Money Saving Tips

Here is one secret of successful saving: Do it! As long as you do not start today, you will never grow the habit of putting money aside for your future needs.

Put away a small amount each month. Better still, set up a standing instruction for automatic deduction so you don't have to think about it. Put the money into a savings account that rewards you with higher returns – you can check the list that I have put here on savings account.

You may consider these steps, develop the saving habit and you will soon see the pay-off. You'll see the benefit of saving as you watch your bank balance grow.

As your savings grow, you'll soon find that you may not need to use your credit card so often. In long term, you may even be able to achieve more substantial goals, such as having a deposit for your dream house.

Have a small amount deducted from your salary and deposit it directly into another saving account. As time past, your savings will grow automatically without you having to do a thing.

Why save?
In the short-term, having savings will free you from the stress of living from one payday to the next. Having some money set aside helps you deal with large bills or unexpected expenses. If you use your savings rather than borrowing money, you do not have to worry about repaying the sum you borrowed and any additional fees. On top of this your savings account may also earn a return for you. Saving for big expenses instead of using a credit card has dual benefits – you see your savings grow and you don't pay anything on the credit card.

As your savings continue to grow, you’ll be able to think beyond day-to-day expenses and would afford you larger things, like a holiday, a new i-pod or a car, without going into debt.

Set yourself a goal by setting up a standing instruction for an automatic deduction from your salary account, sit back and watch your savings grow.


How to get started? It’s as simple as 1, 2, 3 ....

No. 1 :  Set goals and determine your budget
Use your goals to motivate you. You can save for your next holiday, your wedding, a dream house or even for your retirement.

Break them down to short, medium and long-term goals.

In the medium-term, you can save larger amounts for things like a deposit for a house. As for long term, you may achieve your goal and have better options to retire. If you opt to have an option of early retirement, you may consider allocating a portion of your savings in investments that enable your fund to grow.

You can start saving now even if you haven't had time to work out a budget. Just pick a small amount to set aside from your salary each month. Some people choose a set percentage of their salary - say 5% or 10%. Others save a standard amount such as $30 or $50. It doesn't matter if you start small. The aim is to get into the saving habit now.

Request for your salary to be automatically credited into your savings account each month. This takes the work out of saving as you won't have to remember to put the money away.

A budget can help you to plan for your saving and expenses. Aim for specific goals. In the early days, keep your plan simple. For example, you may plan to have sufficient amount to pay for the big bills you get every quarter. Or you could plan for a longer term which will save you enough over a year to pay for a holiday. Use a budget to help you plan ahead.

No. 2 - Keep track of your spending
Keeping a spending record is the best way to establish your budget. Carry a notebook in which you record all your expenditure – every item, no matter how small. You’ll be surprised to find out where the money goes... cut down on the latte or cappuccino factor! Small amounts of money you spend on posh coffee or cigarettes can add up to thousands of ringgit a year. Cut back and put this money into your savings account and watch your money grow.

Check bills and keep receipts. Studies estimate that, on average, every fifth bill from the supermarket contains inaccuracies. So check every bill you get, from your mobile phone service provider to your electricity bill.

Avoid the “sale” mentality. Buying something for $100 which has a 50% tag doesn’t necessarily save you money if you don’t really need it. The point is, buy only what you need, not what you want or not what you think you can afford.

No. 3 - Where to save?
Typical savings products include savings accounts, special purpose accounts and term deposit accounts.

Savings accounts

• Allows withdrawals whenever you need to (may be subject to daily limits)
• Rates may vary
• May offer benefits (eg higher rates, reduced fees) if the balance stays above a minimum amount
• Can be useful for day-to-day transactions and short-term saving (eg for utility bills)

Fixed deposit accounts/general investment accounts

• You can't withdraw the money until the maturity of the term which ranges from 30 days to 5 years
• Higher rates than transaction accounts and the rate in fixed deposit accounts is fixed for the duration of the term. Profit is a potentially higher rate for the stipulated tenure
• Can be useful if you've saved a bit of money that you want to keep for a future goal - a term deposit account will prevent you dipping into the money sooner than you had planned and will pay more returns than a savings account

Grow Your Money 3 : Secure Your Savings

One of the first things you need to do for your financial safety in time of recession like these recent years, is to have as much saving as possible. Rules of thumb, is to have minimally 8 months of spending in term of savings. 8 months of saving should give you enough time to get your life back on track in period of turmoil.

