow from bank institutions to buy a home. The figure is computed based on the amount of income, commitments and savings you put in Hi MORTGAGE’s Home Loan Eligibility tool.

3. Banks comparison

Now here comes the most exciting part: bank comparison. In this section of the report, it tells exactly which banks will most likely approve/reject your home loan application. It also tells you the maximum loan amount you can borrow from them.

Note:
 The accuracy of this report depends on the accuracy of the data (the amount of your incomes, commitments and savings) you put in Hi MORTGAGE’s Home Loan Eligibility tool. So if you want an accurate report, please be honest to yourself 🙂

Hi MORTGAGE ’s Home Loan Eligibility tool offers up to
25 home loan products from 18 banks
, including Conventional and Islamic. If you’re eligible from more than one bank, getting expert advice from a mortgage consultant is definitely recommended, so you can make the best choice possible.

Plus, having access to your own personal mortgage consultant where you can ask anything (let alone online) is a value you cannot get anywhere – except in Hi MORTGAGE. So please take advantage of their tools. Go shop for home loan products first, then only shop for your dream house.

What’s the catch? None, the service is FREE until further notice, so use it while you can. Hi MORTGAGE is paid a commission on successful applications, so there’s no cost to you.

What if you don’t use the tool to find out how much home loan you can get on your salary?

Let’s say you are buying property through the usual route – you found your dream property,
then
look for ways to finance it. The property is within your price range, or so you thought.

You told the real estate agent to proceed, and they are just as excited for you. The next step, they said, is to prepare the paperwork needed to submit to the bank and secure the home loan.

This is where it usually gets tricky.

Home loan rejection is super common (and there’s a penalty for re-applying)

Over
60% of home loan applications get rejected
, and that data is from pre-pandemic times.

What causes the rejection? Maybe you have too much debt, so not many banks are keen to take on the risk. In this case, there is nothing you can do but improve your finances.

However, it could also be the case of applying to the wrong bank. You might choose one particular bank for their (attractive) home loan package, but you may not know
banks have customer preferences, too
. For example:

Some banks are friendlier to salaried employers rather than commission earners or self-employed
Some banks are also friendlier to fishermen/farmers/taxi drivers/micro-entrepreneurs who don’t have monthly payslips.

Some of you may say – so what if one bank rejects your loan? Just apply to a different one.

Unfortunately, there are consequences to a failed attempt. If one bank rejects you,
 it increases the likelihood of rejection from other banks
, too. The common advice is to wait at least 6 months between applications. 6 months!

But that’s not the only reason to avoid applying this way. You might also

Pay more than you should

Imagine getting approved for a home loan – but it’s actually not the best home loan product for you. You actually can get a lower effective profit rate (the Islamic banking term for interest rate) from other banks if you are bothered to check with Hi MORTGAGE’s consultant first.

Without Hi MORTGAGE, it would be a hassle to check and compare 25 home loan products from 18 banks one by one, by yourself. Almost no one does that.

But it’s actually important to compare home loan products. You might get pre-approved by Bank A, B and C. But bank C offers a lower effective profit rate than Bank A and B. You would only know this if you use Hi MORTGAGE and engage with their consultant via WhatsApp.

If you aren’t using Hi MORTGAGE, chances are you will take whatever loan offers that come your way first without ever knowing that it’s actually a little bit more expensive. Comparing and choosing the right home loan can save you thousands of ringgit over the long run!

The smart way to be a property owner

If you’re considering property ownership, go use the Hi Mortgage Home Eligibility tool. Find out first how much loan you can get from the bank and which bank is more likely to approve your loan BEFORE you start the property-searching process, or at least before you or your real estate agent submits the application.

Any questions on Hi Mortgage Home Eligibility tool, or the process? If yes, leave your comments below and they’ll get back to you. For now, feel free to test the tool yourself – find out the price range of properties you can afford and your current DSR health at
https://www.himortgage.asia/
.


The Exact Steps to Do Hibah Amanah ASNB – Estate Planning for ASNB Investors

Hurray, I have successfully submitted the paperwork for
Hibah Amanah ASNB!
 I have completed one of the estate-planning goals on my
2022 to-do list
!

This is wonderful, because I’m not just ensuring my money in ASNB (mostly my ASB investment) goes to exactly who I want, but it will also be disbursed much quicker than Wasiat/Will claim process, which will take an estimated 18 months.

*Note: if there is no estate plan or documents in place, your loved ones will wait for an estimated 3 years to access your funds

You can set up Hibah Amanah for any of the funds in ASNB. However as I did mine for ASB, I’ll be referring to it as Hibah Amanah ASB through out this article.

Now, the process to do Hibah Amanah ASB itself wasn’t hard, but admittedly the paperwork and coordination was a bit tricky. It actually took us a couple of visits and lots of clarifications from ASNB staff before we got it done.

So, I figured might as well compile what I know in one post. Hopefully the tips in this article will help you complete your Hibah Amanah ASB documents efficiently.

Step 1: Complete Pre-Registration on asnb.com.my

*You can also start directly from Step 2

You don’t have to do pre-registration, but you can. To do pre-registration, log into your ASNB account at
https://www.myasnb.com.my/
, select Products > Estate Planning

Next, select Apply Estate Planning and fill up the Pre-Registration document. Have these details ready:

Name of Donee(s) (the person(s) who receive the money)

Their guardians (if they are under 18 years old)

Their IC numbers

Their addresses

Their emails

Their bank and bank account numbers

You might notice 2 options are available:
Hibah Amanah
 and
Trust Declaration
 (or Pengistiharan Amanah).

They are more or less the same thing, except the former adheres to estate planning guidelines for
Muslims
, while Trust Declaration follows estate planning guidelines for
non-Muslims
. Both achieve the same estate planning objective – fast disbursement to whomever you want.

ASNB also has visual guides on how to fill in the pre-registration form – to learn more, go to
Hibah Amanah
 and
Trust Declaration
 pages.

Step 2: Print and fill up these documents

For some reason, my husband managed to complete Step 1 but I couldn’t. I don’t know what happened but my pre-registration didn’t go through, the page kept ‘hang-ing’. So I actually did it the manual way and started from Step 2.

Print out:

Filled-up pre-registration form (if you completed Step 1) OR Application form (PH1A for Hibah Amanah; PH1B for Trust Declaration)

Additional Recipients Form*

Power of Attorney document

*Print this if you have more than one Recipient AND didn’t complete pre-registration form. You need 1 Additional Recipients Form per 1 additional recipient

Where to find ASB hibah forms

You can find all the ASB hibah forms in the download section in both the
Hibah Amanah
 and
Trust Declaration
 pages. You can also get these documents at the ASNB branch.

Step 3: Get signatures AND collect certified true copies for identification documents

Steps 1 and 2 are fairly easy. Now this is the mafan part – coordination with the people involved. You need to get signatures AND collect certified true copies of identification document from:

Yourself

Recipient(s)

Guardian(s) (if applicable – only needed if Recipient is under 18 years old)

2 Witnesses (This is for Hibah Amanah/ Muslims only – they must be male Muslim over 18 years old and of sound mind)

Getting everyone’s signatures is simple enough – you can just meet up with the papers you printed in Step 2.
However, Recipients, Guardians and Witnesses must get their identification documents certified themselves. You cannot do it for them
.

Who can certify identification documents?

To turn a photostate IC copy into a certified true copies of identification document, Recipients, Guardians and Witnesses must bring their IC copy to any of these people and request to get it certified:

ASNB Officer/ASNB Agent

Headman/village head (including the Community Leader/Tuai Rumah for Sabah and Sarawak)

Orang Asli Affairs officers

Human Resource officers

Government Officials from the professional and management group (“of they are DG41 and above, they can certify” – said the staff at ASNB branch)

(Annoyingly, most of these people are only available during work hours.)

The Recipients/Guardians/ Witnesses are busy. What are my options?

When I went to ASNB Branch, the staff gave these options:

Recipients, Guardians and Witnesses to meet any of the people mentioned above, complete and pass you their certified true copies of identification documents, OR

Recipients, Guardians and Witnesses to come WITH you during the in-person appointment for paperwork submission, OR

Recipients, Guardians and Witnesses to lend you their IC temporarily when you go to the branch for your appointment (most convenient option)

(In case the last one is not technically allowed, I’ll take one for the team and say no one from ASNB told me about it. It came to me in a dream)

Pick whichever option that works best. In any case, you can use the box below as reference. Put a ‘tick’ when you get it done, and ignore the boxes with N/A.

Documents
Printed/ Photostated?
Filled and Signed?
Certified True Copy / Come to ASNB / Bring their IC?
Pre-registration form / Application form + Additional Recipient form (if >1 recipient)
Signatures from Donor, Recipient(s), Guardian(s) (if applicable), Witnesses (if Hibah Amanah)
N/A
Power of Attorney
Signature from Donor
N/A
Donor IC (aka Yours)
N/A
N/A (of course you go ASNB with your IC, duh)
Recipient(or Recipients) IC
N/A
Guardian IC (if applicable)
N/A
Witness #1 IC (Hibah Amanah only)
N/A
Witness #2 IC (Hibah Amanah only)
N/A

(This is why I said the process is easier for non-Muslims – you don’t have the Witnesses requirement, aka fewer people to coordinate with. If you just have one Recipient, you can just go with her/him to the ASNB branch, done.)

Step 4: Book appointment at ASNB branch

As of writing time, the paperwork can only be submitted in-person at ASNB branch. You need to book an appointment, cannot just walk-in. EDIT: According to feedback, you can now walk-in to complete the process

To book an appointment with ASNB, go to
ASNB Contact page
 > Click on your state > Select the branch you want to visit > Click Appointment

Next, select Hibah Amanah / Pengistiharan Amanah, your preferred date and timeslot and your contact details.

