Being in debt is not fun, it's been 5 months since I started my life to be good in money management. I have been living frugally every month without much entertainment, most of my time spent was either gym, swimming, reading books and writing blog. I'm happy to keep myself disciplined in paying myself first, smarter in spending within my needs and afford ability. The interesting part is get to noticed my debts getting lesser and lesser. Guess what? I am living much more happier.

The journey to debt free (referring to bad debts) requires a lot of determination and disciplined, once you have decided to take the first step, you are on you way to debt free and settling Money problems. It takes a thousand miles to begin with a single step. Money shortages are always stressful and serious debt can emotionally drain you.

Thus, you can find dozen of debt management articles spread across the internet, you can read and understand them, but most of us need to dealt with ourself first, the biggest enemy is ourself. Life has up and down, different period in our life, we would have negative feelings of fear and anxiety.

Glad, after all it just money, take out the negative feelings, money problems can always be solve, you are still breathing, you are still alive, you are not losing your loved one or diagnose by incurable disease. You should be glad.

Accept, and don't blame. Part of your debts could be from your spending habit, it's your spending decision to create the problem for youself no matter you are aware of it or  not. There's always a choice, accept and works towards the responsibility.

Stop, spending is easy, stopping is hard. Digging is hard but stop digging is easy, if you are digging yourself into a hole, it's easy to stop digging. Likewise, same to money, when you stop spending, you are getting better control of your financial. Spend within your mean, you just need foods, water, cloth and a roof over your head to survive.

Personality, there's always good and bad debts, many people value a person by what car they drive, what they wear, what brand they carry in their hand or the brand of the watch they wear. What would be the purpose of having debts when you wear a ROLEX watch? Money is not to value a person status in society but the qualities of the person, character and personality. Sticks with true and honest people who don't really judge people by wealth but your their personality.

Learn, to be a lifelong student, it's part and parcel of learning experience in self-growth, debts you can resolve today can be an experience for you to deals with tougher challenge in future. When there is a challenge, there is always an opportunities, it could be a turning point in life for you to discover a better living lifestyle and a new start of life.

What trigger your spending? When you are sad, depressed, angry, excited or lonely? I use to spend more money when I feel bored or carrying a lot of cash in my pocket. That's why I don't carry much cash myself to avoid temptation to spend. Having to identify the way to trigger my spending, I have been very caution to avoid and control them. I find it challenge to disciplined myself and it takes time to learns discipline money.

It is very hard for you to have the temptation not to buy when the stuff you have been thinking to buy are on sales, 50%, 60% or 70% discount. You feel disturb and your subconcious mind keep asking yourself, "buy or not buy?", "sales now, great deals!", "I can swipe first and pay later since it's on sales, I can save a lot." and many more which you are convincing yourself to buy, you are finding a good reason to buy so that you can buy comfortably and feel better in spending, I think many of us have such thought before, self talking to yourself buy or not buy. However, it's good to practices evaluating before taking action to purchase, instead of convincing youself, why not you evaluate why you need the stuff, it is necessary? do I have more than enough? do I have budget for this? If the answer is NO, then just stay away and hang in there for awhile, you may notice your temptation to buy will fade away and you may even forgotten about it after 2 to 3 days. I know the feeling is sucks, whenever the feeling slip through, shift your thought to think positively, think about another fews more digit in your bank account or stay out of debts, it will makes you feel better. 

Discipline Money require self-discipline,  it is a key to reduce debts and increase savings, if you practice it in long run, it will also improve your standard of living. Undiscipline person normally does not have discipline in money, if you notices yourself working day and night for money and the money just slip away easily, it is time for you to review your spending habits and time for money management lesson.

Discipline Money require a lot of self-discipline,  it is easy when you come to think of fantastic rewards to reach financial stability that you hopes for. Take each step forward in controlling your spending habits with bit of imagination and just little creativity to put your hard-earned money on lock. 

What do you see yourself in age 60, retired and finish rich. I have heard that only 1% of the people retired rich and 60% of them finish rich because of business, the rest are either inherited or from high management position (CEO, CFO, etc…). Ever wonder how to be part of the 1% of people to finish and retired rich. Recently I read a book - How You can become A Multi Millionaire Real Estate Investor by Milan Doshi. There's an idea from the book that suggested you can become a Millionaire getting 1 property every 5 years by saving as little as RM450 a month. The idea is pretty awesome and is good if you start from NOW. Since I am in the late twenty group, it would be a good time to start to set a goals for this.

It may sounds strange for a person not reach thirty to have such thought of thinking retirement, but I have been thinking about retirement and visualise them lately, I think I am getting older and older and need to start something. Seeing some of my friends, in their early thirty still partying all night long and not ready to settle down financially, I am not sure if they had any plan but what I know is that many of them are planning to get out of Malaysia to earn more Money. Is the grass greener on the other side?