When I stressed the word “savings”, it is crucial to ensure that the money we are saving as our emergency fund to be as liquid as possible. That means, if you need cash, there is no problem for you to withdraw your savings as hard cash.

Of course everybody likes to have steady growth for their money. However, for your emergency fund to put inside an investment scheme is somewhat risky. If the investment fails, losing your emergency saving to investment will be quite tough to cope with. That is why, any kind of money that set aside to be use within the next 5 years (as such your emergency fund), must not be put into medium or high risk investment.

Even if you put your savings into low risk investment whereby the scheme based on selling price and buying price of invested lot, it would contribute certain risk to your money. If you need to liquidify the money from that investment, and happen that the buying price is very low compare to the bank initial selling price, withdrawing your money from your investment will mean direct lost of your money.

The best way to maintain your emergency saving is simply to put them into saving account. Most of saving accounts are guaranteed by the bank not to loose your money. Of course the growth rate will be very minimal, but at least, for your peace of mind, you know that your money is well taken care of and can easily be withdrawn without having any downside on your money.

I have listed below list of Malaysia banks that offer savings account. Check out their comparative dividend rate and choose the one that will maximize both security and growth of your money.

Banking Institution	Initial Deposit	Rates
	(RM)	Range (RM)	Rates % (p.a.)
Affin Bank Berhad
Ordinary Savings Account	100	1.00-999.99 1,000.00-4,999.99 5,000.00-19,999.99 20,000.00-99,999.99 100,000.00-499,999.99 500,000.00-999,999.99 1,000,000.00 and above	0.35 0.9 1.35 2 2.25 2.5 3
Bank of America Malaysia Berhad
Saving Account	200	equivalent or above USD150k	1
Bank of China (Malaysia) Berhad
Savings Account	20	up to RM5,000 up to RM10,000.00 up to RM20,000.00 up to RM50,000.00 up to RM100,000.00 Above RM100,000	0.25 0.25 0.4 0.5 1.25 1.5
CIMB Bank Berhad
Savings Account (Passbook)	250	Up to 1000 Up to RM 2000 Up to RM 25000 Up to RM 50000 Up to RM 100000 Above RM 100000	0.05 0.05 0.05 0.1 0.15 1
Savings Account (Statement)	250	Up to 1000 Up to RM 2000 Up to RM 25000 Up to RM 50000 Up to RM 100000 Above RM 100000	0.05 0.05 0.05 0.1 0.15 1
Air Asia Savers Account	50	All deposit	0.8
CIMB Islamic Bank Berhad
Mudharabah Saving Account-i	20		1.08
Citibank Berhad
Citibank Hi-Save Account	5000	Up to RM50,000 Up to RM200,000 Up to RM500,000 Up to RM1 million Above RM1 million	0.1 0.25 0.75 1 1.3
Savings Account	500	Up to 50,000 Up to 200,000 Up to 1 million Above 1 million	0.25 0.35 0.75 1
EON Bank Berhad
High Flexi Savings Account	500	Up to 5,000 Up to 10,000 Up to 20,000 Up to 50,000 Above 50,000	0 0.2 0.5 0.8 2
Hong Leong Bank Berhad
Hong Leong Savings Account	200	Up to RM10,000 Up to RM50,000 Up to RM100,000 Above RM100,000	0.1 0.2 0.5 1