Your appointment is booked! They will also send you a reminder email one day before your appointment 🙂

Now simply show up with all documents needed (refer to Step 3 again) and the officer will sort it out. According to my officer, the confirmation documents will be mailed to you ‘in 1 month’.

Promotional Campaign: Reduced fee of RM100 instead of RM180

Now is a good time to do Hibah Amanah ASB. ASNB is currently running a Promotional Campaign – from 20 Feb 2023 until 31 December 2023, the registration fee is only RM100 instead of RM180. Save RM80!

(You can also get the registration fee completely waived if you add RM20,000 in your ASNB fund. The staff said the RM20k must be NEW aka fresh fund, not already existing in account. I asked)

Read the full Terms and Conditions of Pewarisan ASNB Campaign
here
.

Additional FAQs:

#1 – Is this only for Hibah Amanah ASB? Can I hibah ASW or other ASNB funds?

Yes, you can do Hibah Amanah / Trust Declaration for any ASNB funds you have. The requirement is minimum RM1000 in the fund.

#2 – What other Hibah Amanah fees do I need to pay?

Aside from the one-off RM100 registration fee, the following fees apply:

Annual administration fee – RM10

[If needed] Subsequent registration – RM90

[If needed] Add or change recipient/guardian/fund – RM20

[If needed] Revocation – RM70

The other fee you should know is Claim fee, or the fee deducted from your investment balance before disbursed to your beneficiaries. The rate and sample calculation are as per below:

#3 – What if I don’t have enough money in ASNB to do Hibah Amanah?

If you don’t have ASNB investment, or not enough to do Hibah Amanah (the minimum is RM1000), then you can do
hibah takaful
. It’s like life insurance, just RM50 or so per month to leave behind six-figure inheritance.

#4 – I understand Hibah Amanah ASNB is only for ASNB funds. How do I do estate planning for my other money/assets?

The most professional option is to get advice from
financial planner
, who is also able to optimise your financial life for you (go ahead and also ask if your current insurance/takaful is comprehensive or not, whether your investment portfolio diversification is okay or not, etc).

Otherwise, you can read my
Wasiat, Hibah, Trust: 3 Tools to Circumvent Faraid / Islamic Inheritance Laws in Malaysia
 article.

Any other questions? You can refer
Hibah Amanah
 and
Trust Declaration
 pages, or contact ASNB for further info.

Lastly, this article is based on my experience; if there are conflicting information from here and as given by ASNB staff, please follow the latter.


Everything You Need to Know About Hibah Takaful, from a Non-Agent

Heard about Hibah Takaful and how useful it is for yourself and your family, but not sure what it is and where to get it? You’ve come to the right place.

No guilt-tripping or sad stories about husbands not doing hibah for their wife and children here, I promise. I’m not an agent – you do or don’t do, up to you.

Let’s start 🙂

Part 1: Hibah Takaful Meaning

Hibah Takaful is the combination of two words:
Hibah
meaning gift and
Takaful
meaning the co-operative system of reimbursement or repayment in case of loss, as per Islamic or Syariah guidelines.

It’s not quite the same, but the closest equivalent of Hibah Takaful to conventional insurance is probably
Life Insurance
. I’ve seen some people refer to it as Takaful Life Insurance or Life Takaful as well.

Part 2: 4 Scenarios where Hibah Takaful is Useful

Rather than telling you what is included in a Hibah Takaful plan, I’m going to tell you in what situation the product is handy to have. The way I see it, Hibah Takaful is useful for four main scenarios:

Scenario 1 – Pay off debt after your passing

Once a Muslim dies, her/his wealth will be frozen then distributed in this exact order:

Pay burial costs

Pay outstanding debts (house, credit card, loans, to other people etc)

Surviving spouse gets harta sepencarian (many people don’t know this)

(If estate-planning documents are in place) distribute according to wishes

(if no estate-planning documents) remaining wealth distributed according to faraid

Now let’s say one passes away with RM500k in wealth but have outstanding debts worth RM500k.
That means the wealth distribution ends at #2, because the RM500k will be used to pay off the debt.
 Surviving members of the family gets nothing.

SO. It’s not a bad idea to get Hibah Takaful worth at least the outstanding debt amount so that it could be used to pay off one’s debt after passing. The rest of one’s wealth then can be distributed to loved ones.

Scenario 2 – Generational Wealth

You want to leave behind
generational wealth
 but don’t necessarily have a lot of money/assets. Imagine with RM50 or so a month, you can leave behind hundreds of thousands of dollars?? If you do it right, the cost of your children’s education will be secured.

(This is just my opinion, but I don’t really care about the spouse. He or she is an adult, they can find work and survive somehow. But the children… they deserve all the opportunities you can give them.)

Scenario 3

– Make significant donation

You want to make a
significant donation
 or gift to your favourite charity, cause or person(s) upon your passing. Same as Scenario 2, a small monthly sum can result in six-figure disbursements.

Scenario 4
–
Estate planning

You want an estate planning tool that can
bypass faraid
.  If you ask me what is Hibah Takaful’s main advantage, then it has to be this: the gift money will be given
directly
 to the person you want to give to
without
 going through the Islamic Inheritance law system (and lengthy estate planning processes).

For example,

If you have irresponsible male family members and want to ensure female relatives will be taken cared of

If you’re a Muslim convert but still want to leave behind money to non-convert family members

If you have adopted children, who under faraid is NOT eligible to receive inheritance

Then DEFINITELY consider this financial tool.

(Related:
Wasiat, Hibah, Trust: 3 Tools to Circumvent Faraid / Islamic Inheritance Laws in Malaysia
)

Extra ‘bonuses’

This depends on the provider, but some Takaful companies in Malaysia offers Hibah Takaful products which include
total and permanent disability
. Let’s say you got into an accident and your spine broken. Obviously, you can’t work anymore. It’s handy to have some money then, wouldn’t you agree?

Some may also include ‘bonus’ like
Badal Hajj
 – funds allocated to hire someone to do hajj on your behalf, after your passing. I thought that was a nice touch.

So far, everything sounds great right? It sounds like a miracle product, it covers everything! Wait wait. You should also learn what it is NOT.

Part 3: What is Hibah Takaful, and What it is Not:

#1 – Hibah Takaful is NOT the same with Hibah Harta

There are a few types of Hibah. For the purposes of this article, let’s clarify the difference between Hibah Takaful and Hibah Harta:

Hibah Takaful
 = the gift money is disbursed only upon death (or total & permanent disability; the terms vary – check with providers)

Hibah Harta
 = gifting assets
you already own
, such as property, car, money in bank accounts, etc.

#2 – Hibah Takaful is also NOT a Takaful Medical Card

If Hibah Takaful is the Syariah-compliant version of Life Insurance; then Takaful Medical Card is the Syariah-compliant version of (conventional) Medical Card. They may function the same way, but they are technically different products.

Btw, you should totally get Takaful Medical Card too in addition to Hibah Takaful if you can afford it. It is useful to cover hospitalisation costs. The Takaful Provider might allow it as a separate or add-on to your plan.

Part 4: How much Hibah Takaful should you get

So, how much Hibah Takaful should you get? There’s no set rules, nor hibah calculator, but can use this as a guideline:

Amount to cover your debts, PLUS

Amount to leave behind to loved ones (5x to 10x annual expense is what they always say)

So let’s say you have RM100k in debt, and your family’s annual expense is RM80k per year. You should get:

RM100k to pay off the debt, PLUS

Between RM400k to RM800k for your family

So ideally, get between RM500k-RM900k in Hibah Takaful

Your next question may be what’s the price to get that amount?

Your Hibah Takaful quotation depends on a few factors: investment-linked or term, your age, gender, smoking status, etc. But assuming you’re in your 20s-30s, a non-smoker and got term, it could be as low as under RM100 per month.

(It could also be as high as hundreds, even four-figures per month if you’re on the older side, a smoker, and got investment-linked with various add-ons)

Part 5: How to Get the Best Hibah Takaful in Malaysia for YOU

You can get Hibah Takaful through a Takaful Agent, from EPF i-Lindung (
see #2
), or even
directly online
 (most affordable option and my personal preference).

Which option to take? Well if you know a trusted Takaful agent, can get from them. You can find some contacts in the comments section.

If you’ve heard one too many horror stories and want to learn about insurance/takaful first before meeting agent/purchasing your own, take my
How to Buy Your Own Damn Insurance/Takaful course
.

Fact is, there is a LOT of context to protection products, including Hibah Takaful. The 2-hour course will help you understand what you need to know about protection products from consumer POV.

And there you have it. If you know of other options to get Hibah Takaful, especially Takaful online options, please share the info in the comments section so the rest of us can learn!


How Much I Spend On Beauty

Sara of Jewelpie.com recently published how much she
spent on beauty products
. Loved it and was immediately inspired to show mine too!

To be fair, I don’t have a specific category for beauty costs. Most of the time they’re chucked in either Misc Needs or Misc Wants. If I needed those things urgently for an event or something, they’re logged into Misc Needs. If they’re just things I randomly picked up due to shopping mood, then they’re under Misc Wants.

Unlike Sara, I don’t know how much I spent on beauty annually. It fluctuates a lot – most of the time I keep it simple and spend very little, but I also did a RM3,600 dermafiller injection procedure, so that throws the whole annual average out of whack.

Doing things a bit differently, I drew out in my notebook: beauty expenses I spend on with the price range, what I splurge/skimp on, a frugal beauty habit, guilty pleasure and a beauty wishlist.

How Much I Spend On Beauty, A Visualisation

Analysing my beauty spending, I can see I prioritise services more than products. I am most satisfied by the more expensive ones, with the sole exception of eyebrow shaping – the eyebrow threading at Indian beauty shops are amazing and cheap, love them.