If you happened to visit some of the seminar about wealth, you may notice, all walks of life is there to look for a change in their life, some are fourty and fifty, some are doctor, businessman and millionaires (no kidding). Sometimes, I was wondering what are they doing here, they shoud enjoy the high pay salary or income. I was wrong, they are having good pay and income but felt insecure and no freedom. It's not passive income but active income, if they stop working today, the money will not be coming in. What they are looking for is multiple source of income which mean the number of days they can survive if they stop working today.The true wealth to retire rich is to live rich with lots of freedom.

So, the next time when someone ask you, how much a person actually needs in order to retire? The answer should be the number of days I can survive in infinity if I start to stop working now.

How many times have you heard that "money is not enough and I am not happy with my finances"? Alright, this is actually the voices from my heart. I use to blame the government because our education system does not include financial education classes for us to manage money well, sometimes I would blame my parent for not managing their money well enough for their kids to live better in future. But wait a minutes, is it their responsibility? This really got me thinking.

When something is at fault, there is always someone to be blamed. Let's think about it, before pointing finger to others, look at yourself what have you done. Let me share with you, recently I open a poll in a well known finance forum asking about how many people who has emergency fund on their hand if they do not work for 3 or 6 months. I wasn't surprise with the results, there are only 5 persons out of 53 that have emergency fund on hand. This is so common I was not shocked. From the 53 people that responded to my polls, I am sure they are smart and disciplined person. Emergency fund is essential in personal finance and why do this people not following? Perhaps it was just one example and I can't justify overall about personal finance but why do this good personal finance fail in the first place?

It kept me thinking for awhile and I think you may know how important it is to budget and manage your money. No doubt that there are still many people I know still don’t keep track of their expenses. Hmm…I use to think, if everyone is practicing, personal finance would not exists and this blog will not exists neither. Probably this is what I want it to happen.

To get a picture why these good personal finance idea is hard to follow and fail, I would use myself as an example and additional feedback from the poll that I had gathered. Here's some of the reasons and obstacles:

1. Not taking action and lazy to get started

Lazy could be the number one reason. They simply do not want to take action to get it started, all sort of excuses popup such as lack of time or rather spend the time in leisure to rest or do things they always wanted to do. In fact, the first step to get started will not take you long to plan and budget your day-to-day financial affairs. Despite doing all these planning will enable you to do the things that bring you satisfaction and enjoyment in later days. After all, it is completely up to you to take the first step. In my opinion, I think everyone should track where their money goes and I have not met people who is good in their finances that don't need to track their money unless they have a personal finance adviser.

2. Get lazy along the way

I know I know is lazy again. The second big obstacle required discipline and you may lost focus follow through. At this stage, even though you have make the right move to get started, but along the way you get lazy and the intention to give up is strong.

Since many will give up at this stage, if you continue to sticks to your goals, you'll will be better off others. You can cultivate good habits to keep you stay focus, for example, writing journal to remind you to sticks to your goals like I did, to blog about personal finance, and each time I wrote and reread what I wrote, it will automatically entered to my subconscious and keep me stay focus all the time.

See, this works for me, there is other ways to stay motivated, such as keep yourself a to-do-list all the time to force a daily routine to track your expenses. You can take about a minute or two a day after dinner or before you go to bed to list down what you had spend for the day.

3. It is not the right time yet

I know you may have a better important things to take care, you may thought of it is not important enough to take care personal finance now . But let me ask you, when is the best time? It is always the best time to start right now, start it small and you will eventually formulate a plan for yourself in long run that works for you. What's more important than paying attention to yourself. As with anything else in life, without financial goals and specific plans for meeting them, we drift along and leave our future to chance.

I always heard this anywhere in self development books or website -> "most people don't plan to fail; they just fail to plan." So, it reminds me that if I fail to plan, I will fail to reach my financial goals.

Given all the reasons and obstacles, the next step is all depends on you to get kick start your personal finance. It's easy to get started and practicing makes easy. The only courage you need is the first step. Here's a suggestion, you can read this book that I introduced before in my previous post - The Automatic Millionaire. Even J.D. Roth (world's most inspiring money blogger) recommending this book in his latest post - Personal Finance Made Easy: Pay Yourself First.

Finally, it hit us, this sentence "PRICE INCREASE" will be the hot topic anywhere in Malaysia. Fuel price jack up and the upcoming price increase for electricity, whether you like it or not, life must goes on.

