Income – Saving = Expenses
From KC Lau, I learned the correct way to spend money which stated as the mathematics equations above.We all have three special relationships with money:-
1. We EARN money
2. We SPEND money
3. We SAVE money
But what is the priority you gave to them? Let's compare the outcome for different priority is set to them.
If your priority is to save first, then only spend what’s left , it is most likely savings>expenses
Majority of wealthy people are the 2nd type. Saving is their priority!
If you find it difficult to delay your gratification, please engage some system to help you, such as EPF, endowment insurance plan or standing instruction on unit trust purchase. We can even ask our mom to save for us. Just simple steps to repeat every month after your salary out and you can easily control your expenses and saved an amount of money. If I can do it, I'm sure you can do it as well ;)
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How Credit Card benefits to you?
There are many advantages using credit card wherever whenever we can because:1. Our expenses are properly recorded
2. The credit card statement can be used as proof of payment when filing for income tax
3. Get rebate on our expenses
4. Emergencies : hospitalization, lack of cash when traveling overseas.
2. The credit card statement can be used as proof of payment when filing for income tax
3. Get rebate on our expenses
4. Emergencies : hospitalization, lack of cash when traveling overseas.
The best advantage is that it increase our cash in hand. Why do I say so?
Let’s say your fix expenses is RM5000 per month. You use your credit card to pay for all those fix expenses monthly. The due date to pay back your credit charges is 20 days after the statement date. Therefore, we can have the RM5000 put into our own saving account to earn interest for 50 days. Even better if you put the money in your home loan-link account to reduce the interest charges! This means we actually have extra RM5000 in the bank!
Let’s say your fix expenses is RM5000 per month. You use your credit card to pay for all those fix expenses monthly. The due date to pay back your credit charges is 20 days after the statement date. Therefore, we can have the RM5000 put into our own saving account to earn interest for 50 days. Even better if you put the money in your home loan-link account to reduce the interest charges! This means we actually have extra RM5000 in the bank!
Credit card really helps! (Only if you know how to use it)
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How do you cope with low income?
Several factors enable a person to save first before paying any of his living costs.1. In beginning a career it is best to stay with your parents first, thus avoiding paying rents.
2. Using you old parent's car, if there is, when driving to work and paying only the fuel. No need to bring out money for servicing a car loan.
3. No subscription bills like phone bills, magazine subscriptions, internet subscriptions and others.
4. Joining a company that has medical and dental insurances thus gaining more savings than paying for possible expenses.
5. Using company uniforms makes it unnecessary to purchase work clothes.
6. Avoiding too much entertainment to pleasure one's self after several days of work. Mostly staying at home helps.
A book on surviving low income can be a great help. The important lesson is for a person "to learn to live without" and "avoid buying things you cannot afford or you do not need". Frugality is the key.
source from : http://kclau.com/