As for my makeup, it’s usually quite minimal. I only splurge on two things: sunscreen and eyeliner. Everything else I use regularly – face powder, eyebrow pencil, blush, lipstick, etc – is either cheap drugstore brands or gifted.

I used to buy and use moisturisers, but now my skincare routine is mainly face masks + serum samples. Those little packs last for a surprisingly long time! I love getting them.

Do you know how much YOU spend on beauty expenses? What are beauty products or procedures you can’t live without? What’s in your wishlist, and what’s your guilty pleasure? What do you splurge and skimp on? Share with us!

Also, let me know what you think of the drawing! Don’t know if I should continue making more graphics and showing my notebook entries. See if this post got love or not 😛


The Safest Way to Buy a House, Car or Make Other Big Purchases

Every so often, I’d get these types of questions in my DMs:

Suraya, is now a good time to buy a house?

Suraya, should I buy a car?

How much salary to buy a house in Malaysia?

What kind of car can I buy with RMxk salary?

It always takes me some time to give a comprehensive answer, so I thought might as well write an article about it. Here is the safest way to buy a house, car or make other big purchases. If you satisfy all of the below, chances are you’ll be alright, go ahead and make the purchase.

#1 – You already have enough savings

It’s much safer to make a big financial commitment when you have enough savings than without. How much is ‘enough savings’, though?

It varies from person to person, but I would say, as a guideline,

A minimum of 6 months worth of savings if employed in stable job

A minimum of 12 months worth of savings if self-employed with consistent income

*factor in the cost of monthly instalment/maintenance of the new purchase in your savings calculations

Obviously, the more the better. I would personally feel safer with 24 months of savings.

Next, make sure…

#2 – The monthly payments are well within your 50/30/20 Budget Guideline

Rather than asking yourself how much salary to buy a house in Malaysia, or what kind of car you can get with your salary, you should find out if the instalment amount fits into your Needs category. And you can do this with The
 50/30/20 Budget Guideline
.

The
 50/30/20 Budget Guideline
/Rule is basically dividing your income into just 3 major categories:

50% for Needs

30% for Wants

20% for Savings/Investments

If you’re buying a house and/or a car, they should both be included under Needs, because they are Accommodation and Transportation, respectively.

(Here’s everything that usually falls under Needs)

Accommodation – Mortgage or Rent

Transportation – A travel pass or vehicle (and all its related costs)

Food – Groceries and budget meals

Bills – Electric, Water, Phone, etc

Debt repayment – credit card, personal loan, BNPL

Insurance/Medication

Contribution to Family

Now, let’s say that your income is RM5000 a month. Therefore, 50% for Needs – which combines ALL of the above expenses – should be around RM2500.

That means, if the house or car you’re eyeing costs RM1500 per month in instalments and you’re already spending RM2000 for other Needs-related expenses. This will add up to RM3500 – more than the RM2500 guideline for Needs.

If this is the case, maybe you should continue to
live cheaply
 or look for cheaper modes of transportation for the time being.

Don’t be disappointed if you can’t make the purchase yet.
This is just a ‘not yet’, not a ‘cannot ever’.
 Focus on increasing your income and/or reducing other expenses under Needs and soon enough you’ll be able to afford the accommodation or transportation you want.

Tip: You don’t have to do the calculations yourself. Get the
Editable 50/30/20 Rule Template
 for FREE.

#3 – You have good credit score

Purchase and check your
credit score
 – is it good? The better it is, the better the rates you’ll get. If your credit score is bad, you might want to spend at least 6 months-1 year improving it before making that purchase.

Don’t knock this. For big purchases like a house, even a few 0.x% difference could mean tens of thousands saved in the long run!

You can read about how credit score is calculated and how to improve it in
this article
.

#4 – You’re not being pushed by salespeople

Some salespeople are super persistent. To earn commission, some try to convince you the purchase is the best idea ever and would even follow up daily. They might even use
scarcity tactics
 to get you to take action, and say things like:

Not many units left!

This product very popular, will not last very long!

The discount ends today!

My belief is, if you are unsure about a big purchase, then it’s a no. So what if you miss this one. Other opportunities will come up (often better ones).

But salespeople are easy – all you have to do is
say no firmly
 and they will usually back off. The next one is harder.

#5 – You’re not being pushed by family/loved ones

As I mentioned in my
4 TOUGHEST Financial Situations to be in
 article, some people are unlucky enough to be exposed to Narcissists, Psychopaths and Machiavellians. They are more prone to cheating, manipulating and generally taking advantage of people around them.

That means, these people treat your money (or your credit card, or your ability to take a loan..) as *their* entitlement. They *expect* you to do these things for them.

This is worse if the Narcissists, Psychopaths and Machiavellians are family members, or loved ones. Oh, they would guilt-trip the heck out of you, accuse you don’t love them, accuse you of not ‘paying them back for their sacrifice’, whatever.

Do Not Give In.
 There is no such thing as ‘just get what they want to make them happy’. No. A core part of their traits is never being satisfied. After you buy that house or that car or whatever, they’ll want something else. So you better nip it in the bud.

Suraya wait, you say, my family/loved ones/friends are not actually Narcissists, Psychopaths and Machiavellians. Actually they have good intentions.
They genuinely think a house or a car purchase is a good idea for me
.  It’s a good investment. I’ll get better opportunities. It’ll improve my life.

Then okay, focus on #1-4. But I would suggest doing what YOU think is right for you, rather than what other people think is right for you. They’re not always right. And if they’re wrong – it’s your name on the lease buddy, not theirs.

That’s it. Now answer yourself – should you make that big purchase?

If you read #1-5 and find yourself saying, yeah I think my finances are good, and this purchase is my own choice. Then go ahead and make the purchase – you’ve done enough due diligence and should be alright. Money is meant to be enjoyed anyway, hoard for what.

Alright that’s all I have for you today. Let me know if you have any questions and all the best 🙂


The Real Answer to ‘How Much Should I Spend On A Car?’

How much should I spend on a car? I’ve thought about this question many, many times.

The answer is simple: whatever is the amount, I should make sure that I can
afford
 it. Like every other purchase.

But it’s also not that simple, because if it is, how come
1 out of 4 bankruptcies in Malaysia is due to car loans
?

If you’ve been wondering how much you should spend on a car and avoid it being repossessed by the bank, here are some answers. Thanks to all contributions from the RoR audience!

#1 – How many % of monthly salary to go towards car payment?

How much should a person spend on a car, actually?

Some said 15% of monthly salary just for the car instalment:

Tasya Omar
 –
Ideally, the monthly loan repayment should not be more than 15% of the monthly income. Of course, not everyone gets RM5k as their first salary. If one is disciplined enough to put aside RM800 per month – RM500 for monthly loan repayment, RM300 for the upkeep/ spare parts and whatnot – I think that should be ok.

Some said no more than 1/3 of their pay:

Jonathan Goh
 –
Not more than 1/3 of their pay or the monthly repayment. If people follow the principle of partitioning their monthly wages, they will have enough to cover the petrol and car maintenance.

Let’s say a guy who brings home RM3k after deducting EPF. His monthly car payment should be RM1k. Now if he is savvy he will get a Myvi with a monthly payment of RM800. He now can save RM200 for the car in case of emergencies/auto insurance

Some base it on annual income, too:

bumped to this, perhaps from the monthly earnings, one should able to cope on the maintenance cost etc
pic.twitter.com/SYVMPyt9ih

— 🍰 (@trancedisorder)
April 23, 2019

(Effectively 8.33% of monthly salary for car instalment, and no more than 15% of monthly salary for all car expenses)

Amirah Nazarudin
 – I followed that
the car price can be equivalent to 36 months of your salary, at most.
 I heard this advice after attending a seminar 3-4 years ago. Couldn’t remember who it was.

But to me, a car is a liability. I’ll try not to spend so much on it. Having Proton is good enough. If I do want to splurge I’ll go for Toyota or Honda.

(Effivetively up to 25% of monthly salary for car instalment)

So… it looks like it’s common to spend between 8-33% of your monthly salary on car payments. That looks like an okay amount right? You still have 67-92% of your salary to play around with.

No, not really, because…

#2 – Car ownership costs much, much more than you think

Your car instalment may be as cheap as a few hundred ringgit per month, but you need to pay for a bunch of other stuff too. Depending on variables like your car model and frequency of usage, you have to at least
double or triple the car instalment amount.

You need to pay for the
road tax
. The
car insurance
. The
car service and maintenance and car washes
. The
petrol
 and
tolls
.

Additionally, and unfortunately, car ownership is a major contributor to
unexpected expenses
 too. Throughout the duration of car ownership, many will have to shell out money for major repairs after getting into accidents, to replace batteries and alternators, to fix the aircon, to get new tyres, to settle unexpected summons, and more.

So not only you need more money than you think for car-related expenses, it is essential to have emergency savings.

This prompted this rule of thumb by a RoR audience:

Viknesh Victor Sekaran
 –
My rule of thumb is to only buy the car you want if you wouldn’t think twice about the cost of changing all 4 tyres. For example, Vios continental tyres would cost around RM1k+ to replace. You can get more familiar with tyre prices by Googling the tyre specifications

#3 – The lower the cost of car ownership, the better

So by now you know that if you have RM1000 extra in your monthly budget, you
shouldn’t
 get a car with RM1000 monthly instalment. You should instead get a car that costs, say, half that amount, or even less. Because you’re going to need the other half for the other car-related expenses.

There are two ways to reduce the cost of car ownership:

(1) Get a basic car with minimal cosmetic add-ons

Andaq Fithry
 –
I spend very minimal on the basic. No extra, no accessories, no mods. Extra is want, not need. A
t my age, I don’t want to spend money on strut bars, gt-wings or performance kits. Those are extras. I’d rather spend on other kinds of extras like flood insurance, windshield coverage, etc.