In my previous 2 posts, I wrote Can your hard earn money keep up with inflation?, the 3.0% inflation that I mentioned in the post is outdated. The new inflation is estimate to rose to 5% or 6% due to fuel price increased. If we can't avoid inflation, then we can take opportunities from the advantage of it, to keep up with the inflation. Foremost, you may need to revise your lifestyle and start budgeting. I always think that the word "budget" is punishment for those who are poor, like I need to think twice before spending and budgeting seemed like a waste of time. After practising it for months, I discovered that budgeting can keep me focused on the goals I want to achieve and that's why I need it. I personally think it's a smart move NOT putting yourself on credit that you couldn't afford - "Spending without Budgeting". You can know more about how do I manage my money here.

I mentioned in my previous post that I would recommend a book. This is the book -> The Automatic Millionaire. All of us know this "Pay OURSELF first" before you pay others, but how many of us are doing that? When you received your paycheck, do you pay yourself first? through this book, you will discover ways never considered.

Here's the sum up, The Automatic Millionaire one-step plan to live and finish rich is to save money. If you are looking for a get rich quick book, you can avoid this one. To practice the concept in this book, required self-discipline and time. Basically the concept of this book is pay yourself first, and try to make it at least the first 10% of your gross income. This powerful concept and the magic of compounding is irresitable for everyone to follow if you want to finish rich.

Do you want to get up at the middle of the night and say this:- 

Ouch 1: I'm approaching retirement and I have no savings? 
Ouch 2: I tried very hard and no matter what I do, I can't seem to make enough money to cover my expenses and save some money. 
Ouch 3: I wish I could quit this miserable job, but I have no choice, I got bills to pay.

Money is not enough, do you blame money? Money is never the problem, you are the master of your Money. It's just our lack of understanding of money and how we manage our financial planning that cause us lose sleep at night.

You know what the things should do, but simply don't do it - Pay Yourself First!. Making excuses and blaming others, your parent for instead for not teaching us about money are over. If you want to continue to lose sleep at night, it's your choice and it's not because you are born poor, it's just lack of understanding. The great things about this book is that it does not ask you to save big, if you can, that's good, but most people are not in that position, which is why this book will show you how little savings can add up quickly. Saving is something found in your everyday life by the way you live and the choices you make. I am sure you have heard of this "Sikit Sikit Lama Lama Jadi Bukit (Malay translated in English as "from little to grows into mountain")" or this "Rome was not built in a day" and neither will your bank account.

There are hundreds of ways to save money, encouraged yourself that it is never too late to start saving, regardless of your age. Follow your own pace and I always put this quotes with me all the time "I cannot go back and make a new start, but I can start now and make a brand new ending."

Cheers~

A simple question. Do you really want MONEY? I bet you would says "Of course I want MONEY!". Almost anyone you asked wants money. Did you ever ask yourself why you want money so much? Is it because you can buy the things you want and have a lot of freedom?

Yes! what you really want is freedom that money can give you. When you have a lots of money you may have a lots of freedom. It's pointless if you have a lot of money and you are loss of freedom. Would you want to be millionaire or billionaire but serving a prison sentence for the rest of your life? No right.

Well, it's very easy to answer the first question, if I were to ask you, how do you get the money you want? how? for this question, there would be several answer, you can work for it, you can get commissions and receive royalties fee and you can get through investment or interest. You can even get money from the sky - An Indonesian businessman plans to throw 100 million rupiah (about $10,600) out of an airplane over the capital this Sunday as a publicity stunt to promote his new book… 

In fact, in reality there are only 2 basic ways to accumulate your money:-

1) Use our time and effort to exchange for money by working for it or,
2) Get our existing money to work for you and replicate itself.

Are you able to become wealthy by doing above, YES! you can if you are able to keep, most people does not know that it is not how much you earn make the different, it is how much you save make the different and this is the single most important difference between rich and poor. Sad to say that most people just spend more than they earn and get themselves enrol into financial disaster.

Our Education has taught us how to earn a living, not how to manage money once we get it, this explains why the answer to becoming wealthy is financial education and discipline.

There are many ways to educate yourself to be wiser in managing your money. I think the most easiest one is to read more book. Gaining knowledge reading books related to personal finance and investment not just give the knowledge you want but also can use to claims income tax as well, there is no reason for stopping you from start reading I guess.

Self-discipline is important, I know that many people who desperately wanted to learn something but they would never want to take action to do it, for example if I placed a personal finance book in front of them every day or a month, they would never flip a page. They are too comfortable in their comfort zone and do nothing to change it and keep saying they are poor. If their head is poor how is going to fill their wallet? or, more correctly, what is not in their head is not in their wallet.

People who spend the greatest amount of money on TRASH are the poorest people, they never even think of investing in themselves. Self invesment is the greatest asset you can get and it's your brain that can turn anything into money for you.

Self Investment + Self Discipline = A lot of money.

To get money is to learn how to control it, you need to improve your financial education and build your self discipline moving towards your goals to financial independent.

