Recent reports that Malaysians have the highest personal debt rates in Asia, as well as reports of an alarmingly high amount of young people declaring bankruptcy has thrown the level of our citizen’s financial maturity into question.

Are Malaysians really that bad with money? The answer is definitely a no. Malaysians are usually very wise when it comes to their finances, but many land in debt as they either made a risky decision that didn’t pay off, or are pressured to maintain a wealthy image that doesn’t reflect reality.

This is further compounded by the fact that many are landing in debt due to failing business as a result of the currency value decline, GST or the rise in prices of raw materials.

So here are 5 of the absolute must follow principles to guarantee your financial survival.

Spend within your means
Unless it is an important and big purchase, like a car or house where you have to take a loan, avoid taking personal loans for your daily expenditure. This is easier said than done, really, but it is the most basic principal. Don’t spend more than you earn.

Save, save, save!
Put away at least 10% of your income into a savings account that is separate from your income account every month. Don’t touch this amount unless it is an absolute emergency, like a medical emergency. After that, pay all your bills and loan repayments, and then live on whatever is left over.

Don’t take on bad loans
A bad loan is defined as a loan that does not grow in value over time, or does not give you any returns. One example is taking a car loan, as cars tend to depreciate in value over the years, it is best to take a minimum year loan on your car. Another bad loan would be credit cards, where you actually pay more for whatever you spend.

Invest your savings
Grow your savings for some passive income by putting it into any investment plans by banks, mutual funds, Islamic banking funds or the like. This is also good as a savings plan for your retirement, or emergencies.

Insure yourself and your wealth
In order to ensure that both you and your family do not lose your regular source of income, it is absolutely necessary to insure your life , your home and your business, so that in the event of anything unfortunate, you and your loved ones will be able to cushion the blow because at least there will a financial backup.


(中文版请看这里:http://www.durianproperty.com.my/blog/article/1270)