(2) Buy a secondhand car and pay it in full

This works really well if you have savings. By paying for a car upfront and in full, you’re eliminating 5-7 years worth of monthly car instalment payments.

It’s a popular strategy among personal finance bloggers, too. Here are some that I know:

Mr-Stingy
bought a 9-year old Myvi for RM20,000
.

Mimirello
bought a RM12.5k 2004 Kelisa
.

Airy Lil M
bought a RM5,600 Kancil and spent an additional RM2k fixing it up
 (she’s since upgraded her car, to a RM24k Perodua Axia)

You can also combine (1) and (2) – that would significantly lower the cost of car ownership for sure!

#4 – What if the dream car that you really, really want is out of your budget?

My dad is a car guy, and while I don’t understand his love for cars, I know that it’s something that makes him really happy. I like seeing him happy.

I think it’s okay to want your dream car. If you can’t afford it now, then the solution is two words: delay gratification.

These guys suggested saving up and making a huge down payment for the car:

Calvin Boey
 – (To get your dream car,)
delay the purchase by a year or two, place the money aside and put a huge downpayment
.

Samuel Jin
 –
I think owning a car you will really like to drive is important regardless of the price because modern vehicles are depreciating asset anyway.
Save up enough to pay more on the downpayment
 so that instalment won’t be huge burden afterwards.

While these guys suggested avoiding car ownership first:

Moses Francis
 –
Personal take is, if single you no need a car. You can just rely on Grab and trains. I’ve s
old my car and never been happier. I believe the relationship status matters too (with car ownership). Especially if a person is married – they might have some emergencies with kids and can’t rely on Grab or public transports.

Caleb Woon
 –
For me, I used a simple calculation. If the total amount used for public transport and ride-hailing such as Grab is less than the cost of owning a brand new Perodua Axia (petrol, instalment and other fees), then I won’t get a car yet.

Last words

You may think that a car purchase is a practical decision. But let’s not forget it is also an
emotional
 decision.

You may have these thoughts yourself:

I am
cool and edgy
, so I should get that cool and edgy car so everyone knows it (me).

I need
freedom and convenience
. And the ability to go anywhere I want. (me).

I have a
family
. I don’t want people to think I can’t provide for them.

I need to
impress my clients
. A cheap car won’t cut it.

I am
single
. Need to show potential partners that I have money.

All of the above are valid points. The car you choose
does
 reflect your personal identity. You
do
 want your family to be as comfortable as possible while travelling. Some clients you’re hoping to conduct business with
do
 care about wealth and status.

But all of them may also push you to buy a car that’s out of your budget. And cause your bankruptcy.

Instead of ending this article with ‘don’t buy a car that you can’t afford to pay’ tone, I want to ask you this instead: what car do you want and
why
 do you want it? What exactly about it is appealing for you?

Let me know in the comments section. A little bit of soul-searching and self-awareness exercise will do you good 🙂


How to Calculate Your Net Worth (Free Editable Template)

Money is a made-up concept humanity created to assign (approximate and false) value so that trades are easy to conduct, but why not, today let’s learn how to calculate your net worth.

Before we start, a quick one: your net worth is in no way is indicative of your worth as a human being (you’re special, just like everyone else bb). Whether your net worth is high or low, at the end of the day, we will all be buried in the same soil buddy. So it’s like, important, but also, not really.

Cheery intro, isn’t it?

How to calculate your net worth

Net worth calculation follows a very basic formula: Total ASSETS minus total LIABILITIES equals NET WORTH. That’s it.

To illustrate:

Total Assets: RM500,000
Total Liabilities: RM100,000
Therefore, Net Worth: RM400,000

Simple. But of course, there are different types of assets, and different types of liabilities, so that’s the devil in the details that we’re tackling today.

Types of Assets and Liabilities

There are two types of Assets and two types of Liabilities

Liquid Assets
– Cash, investments and items of value that can be
easily converted to cash
Illiquid Assets
 – Investments and items of value that are
harder to convert to cash
Short-term liabilities
 – Debts to pay off in the
immediate future
 (~a few months up to a few years)
Long-term Liabilities
 – Debts to pay off over a
long period of time

Now, what kinds of assets are liquid and illiquid, and what are regarded as short-term and long-term liabilities, you ask? And how do you calculate them in one table?

Net Worth Table (+ Editable Version)

Here you go: an example of a Net Worth Table. See the types of assets that fall into Liquid and Illiquid Assets, and what are considered short and long-term liabilities.

You can find the editable version
here
 – simply make a copy into your own GDrive and add your own numbers.

As a general rule of thumb,

More Liquid Assets = better for weathering financial emergencies (ie No point if you have RM1,000,010 in assets if RM10 is in your bank and RM1 million is the value of the house you’re staying in)
Some Illiquid Assets are hard to appraise, and may be liquidated for significantly less if the owners are desperate for cash
(This is also why I believe in Liquid Investments >>> Other Investments and included it as one of my
Money Rules
)

Note: The calculation of Mortgage and Hire Purchase (under Liabilities) is actually complex and not that straightforward. It is enough that you know the approximate amount you have to pay back. If you
really
 want to know the exact figure, you can
hire a financial planner
.

(This goes without saying, but worth mentioning: you don’t have to do ALL the investments and collect ALL the assets. Just the ones that makes sense and suitable to your knowledge and interest. More info:
3 Best Investments in Malaysia (+ The Best Way to Invest Your Money)

Why calculate your net worth

So what do you even do with this information?

The way I see it, the process of calculating your net worth is good for 3 things:

Good for giving yourself an ego boost (provided you have a positive net worth),
A way to track your wealth-building progress, and
A way to compile all your assets and liabilities in one table, so you don’t miss any

The first one feels hella good, but the second and third one are practical – as mentioned in my
13 Types of Financial Tools I Personally Use
 article, the average person living in the modern world uses more accounts and tools than what they sometimes can track.

I mean, I personally use multiple bank accounts, e-wallets, credit cards, investment platforms, etc. So doing the net worth table is a good exercise so you can list and keep track of everything in one table, while also reviewing your wealth-building progress.

I would suggest you to do and keep your own Net Worth Table, updated every year or so. As they say, what gets measured gets managed.

Net worth calculators in Malaysia

There are two net worth calculators in Malaysia that you can use to estimate your net worth:

Net worth calculator by Malaysian Financial Planning Council
, and
Net worth calculator by AKPK

What’s the difference between these and the table version I gave above? Mine are taken straight from my
CFP Module 4
 textbook and classes, with more emphasis on Liquid and Illiquid Assets.

As a final note, know that it is
very
 common to have negative net worth if one has a lot of liabilities. So don’t be too impressed with people flexing their property or cars or whatever. If they took on debt to finance those items,
their net worth might actually be lower than yours
.

Alright, I’ll end here. Have fun calculating and tracking your Net Worth from here on. Any questions, can ask in the comments section 🙂


How to Calculate Zakat in Malaysia: Zakat Fitrah, Zakat Pendapatan and more

If you want to learn how to calculate zakat, you’ve come to the right place. I’ve been paying zakat diligently and imperfectly for years, learning along the way. In this article, I have compiled what I know so everyone else can learn.

Disclaimer: Not a zakat expert. If any info is wrong or can be improved upon, please share in the comments section 🙂

P/s – in case any of you are muallaf and very new to the concept. Zakat in English is similar to the tithe concept. It’s a type of charity in Islam.

This article covers:

#1 –
Types of zakat in Malaysia
 – did you know there are over 10 types of zakat in Malaysia, if you combine them all!
#2 –
How to pay zakat in Malaysia
 – which zakat to pay, how to calculate zakat fitrah and zakat emas, who to give zakat to
#3 –
2 tips to save money and time

Let’s start with,

#1 – Types of Zakat in Malaysia

According to
Lembaga Zakat Selangor page
, there are 9 types of zakat –
Zakat Fitrah
 for the individual, plus 8 types of
 Zakat Harta
:

Zakat Pendapatan
Zakat Wang Simpanan
Zakat KWSP
Zakat Takaful
Zakat Perniagaan
Zakat Pelaburan
Zakat Emas & Perak
Zakat Padi

However, different religious bodies may use different categorisations. For example,
Pusat Pungutan Zakat MAIWP
 listed 11 types of zakat, which overlaps with some of the above and also includes:

Zakat Saham
Zakat Pertanian
Zakat Ternakan

Zakat Galian

IN ADDITION to that, there is also
Zakat on Digital Assets
. Learn more about Zakat on bitcoin and other cryptocurrencies, including the fatwa and calculations, in the
Cryptocurrencies in Malaysia: Everything a New Investor Should Know
 article.

I know, that is a LOT. There are SUBtypes too, but let’s not go there (
Zakat Pelaburan
 includes ASB, REITs, Bonds, realised profit, unit trust, etc).

I am aware there is a lot of confusion when it comes to paying zakat in Malaysia, even though people WANT to pay, so let’s cover the basics and head over to the next section.

#2 – How to calculate Zakat in Malaysia

The basics of paying zakat are:

Find out which zakat(s) is applicable to you
Calculate how much you owe (if you do)
Make the payment(s) to zakat beneficieries

That’s the super-simplified version. Beyond that the rules are quite relaxed – there is no LHDN version of zakat authority to double-check your calculations or catch you if you don’t pay.

(Although let me remind you paying zakat is wajib, so do you really want to stay in hell for a few thousand years just to save money.)