I would recommend book that I had read to share with you in my next post, please feel free to comment on this post if you have any good book to recommend.

Recently announced that Malaysia's annual inflation (CPI) rose to 3.0 percent high in April due to higher food price. This is the highest level in 15 months, the food index jumped 4.7 percent for the first four months of 2008 compared with the same period last year. News sources from TheMalaysiaInsider and more statistics from Department of Statistics Malaysia.

Our hard earn money is getting smaller due to unpredictable economy, we don't know what is going to happen next. Rice is increasing and yet government may increase the petroleum price soon, all this uncertainties will just loom back to us as a consumers.

If you are clueless about what's Consumer Price Index (CPI), you may refer Consumer Price Index as Cost of living index or more exact an index that traces the relative changes in the price of an individual good (or a market basket of goods) over time. Furthermore, our national unemployment rate continues to remain steady at 3.2% for the month of December 2007, it's not so bad after all. But, I have read somewhere an article that says inflation increase will lead to decrease of unemployment rate, which mean that the current unemployment rate at 3.2%, if this is to decrease then we should expect more inflation in the future. Here's the hint that is telling us it's coming more and more, the increasing food prices and recent global upsurge of petroleum prices.

My god, it seems like we are unable to avoid inflation, but it's not too late if you can take opportunities from the advantage of it, to keep up with the inflation. What's your plan? No doubt that fixed deposits are still the most popular form of “investment” in Malaysia. Let's see the best available fixed deposit rates for amounts up to RM 1 million on offer at the moment (source: Bank Negara consumer website www.bankinginfo.com.my - updated 29/8/2007):

If the above rates are not what you are looking for, you may consider investing in mutual funds or stock market. It may definitely higher that the above rates, just bear in mind, you need to invest in yourself first before you start to invest, know what you are investing is the rule of thumbs of investment. However, know your risk tolerance level, investment option is a greater risk, you may want to consult an experience financial planner before taking this step.

Lastly, it's all up to you to put your money in investment opportunities or not. After all, we are actually losing money with the increasing of inflation and decreasing of "buying power" that we had discuss earlier.

Everyone has their own way to manage their money, if you do not have one yet, probably you may want to starts off by picking one that best suits you and convenient to you. For years, I do not have a proper way in managing my money, I simply wrote them down in a piece of paper 2 or 3 days before the paycheck reaches me or sometime in an excel spreadsheet. I started off with a simple one, income minus expenses and the balance will be my cashflow, merely use for entertainment. It served the purpose for me to know how much I can spend on that particular month after minuses all my loans/debts and expenses. It works fine for me and sometimes it doesn't matches what I had planned earlier, how much I can spend and how much I can save, I would say most of the time, I'll overspent.

It's inevitable doodad or temptation would cause you to overspent that month, no matter how magnificent your plan is, without discipline, the plan won't succeed. I learned the hard way and earlier I had mentioned that I wrote them down in a piece of paper or excel spreadsheet, I do not kept or file them anywhere. I just memorized them and spent accordingly to the figure in mind. Although previously method served the purpose but it's not the way, because I do not know where the money goes. So, one free day I sat down and think, what's the best way to enhanced my financial situation to better track my money as well as saving more money. I came out with all these questions and answered them.

1) What's my objective for saving?
2) What's my goals after saving?
3) What strategies can I use?
4) What tools available that I can use to better track my money?
5) Am I wasting time planning all this?

After answering all the questions, now that I know what I want. I have a better picture of what is my objective and goals, I am better now to manage my money because I have a goal to achieve that would review back after 6 months whether I am wasting time or not. I scoured the internet looking for the best available software to track my money. You can find the best personal finance software here. If you find it complicated, you may want to start off with this excel spreadsheet that come with charts.

I had never tried Quicken, but I like Microsoft Money so far, although for Malaysian, we are unable to download our financial information to the application but we can manually create transaction and bump in all transaction from account created. It works perfect for me, now that I can track where my money goes with all the reports provided inside Microsoft Money. The only things that I need is disciplined to sticks to my goals and update it regularly.

There are many available free personal finance budgeting online, unfortunately, it was not meant to be use by country outside United States as these online personal finance site are able to let you download your financial details from the bank to your open account in the website and help you track your transaction and the good thing about it is that you can learned from other members of this site to exchange ideas and discussed.

1) Wesabe
2) Mint
3) Expensr

Lastly, how do you manage your money? whether is it necessary for me? I would say "YES", personal finance is for everyone, let's take a look at a bigger picture, a country need to have proper financial management to determined the in/out flow of money to ensure better economy. A company need to have proper financial management to ensure business sustainability. Finally, individuals need to applies personal finance to prevent money problems from happening to you. The no.1 stress in Malaysia is money, do you want to be stress free? I bet you would say "YES". Start now then…