Let’s expand on each of them a bit more:

 1) Which zakat is applicable to you

Finding out which zakat is applicable to you is easy enough:

Almost everyone pays
Zakat Fitrah
 or Fidyah Tax
If you
earn an income
, you pay
Zakat Pendapatan
 and/or
Zakat Perniagaan
 and/or whichever applies
If you have
savings
, you pay
Zakat Simpanan
 and/or
Zakat KWSP
 and/or whichever applies
To those who have
assets and investments
, you pay
 Zakat Emas
 and/or
Zakat Pelaburan
 and/or
Zakat Saham
 and/or whichever applies
*Except for Zakat Fitrah, you only pay the rest if you meet the income/wealth threshold (‘cukup nisab’) within a time period (‘cukup haul’) and
satisfy all the conditions to paying zakat in Malaysia

2)  How to calculate Zakat and which calculations to use

Generally speaking, it is good practice to
follow the calculations set by the state you live in
.

For example, I live in Selangor, so I:

Use Lembaga Zakat Selangor’s
Zakat Pendapatan Calculator
,
Zakat Simpanan Calculator
, and
Zakat Pelaburan Calculator
 to find out how much I owe,
Learn additional information, like the Nisab amount for the year (it changes annually)
Make the payments to zakat beneficieries

Common problem – zakat calculation is confusing/too hard

Admittedly, calculations on specific zakat can get incredibly complex and some people struggle with the zakat calculators. There are also additional things to know, like
Zakat KWSP
 is only applicable when you withdraw the money, and
the method to calculate Zakat ASB
.

You have three options:

You can contact the zakat collection bodies in your state and ask for clarification, or
Pay extra. Some people simplify it and pay 2.5% on their income, savings and investment and just halal-kan the overpayment
Prioritise the investments that help you calculate and/or pay zakat. See the last section in this article

How to Pay Zakat Fitrah or Fidyah Tax

Zakat Fitrah
 or Fidyah tax is the easiest to pay among all the different types of zakat in Malaysia – there is no calculation, you are given the amount to pay. For example, this was the rate for 2021:

Image credit:
 https://harianpost.my/zakat-fitrah-2021-online/

You’ll see a lot of reminders to pay Zakat Fitrah in Ramadhan, the most sunat time to pay.

Last time it was quite common to pay Zakat Fitrah in person, at the booths they set up in public places, but nowadays it’s very easy. You can pay Zakat Fitrah online, through:

your respective state’s zakat collection portals
bank transfers, or
even through e-wallets!

How to Calculate Zakat on Gold
 (
Zakat Emas
)

Zakat on gold depends on (1) the gold you wear (ie gold jewellery), and (2) the gold you keep (ie e-gold, gold coins, gold bars etc). The rate is different in both instances and calculated separately, but can be paid together. For example, you have and want to pay zakat on gold in 2021:

100 grams of gold jewellery, and
50 grams of gold coins
50 grams of e-gold in a bank

Therefore, your zakat on gold is:

RM0 for gold jewellery (the minimum threshold for gold jewellery is 800 grams), and
RMxxx for gold coins plus e-gold (both totaled 100 grams, which is over the minimum threshold of 85 grams)

IMPORTANT: You need to actually WEAR the gold jewellery. If you don’t wear it at least once a year, then it’s included and calculated under the ‘gold you keep’ quota.

You can refer to this manual to learn how to
calculate zakat on gold
.

3) Who are the zakat beneficiaries

People/bodies who are eligible to receive zakat are:

(1) the poor,
(2) the needy,
(3) new converts,
(4) the debt-ridden,
(5) those in bondage (it used to refer to slaves, but now interpreted figuratively),
(6) Islamic causes (build mosques, etc),
(7) the wayfarers (people traveling and without resources, like refugees fleeing a country), and
(8) zakat administrators (people who distribute)

From what I’ve learned, it is okay to just give it directly to people in one of those eight categories. It is permissible. However it is better to sedekah what you can instead and channel your zakat to (8) zakat administrators.

In Malaysia, zakat administrators are, but are not limited to state collection bodies. They are:

Zakat collection bodies in Malaysia, according to state:

Selangor –
Lembaga Zakat Selangor

Wilayah Persekutuan –
Pusat Pungutan Zakat MAIWP
Melaka –
Zakat Melaka
Pahang –
Pusat Kutipan Zakat Pahang
Perlis –
MAIPs Zakat
Johor –
Majlis Agama Islam Negeri Johor
Negeri Sembilan –
Portal Pembayaran Zakat Negeri Sembilan
Perak –
Majlis Agama Islam Perak
Kelantan –
Majlis Agama Islam Kelantan
Terengganu –
Majlis Agama Islam Terengganu
Kedah –
Lembaga Zakat Kedah
Pulau Pinang –
Zakat Pulau Pinang
Sabah –
Bahagian Zakat dan Fitrah Majlis Agama Islam Sabah
Sarawak –
Tabung Baitulmal Sarawak

*As far as I’m aware, you can pay your zakat online at all of these portals, via bank transfers. You can go and pay in person too of course.

That brings us to the next section-

 #3 –
2 tips to save money and time when paying zakat in Malaysia

If you have to pay zakat anyway, why not optimise it right?

Tip #1: Claim zakat as tax rebate in Malaysia

For practical reasons, I pay my zakat to zakat administrators because they can do the distribution on my behalf… and also because I can claim the zakat payment as tax rebate.

If this is new info for you, I just want to confirm that yes, you can. So let’s say your payable Zakat amount was RM800, and your income tax was RM1000. After deducting zakat payment, you only pay the remaining RM200.

The most efficient way to do this is:

Pay zakat in December, after you add up your income for the whole year (also works if you pay zakat on monthly basis, via automated salary deduction or manually)
Get and keep the receipt (important)
Deduct the amount from your payable tax amount when you file for income tax in the
following
 year
Example: the receipt for zakat paid in 2020 can be claimed as tax rebate during income tax submission in 2021

Make sure to get a receipt

Take note though,
not all zakat beneficiaries can provide a receipt for zakat payment
, so you need to check. As a general rule, zakat administrators at state level will issue a receipt upon zakat payment.

Other options that give receipt upon zakat payment includes:

UNHCR Zakat Fund
 (reader-suggested; I’ve never tried myself), and
Global Sadaqah
 (pick the one tagged Zakat Eligible; I’ve done this option)

Tip #2: Choose investments that pay zakat on your behalf

Tip #2 is for those of you who want to pay Zakat Pelaburan perfectly but find the calculation confusing. If you keep your investments here, you don’t even have to know how to calculate zakat, they will do it for you.

Investment platforms that pay zakat on your behalf:

Tabung Haji,
AHB (Amanah Hartanah Bumiputera)

You don’t have to worry about paying zakat for both these investments because they will automatically calculate and pay on your behalf.

Investment platforms that help you calculate zakat:

Wahed Invest. They will send you an email telling you the amount you owe, so all you have to do is pay. I covered this in a section in my
Wahed Invest Review
 article (use ‘surbin1’ to get RM10 when you open an account).
ASNB
 funds, including ASB. Download MyASNB app’s new zakat calculator feature to automatically calculate how much Zakat ASB you owe

Do you pay zakat? What other tips and advice can you add?

As a Muslim, I’m generally OK with paying zakat in Malaysia. I was told early on that as much as I try to generate halal income, some of my money will not be halal due to imperfections in the system. Therefore I accept it as a responsibility, plus I believe it’s a way for me to ‘cleanse’ my earnings.

However, my methods and knowledge here are in no way perfect, so I’d like to ask the more enlightened among you for additional tips and advice that can make zakat payment easier and more convenient.

Thanks in advance 🙂


How to Say No to ‘Can I Borrow Your Money?’

‘No’ is a complete sentence, but I also understand its nuance within the context of Asian culture: rejection. A social faux pas in our ‘save face’ culture.

Therefore, learning how to say no without actually saying no is something that I had to learn organically, through observation and experience. My (Western-centric) reading materials certainly didn’t teach it.

And combine that with my natural leaning towards ‘agreeableness’ trait (as per
Big 5 Personality Trait
), which values harmony and peacekeeping over being confrontational – if I didn’t learn how to say no, I would have just agreed to almost every financial request out there. Women take note, because many of you tend to have this same trait too.

Obviously that wouldn’t have been a good financial move. So I’ll just go ahead and say this:
 to be good with money, you have to learn how to say no.

Financial requests you should learn to say ‘no’ to

From personal and online conversations, some financial requests that you should learn to say ‘no’ to include:

Can I
borrow money
 from you?

Buy this
 (product or service), we friend right

Can you do this (
thing that requires financial/time resources
) for me (for free)?

This item is
benefitting a person of your (position/salary
/etc) (so you should spend to do the same too)

Come to my event
! (of which you are expected to pay/contribute financially)

Donate
 to (charity)! If you’re not part of the solution, you’re part of the problem!

Can you
co-sign this loan
 for me/ be my guarantor? (DO NOT. NEVER)

Look, I’m not saying you should ALWAYS say no. Except to that last one, the loan one. Never, unless family member and in super specific situations.

Support a friend’s business. Donate to your favourite charities. Attend your friend’s celebration.

I’m just saying you have to be selective with your yesses, because you, along with 99% of people on this planet, do
not
 have unlimited wealth.

The non-exhaustive list of phrases that means no

If they want to borrow your money,

I’ll think about it

I’m building my (emergency/house/wedding/business/etc) fund

I’ll send you work opportunities when I see them

I need to pay back my own loans

You can sell your [item]

I can only spare (a small amount that you don’t mind to give away – if they pay it back, good. If no, hey its worth it to remove that kind of people from your life)

If they want you to buy something,

I’ll think about it

I don’t like the style/colour/size/whatever

I’ve been decluttering

Let me get another quotation

I might have already bought that, need to check

I have a similar one at home

Do you have anything within the RMxxx range instead of RMxxxx?

Will discuss with my partner

If they want you to attend an event that you can’t afford to go/not within your budget,

I’m not available on the date

I’m not in the area

I’m working on the day

I’ve made other plans

If they want you to do something for free,

I’m working on the day

Okay, transfer me (a suitable amount) and I’ll do it, I can do with the extra income

Here are some freelancing platforms, they have what you’re looking for

Here’s a company that can help you with that

If they want you to donate,

I’ve pledged my donations to another organisation

Yes, of course I care. I’ll look for volunteering opportunities

What is the organisation website? I’d like to do a background check first

Quick note about persistent people

Most people, in most situations, will get it. If you use any of the phrases above, they’ll back off.

Most people. Not all.

Some are persistent, either they
lack understanding of social cues
, or were
brought up differently
 (leading to them feeling entitled to your money/ time/ resources), or are simply
not allowed to give up
 until they get a firm ‘no’ from you (this was my instruction, back when I
worked in telemarketing
).

On that last category, some people – especially salespeople – are also
trained in sales closing tactics
, where they are told things like ‘
50% of sales happen after the 5th contact
‘ (
source
). In a way, they do want to wear out your maybes UNTIL you give a yes (or a no).

So your last resort? This phrase: ‘My final answer is no. Thank you for your understanding’.

Repeat it if you have to. Over and over again.

Last words

I know of people who got into financial trouble because they didn’t learn how to say no. They co-signed personal loans and house loans. They lent money they needed for essentials. They fought with their spouses (some got divorced).

All because they couldn’t say a two-letter word.

As an ending note, I’d like you, dear readers, to share additional tactics and strategies and phrases that you have done to navigate tricky financial requests. Share with us what have you learned from experience. How do you say no – any other useful phrases not covered here? Tell us in the comments section below.


This Income Tax Calculator Shows What You Owe LHDN [2023 Updated]

Do you know how much you owe LHDN for income tax?

It’s ok, most people don’t. That’s why it’s a good idea to use an income tax calculator in Malaysia before submitting your actual income tax. This is good practice, whether you are a first-time taxpayer or if you have been doing your own taxes for a while.

Which Malaysia Income Tax Calculator to Use

There are a few income tax calculator in Malaysia but my favourite is
KiraCukai.my
. Simply input your data and it will automatically calculate your tax payable amount.

*Do note that the final amount may be different from your actual tax payable amount – so only use this tool to guesstimate rather than get the true figure.

This Malaysia income tax calculator is pretty straightforward, but the accuracy of your income tax guesstimate (lol) depends on the data you provide, which admittedly contains a lot of variables.

However, the basics of it are:

How much you earn –
 Your total income is your annual salary (plus benefits-in-kind, if any) or business profit (sales MINUS expenses) or both, combined.

Note: Some sources of income are not subjected or partially subjected to income tax. Also, you may already pay income tax via PCB (Potongan Cukai Bulanan) – in which case, check if you’ve OVERpaid so you can get refund

Learning which tax reliefs you can claim
 – see #2

Deducting tax rebate
, if any

Because there are a few areas to cover, I’ve divided this article into a compilation of guides covering most-asked questions on paying income tax in Malaysia. Let’s start with..

#1 – For First-timers (Basic Knowledge)

I’m listing here multiple guides and videos suitable for first-time taxpayers in Malaysia. Start here if you’ve never submitted income tax your whole life.

Opening your account for the first time:

How to File Your Taxes for the First Time
 – RinggitPlus

2022 Malaysia Income Tax e-Filing Guide For Newbies
 – CompareHero

Personal Income Tax e-Filing for First Timers in Malaysia
 – MyPF

How much is taxable income in Malaysia for Year Assessment 2022:

According to
LHDN Income Tax Rates page
, the chargeable income tax in Malaysia for Year Assessment 2022 follows the following table:

Category
Chargeable Income (RM, Annual)
Calculations (RM)
Rate %
Tax (RM)
A
0-5000
On the First 5000
0
0
B
5000-20000
On the First 5000
Next 15000
1
0
150
C
20001-35000
On the First 20000
Next 15000
3
150
450
D
35000-50000
On the First 35000
Next 15000
8
600
1200
E
50001-70000
On the First 50000
Next 20000
13
1800
2600
F
70001-100000
On the First 70000
Next 30000
21
4400
6300
G
100000-250000
On the First 100000
Next 150000
24
10700
36000
H
250001-400000
On the First 250000
Next 150000
24.5
46700
36750
I
400000-600000
On the First 400000
Next 200000
25
83450
50000
J
600001-1000000
On the First 600000
Next 400000
26
133450
104000
K
1000001-2000000
On the First 1000000
Next 1000000
28
237450
280000
L
Exceeding 2000000
On the First 2000000
Next Ringgit
30
517450
…….

What does the table mean??

The table shows how much in taxes you are charged based on your income bracket. It’s important to remember that y
ou’re not taxed a flat rate
 – ie you don’t pay 13% on RM60000 annual income earned. Rather, you’re charged this way:

Scenario 1

Let’s say your chargeable income for Year Assessment 2022 is
RM80000
. Therefore, your taxes are:

The first RM70000 of your chargeable income (category F) = RM4400

The next RM10000 of your chargeable income = 21% of RM10000 = RM2100

Total tax payable = RM6500 (before minus tax rebate, if any)

Scenario 2

Let’s do another example. Say your chargeable income for Year Assessment 2022 is
RM65000
. Your taxes are (before minus tax rebate):

The first RM50000 of your chargeable income (category E) = RM1800

The next RM15000 of your chargeable income = 13% of RM15000 = RM1950

Total tax payable = RM3750 (before minus tax rebate, if any)

However, you don’t have to memorise all this 🙂 Simply use the income tax calculator in Malaysia that I recommended,
KiraCukai.my
 and it’ll automatically give your income tax guestimate. This section only applies if you want to calculate your income tax manually.

Helpful videos:

10 Perkara Wajib Tahu Tentang Cukai Pendapatan
 – LHDN

#2 – Knowing all the tax reliefs that you may be eligible for in 2022

After you learned the basics, now you can optimise your income tax filings so you don’t need to pay more than you should. A resident individual is eligible for many types of tax relief.

Click here for the
List of Tax Relief for Residential Individuals Year of Assessment 2022
 by LHDN, or refer to the image below.

The majority of tax relief is more or less the same most years, but they might add on or adjust some categories, so you just have to keep yourself updated. For example:

SSPN contribution used to be maxed at RM7000 – now it’s RM8000

Domestic travel – up to RM1000

In any case, it’s good practice to know the tax reliefs applicable to you and keep the receipts for at least 7 years. Digital copy works too.

#3 – For very specific situations

Tax computation for sole proprietor in Malaysia (freelancers/self-employed):

Now, I mentioned earlier that business owners must declare business profit as income, which is your sales MINUS expenses.

If you have a business (even small scale or side hustles alongside main job), you MUST register it as a company if you want to claim business-related expenses. Depending on your nature of business, you can register as Sole Proprietorship, Limited Liability Partnership or Company.

For many small-scale online businesses in Malaysia, Sole Proprietorship (single owner) or Partnership (more than one owner) is enough, and the cheapest option.

(According to one tax professional I consulted, don’t do Sdn Bhd when you first start out. Only consider Sdn Bhd if you make more than RM150,000 per year (can get better tax rate).

More info:

#DigitalCareers: How To File Your Income Tax As A Freelancer
 – CompareHero

What Bloggers, Influencers and Freelancers Need To Know About Taxes in Malaysia
 – David Wang (I co-edited this)

How to File Income Tax For Your Side Business
 – RinggitPlus

Tax computation for
sole proprietor in Malaysia
(
other additional sources of income):

If you earn from rental income –
Remember To Claim Your Rental Income Tax Exemption
 – iMoney

If you earn from trading (including crypto trading) –
Active Cryptocurrency Traders Are Required To Declare Their Gains For Income Tax
 – RinggitPlus (Note: ALL active traders need to pay income tax, not just crypto traders. You trade stocks, trade forex, you pay)

Clarification and exemptions for employment income and benefits-in-kind:

If you are upper-management in MNC or similar, check if the perks you get from work are taxable.

Women returning to work after career breaks of at least 2 years are also exempted for up to 12 consecutive months.

Employment Income section
 – PwC Malaysia

If you got audited:

If you get unlucky, and LHDN feels like something isn’t ‘right’ with your tax submission (or nonsubmission), they might audit you.

What Do You Do When You Get Your Income Tax Audited?
 – iMoney

For Muslims:

Zakat is a type of tax rebate.

How to Calculate Zakat in Malaysia: Zakat Fitrah, Zakat Pendapatan and more
 – RoR

For unemployed:

Tax Tips For Employees Who Lost Their Jobs Or Get Retrenched
 – iMoney

#4 – Comprehensive Income Tax Guides

And last but not least, here are more in-depth guides for those who want to learn the different terminologies in greater detail. You don’t *need* to read these comprehensive guides to file your taxes, but they are great for supplemental information.

2022/2023 Malaysian Tax Booklet: Personal Income Tax
 – PwC

Tax Filing 101
 – Multiply by Creador Foundation

Malaysia Personal Income Tax Guide
– iMoney (image below)

Any other questions about income tax?

Are there any other questions not answered about paying income tax in Malaysia? Let me know in the comments section!

(If you have overly complicated questions, might as well ask LHDN yourself for the surest answer. Call the LHDN Hasil Care Line at 03-8911 1000 or email them from
here
)


At 22, I Bought Medical Insurance for RM113.33. A Similar Plan Now Costs RM59.80 [SPONSORED]

In the early 2010s, 22-year old Suraya got herself medical insurance as her first protection product. She started paying RM113.33 per month for a medical insurance that comes with RM190,000 annual limit*.

(*Annual limit is the maximum amount the insurance will pay in one calendar year. For example, if my medical bill comes up to RM190,010, then I will have to pay RM10 out of pocket – the rest are covered)

Fast forward to 2022, a 22-year old non-smoking woman only has to pay
RM59.80 per month for medical insurance with RM150,000 annual limit
under the
Tune Protect PRO-Health Medical
 plan.

RM59.80! That’s near half of what I paid! I could have saved more money if this plan was available back then.
I could have had more fun.

Why did I Get Medical Insurance as My First Insurance?

To be honest, I wanted comprehensive insurance from the get-go. I knew getting protection was one of the most responsible things to do when I became an ‘adult’ (aka graduated from school, entered the workforce, yada yada).

Back then, there was no such thing as buying insurance online, and no way to know the price unless you contacted an agent. So I contacted one  and asked him to quote me the most comprehensive, all-in plan possible.

The quotation came: over RM500 a month.

My heart dropped. I could NOT afford it, not on my small salary then. So my agent asked me to re-prioritise – what am I most worried about?

I said, my biggest worry is suddenly being admitted to the hospital, presented with a huge medical bill and depleting my parents’ retirement savings. I don’t want to be a burden to them, they have already sacrificed so much for me.

Ah, then perhaps you can start with stand-alone medical insurance, he said.

That’s why I got medical insurance as my first insurance. Of course, the other types of protection – life, critical illness, personal accident and the rest – are all important too, but I had to prioritise.

Strategy: If You’re On A Budget, Get Some Coverage First & Upgrade as You Go Along

I believe the hard part about buying insurance is this: wanting the best plan and coverage, but budget constraints (who doesn’t have this?) forces you to pick a good enough plan for now, and upgrade as you go along.

That’s what I did. I got medical insurance first and started paying RM113.33 per month for it. Over the years, as my income grew, I slowly added other types of protection as I could afford them, and upgraded my existing plans.

(It is recommended to review your protection plans every few years anyway)

Don’t let other people scare you into thinking you MUST get the best medical insurance possible with the highest annual limit (RM1mil and more) OR NOTHING.
This isn’t helpful.

Good enough coverage that suits your budget is better than no coverage.

Sure, there’s a chance something *might* happen to you and you get hospitalised and the bill comes up to six-figures. But these instances are
rare
. Outliers. 0.001% of cases.

According to the Tune Protect team,
the average and median claim for medical insurance is only RM12,000
. Chances are, *if* anything happens, RM30k-150k coverage is enough to cover it.

Again: if you’re on a budget, get some coverage first. You can always upgrade later (though not always – but again, these are statistically rare cases).

What does medical insurance cover anyway? What am I getting? What am I NOT getting?

I have spent countless hours learning about medical and health insurance/takaful from individual agents, my year-long CFP course, the Life Insurance Association of Malaysia website and directly from the folks at
Tune Protect
 themselves.

There are a lot of things to know before getting medical insurance, but these are your MUST-KNOW information, divided into three parts:

Part 1: What medical insurance covers

Part 2: What medical insurance DOESN’T cover

Part 3: Why medical and health insurance/takaful prices WILL increase

Let’s go!

#1 – What Medical Insurance covers

Medical insurance pays for your hospitalisation and surgical bills. That means, if something happens and you require admission to the hospital, you may worry about your health but at least you don’t have to worry about paying the bill (subject to what’s covered in policy).

Different insurance/takaful providers may offer variations in their medical insurance products, however arguably the most important details are:

Annual limit
 – You will see a wide range, from RM30k to RM1.5mil and above. Higher is technically better, but some coverage is better than no coverage

Lifetime limit
– unlimited is best

Inpatient vs outpatient
 – Simplistically, inpatient means you must stay in hospital (serious case) while outpatient means you can be treated at home (not as serious). The former is more expensive and should be prioritised over the latter.

Uncovered conditions
 – some conditions that are usually not covered include pre-existing conditions, pregnancy-related conditions, accidents due to high-risk activities, plastic surgeries, mental illness and more

Standalone or rider
– You can get medical insurance on its own or as an add-on to your life insurance/takaful plan

There are more details of course, but I’m just listing what I think are the most important ones. All the variables will affect the price, so do look for the best possible combination for your budget rather than the lowest possible price.

I’ll give you an example. Here is my quotation from
Tune Protect PRO-Health Medical
, based on personal details:

35 years in next birthday

Female

Non-smoker

You can see that:

Annual limit: RM30,000-RM150,000

Lifetime limit: unlimited (found this info in the policy document)

Inpatient vs outpatient: Inpatient (unless stated on product page, assume inpatient)

Standalone or rider: Standalone (rider means you HAVE to take life policy also)

Daily room and board: RM150-RM250 per day

My quotation for RM30,000 annual limit plan: RM46.19 monthly / RM527.85 yearly

My quotation for RM150,000 annual limit plan: RM65.45 monthly / RM748.00 yearly

Extras: Cashless admission; Mosquito-borne disease allowance; Alternative & Chiropractic treatment; Daily government hospital allowance; Medical report allowance

Note: My quotation =/= your quotation
. As a general rule, your quotation will differ based on your gender, age and smoking status. Older and smoking males will be quoted the highest premium.

#2 – What Medical Insurance DOESN’T cover

“I took medical insurance but they didn’t cover for…”

It’s annoying, isn’t it, when the product doesn’t work as you thought it would?

However, in this case, chances are your claim was denied because
what you are claiming for is instead covered under another type of medical and health insurance/takaful, and not under medical insurance
. After all, medical insurance is just one of four types of medical and health insurance/takaful.

Let’s do a simple ‘is this a medical insurance’ table.

Is this medical insurance?

Medical and health insurance/takaful
Is this medical insurance?
1) Hospitalisation and surgical insurance/takaful provides reimbursement of
actual medical expenses incurred in the event of hospital treatment / surgery for covered conditions.
 This amount is subject to the annual or lifetime limit fixed by the product plan.
Yes, this is medical insurance
2) Dread disease, or critical illness insurance/takaful provides a specified
lump sum benefit upon the diagnosis of any of the 36 listed conditions specified in the policy
such as cancer, heart attack, stroke, kidney failure etc, or actual undergoing of a surgical procedure such as coronary artery bypass surgery, heart valve surgery, brain surgery etc.
This is critical illness insurance/takaful, NOT medical insurance.
3) Disability income insurance/takaful
covers a portion of your income
 in the event that you are displaced from work when stricken with an illness or an injury.
This is income replacement, NOT medical insurance
4) Hospital income insurance/takaful
pays a specified sum of money per day of hospitalisation for any covered illness, sickness or injury
. This amount is subject to a maximum number of days per disability.
This is daily income benefit, NOT medical insurance

Source:
Part 1 of MHIT education article series by LIAM

As you can see, a medical insurance ONLY pays your hospitalisation and surgical bills, and DIRECTLY to the medical service provider. You DO NOT get any other lump sum or cash money, unless specified OR if you purchased other types of medical and health insurance/takaful as well.

#3 – Medical and health insurance/takaful prices WILL increase

Unfortunately, it is highly likely that the price of your medical insurance and other medical and health insurance/takaful will increase every few years.

This will happen to everyone. To me as well. Remember I said I got my medical insurance with RM190,000 annual limit for RM113.33 per month? Well, I’m paying RM170 for it now. Exactly the same plan, just higher price.

The reason for that is due to this annoying thing called medical inflation.

Medical inflation in Malaysia is high. VERY high.

You must know that insurance and takaful companies don’t want the increase to happen. Customers hate it.

However, takaful/insurance providers have no choice but to do it, because according to Bank Negara Malaysia’s
Managing Medical Claims Inflation document
, the
medical inflation rate in Malaysia
 in 2019 alone was 13.2%.

13.2%!!

Yes, 13.2%! That is a VERY high number. If it goes on, and it likely will, that means the average medical claim will double in around five and a half years (using the rule of 72).

To put that into context, the same procedure that costs RM50,000 in early 2023 will cost:

RM100,000 by mid 2028

RM200,000 by early 2034

RM400,000 by end of 2039

So do you see why insurance/takaful companies had to reprice 4.5 million certificates/policies between 2016-2019? They can’t afford not to.

In conclusion: Just get whatever you can afford right now

Fact: Many Malaysians are underpaid. Chances are you can’t afford to spend hundreds on insurance right now. Many Malaysians also lack time and expertise to research insurance and compare quotations and all that.

Remember –
whatever you can get on your budget, which you can realistically afford to pay every month is good enough
. If you can only afford RM50 or so right now, go for the RM50 per month plans.

I didn’t have the RM50 per month plan when I was 22, but you do. You can get affordable insurance and microinsurance directly from insurance/takaful companies. Getting a quotation is so much easier – just key in some basic details at
Tune Protect PRO-Health Medical
.

As someone who took weeks to find my own medical insurance last time, let me just confirm the convenience of online products. Purchasing takes just a few minutes. No hassle, no long forms to fill, no endless questions or 3rd party.  You can even get a 15% immediate discount too!

TuneProtect in particular takes customer journey and convenience seriously and implements the 3-3-3 Brand Promise:

3 minutes to buy

3 hours to reply

3 days to receive claim upon approval

To make your life even more convenient, download the Tune Protect app (available in Google Play & App Store) to easily manage your policies, make claims,
access your e-medical card
 and locate panel hospitals quickly. PRO-Health Medical is eligible for income tax relief.

‘Med’ About Health Campaign [ENDS DECEMBER 2022]

If you purchase
Tune Protect PRO-Health Medical
 before the end of December 2022, you are
guaranteed
 to get a RM80 Decathlon e-voucher for FREE.

If you are extra lucky, you may also win an Apple Watch worth RM1,899. Learn more about this campaign
here
.

Hope this article helps you. If you have experience with medical insurance, and have additional tips to share, please leave a comment below 🙂 If you’re travelling soon, make sure to get
travel insurance
.


(At Least) 17 Money Calculations You’ll Make In Your Life

Throughout your personal finance journey, you’ll inevitably do some money calculations.

For some people, this thought stresses them – their immediate reaction is ‘I don’t want to do it! I’m not good with numbers!’

I blame high school maths. I think it made many people think that these money calculations are harder than they actually are.

I’ve compiled here some money calculations. Go through them, and tell me – how many are *actually* hard for you to do?

1.
Home Loan Calculator

You do this calculation when you’re starting to shop around for a property, to find out the estimated mortgage / home loan repayments per month that you’ll have to make.

There are many versions, one example is below:

(Pics are from
PropertyGuru’s Mortgage Repayment Calculator page
)

Toggling the variables – loan amount, interest rates and loan term – can be a fun/scary process. Longer loan terms have lower monthly repayments, but you’re also ‘bonded’ for much longer.

2.
Car Loan Calculator

To calculate the monthly instalment of a car purchase.

Related:
The Real Answer to ‘How Much Should I Spend On A Car’

3.
Personal Loan Calculator

When you want to borrow money for personal reasons, from wedding financing to home renovation to funding a business and more. Also kind of similar to car loan calculators but the terms can vary quite a bit – you could pay A LOT in interest if you’re not careful.

4.
Instalment Plans

Many credit cards offer the instalment feature – the ability to break down a larger purchase into 6-12 months instalments.

I’ve personally used this feature, despite the small yet still-there fees, to pay for things like my IKEA haul and laptop purchase.

5.
Months until debt-free countdown

Learned this type of calculation from the debt-free community. They would calculate the number of months it’ll take to pay off their debt, and try to reduce the lengths by making extra or larger payments.

The most usual types of debts I saw was credit card debt and student loans.

People who make extra payments to pay off their house loan / mortgage are sometimes criticised for not channelling the extra money to (potentially higher ROI) investments. I can see the argument, but I also see how some people would just like to live the rest of their lives without owing any debt at all.

Related:
Explaining Snowball Method, The Best Way to Pay Off Debt

6.
Rule of 72
.

This calculation is an easy way to find out how long your investment will double in size. All you have to do is divide 72 with the investment’s estimated annual ROI %, and you’ll find out the years.

For example,

If you put RM1000 in a fixed deposit with 4% annual ROI, you’ll get RM2000 in 18 years (72 divide by 4)

If you put RM1000 in a mutual fund with 8% annual ROI, you’ll get RM2000 in 9 years (72 divide by 8)

7.
Your FI/RE number

Or the amount you need to be financially independent, without ever needing to work again.

I calculated my FI/RE number over at
Calculating the Amount I Need to FI/RE in Malaysia
 article.

8.
Taxes
. The amount you owe the Malaysian government if you make over a certain amount per year (something like RM26k per annum or something, the number changes).

Also, no, taxation is not theft. But I do think under-taxation among the wealthy *is* like stealing from the rest of the population.

9.
Zakat / Tithe

The amount you’re religiously obligated to give back to the community.

Related:
How to Calculate Zakat in Malaysia: Zakat Fitrah, Zakat Pendapatan and more

10.
Countdown until payday

The broke-r you are, the more you do the countdown until payday.

11.
 Net worth

Have you done your net worth calculation? Many people are surprised that their net worth is a lot less than they thought, especially if they have a lot of debt.

Remember, the Net Worth is calculated as Total Assets minus Total Debt. So you can actually *look* financially sound but have a negative net worth.

12.
Discounts & Sales

The mental calculations you do at the mall when you want to find out what’s 40% off RM269.

13.
Cost per use

Frugal people (like me) like this calculation. We get very satisfied if we could use a RM200 item 200 times (or more), thus making the cost-per-use at only RM1.

The cost-per-use calculation helps us become more aware of the quality and longevity of the item, instead of just looking at the price (our natural tendency).

14.
Money In / Out

An idea of how much money you / your family is bringing in per month, and how much you / your family spends per month.

Some people track this down to the cent (me), others are happy as long as their bank account shows a positive balance at the end of the month.

15.
Your average cost-per-meal

There are multiple versions of this calculation, but I made it simple: I just calculate the cost of my groceries divided by 100 meals per month*. For example, If I spent RM500 on groceries that month, that means my average cost per meal was RM5.

*If you want to be really anal about it, you could count the average cost per meal
including
 the amount spent while eating out, divided by 120 meals in a month (3 meals + 1 snack per day).

Related:
5 Things I Did To Reduce My Damn High Groceries Bill

16.
KMs you get out of a full tank of gas

I know of people who make a game out of it – they try to stretch out a full tank of gas by being more mindful of using the breaks, using less aircon, keeping the tires properly inflated and so on.

17.
Time / Value Calculator (Internal)

This ranges for everyone. Let’s say an item you want costs RM20 in front of you but RM19 at another location. Some people would spend the extra hour to get there to save the RM1. Others would just get the RM20 because it’s there.

This is classic ‘penny wise, pound foolish’ mentality, and sometimes I still find myself doing it. Trying to be more aware of it.

—

Alright, this is as far as my brain can… brain. I’m out of ideas, but I’m pretty sure there are more money calculations I’m missing out in this list.

Can you let me know other money calculations you personally do, and add them in the comments section?


Money Emergencies and How They Eff Up My Budget

I track my spending. All of it. In an app. Each purchase gets categorised – for example, rent money goes under the ‘Rent’ category and Tesco bill goes under the ‘Groceries’ category.

One of the categories is ‘Misc Needs’ – things that I have to buy anyway, but they don’t occur often enough to have their own category. They tend to be ‘money emergencies’. For example, things I have to fix or replace. But they’re also things I *have* to do, like haircuts.

I just want to share my observations about my spending patterns in this budget category.

Observation #1:  I think I’ve somehow upgraded my lifestyle in 2017

See the pic below. It shows that between November 2015 until October 2017 (24 months), I’ve spent RM18,045.07 for all Misc Needs. On average, that translates to RM751.88 per month.

But then I divided that further by year. From the breakdown below, it’s clear that my ‘Misc Needs’ spending has doubled!

November 2015 – October 2016 (12 months): RM5,477.84, or RM456.49 per month.

November 2016 – October 2017 (12 months):
RM12,567.23, or RM1,047.27 per month.

Why is this? Is this how lifestyle upgrade looks like? Do I feel like I *need* more things as I get older?

Observation 2: I have a good idea of the small costs that cumulatively make up the big monthly amount.

The type of expenses are so varied, I can even make sub-categories under the Misc Needs category!

#1 – Things I have to renew

These are things like:

Passport renewal. RM200 every 5 years.

Driving licence renewal. RM30 per year.

#2 – Things I have to replace/buy anyway

These are things like:

Kitchen stuff, like replacing water filters, sponges and chopping boards.

Bedroom stuff, like mattresses, pillows and sheets.

Electronic accessories like charger cables.

Storage units for clothes.

Makeup, clothes and shoes.

*Phones and laptops go under ‘Business’ category

#3 – Practical tools that cost money but saves me time:

These are things like:

Vacuum cleaner

Water flosser (worth it for someone wearing braces)

Washing machine

Containers for home organisation, so I spend less time to look for stuff

Powerbank

#4 –  Things that improve the physical body:

These are things like:

Sports gear

Sunscreen

Protein powder

Braces

*Medical items go under ‘Medical’ category

#5 – Things I have to do:

These are things like:

Haircut

Eyebrow threading

Neutering cats

Clothes tailoring for special occasions

#6 – Things I have to fix:

These are things like:

Electrical and plumbing problems, whenever they arise.

Car fixes, when I had a car last time.

#7 – Things I have to pay to avoid prison:

These are things like:

Tax balances

Fees and fines

Observation #3 – Furnishing a home is expensive, but not as expensive as the other option

I moved into this new apartment in November 2016. That coincided with the time when my Misc Needs expenses shot up. A lot of the items bought under ‘Misc Needs’ are home stuff – to furnish my rented apartment. Unlike previous places, the location I chose now did not come with a bed, mattress, fridge, washing machine, etcetera.

I remember preferring to move into a fully-furnished location, but decided against it because the rental amount didn’t make sense. My rent now is RM1200. The fully-furnished option at the same location is RM1800.

That means I would have to pay RM600 more for a fully-furnished apartment, or RM14,400 more over the course of two years (my lease duration). I remember thinking, “I don’t want to waste RM14,400. I guess it’s okay to pay more upfront payment to furnish this place than to pay more in the end in rent.”

It was absolutely the right decision. I spent about RM6-7k to furnish this place, less than half of RM14,400.

Observation 4: I really like tools that save me time

When I was younger, I didn’t mind going the extra mile to save a ringgit.

Now what I value most is time, and I’m so much more willing to pay for convenience and for tools that save me extra minutes and hours.

I use all that extra time to improve self-development, take on more work and make more money. It’s a nice cycle.

They say you need money to make money, but I say that you need time for yourself so you can make that money as well. Things that I’ve paid for that save me time, aside from tools mentioned above:

A virtual assistant – she helps me do research and marketing

A dependable laptop and phone

Maxis postpaid for the fast internet, even though I don’t like Maxis and they overcharge you

Cleaning services whenever necessary

And more

This reminds me of a
study that linked greater life satisfaction when using money to buy time
. What a cool life hack. Ultimately, I don’t want to be rich but too busy to enjoy it. I want a nice life.

What other things have you paid for that saves you time? I’d really like to know that.

Conclusion about money emergencies

Like it or not, I have to pay for these expenses. The good thing is, as mentioned above, a lot of these expenses help me save money in the long run and give a good return on investment on my life satisfaction.

~RM1000 per month is a lot of money to spend monthly, but I do expect the amount will be lowered on average – am not planning to make any other big-ticket purchases. I also put more priority on quality items, so it won’t need replacing so soon. I have rules when it comes to splurging and skimping – covered in this article:
8 Rules to When You Should Splurge and When You Should Skimp

What are your money emergencies? Does your lifestyle require you to you pay for additional stuff? Let me know in comments!