Malayan Banking Berhad
Kawanku Savings Account	250	Up to RM10,000 Up to RM25,000 Up to RM50,000 Up to RM100,000 Up to RM200,000 Up to RM500,000 Above RM500,000	0 0.15 0.2 0.45 0.8 0.9 1
OCBC Bank (Malaysia) Berhad
EasiSave Plus	500	Up to RM40,000 Up to RM70,000 Up to RM100,000 Up to RM500,000 Above RM500,000	0.15 0.3 0.5 0.7 1
Money Max	250	Up to RM50,000 Up to RM100,000 Up to RM500,000 Above RM500,000	0.35 0.5 0.6 1.2
External Account	20	Up to RM50,000 Up to RM100,000 Up to RM200,000 Above RM200,000	0 0.05 0.25 0.45
EasiStart Account	0	Up to RM5,000 Up to RM10,000 Up to RM15,000 Above RM15,000	0.2 0.4 0.6 2
iQ Savings Plan	0	RM50 - RM990 monthly RM1,000 - RM5,000 monthly	3.28 4
Public Bank Berhad
PLUS Savings Account	250	Up to RM3,000 Up to RM10,000 Up to RM50,000 Up to RM100,000 Up to RM1.0 Million Above RM1.0 Million	0 0.1 0.2 0.45 0.6 1
PB Savelink Account	500	Up to RM10,000 Up to RM30,000 Up to RM50,000 Up to RM75,000 Up to RM300,000 Up to RM500,000 Up to RM1.0 Million Above RM1.0 Million	0 0.05 0.05 0.2 0.2 0.35 0.35 0.75
Public Islamic Bank Bhd (PIBB)
Wadiah Savings Account-i	250	Up to 3,000 3,000 to 10,000 10,000 to 30,000 30,000 to 50,000 50,000 to 75,000 75,000 to 100,000 Above 100,000	0 0.1 0.2 0.2 0.45 0.45 0.6
RHB Bank Berhad
Passbook Savings	250	Up to 1,000 Up to 10,000 Up to 20,000 Up to 50,000 Up to 100,000 Above 100,000	0 0 0.1 0.25 0.3 1
RHB Statement Savings Account	100	Up to 1,000 Up to 10,000 Up to 20,000 Up to 50,000 Up to 100,000 Above 100,000	0 0.1 0.1 0.3 0.8 1
MaxSave Account	200	Up to 1,000 Up to 10,000 Up to 20,000 Up to 50,000 Up to 100,000 Above 100,000	0 0.6 0.8 1.2 1.7 2
MySave Account	100	Up to RM3,000 Above RM3,000	0 0.6
Standard Chartered Bank Malaysia Berhad
eSaver	0	Up to 100,000 >100,000 - 200,000 >200,000 - 1,000,000 Above 1,000,000	0.4 2 1.3 1.5
Privilege Savings Account	10000	Up to 25,000 >25,000 - 300,000 >300,000 - 800,000 Above 800,000	0 1 1.25 1.5
Master Savings	250	Up to 25,000 >25,000 - 150,000 >150,000 - 300,000 >300,000 - 800,000 Above 800,000	0 0.1 0.2 0.3 0.7
My Dream Account	2000	Up to 100,000 >100,000 - 200,000 Above 200,000	0.5 1 1.5
United Overseas Bank (Malaysia) Berhad
Savings Plus	2000	Up to RM 10,000 Up to RM 50,000 Up to RM 100,000 Above RM 100,000	0.1 0.25 0.45 0.8
U-Account	50	Up to RM10,000 Up to RM50,000 Up to RM100,000 Above to RM10,000	0.05 0.05 0.1 0.2
e-Account	500	Up to RM 10,000 Up to RM 50,000 Up to RM 100,000 Above RM 100,000	0.3 0.6 0.9 1.35

Later, I will uncover other ideas on how you can grow your savings in a safer way aside from savings account.

Grow Your Money 2 : How Much Should I Save?

My previous session mentioned about training your budget to have savings minimally 30% from your income. Just like me, I believe there are a lot out there would agree that this portion for savings is not only non-achievable but would drastically suffer our lifestyle for the sake of savings.

Let me derive more clearly where that 30% should go:

Retirement savings (10%)

1. Especially for those who do not have pension plan from their employer, having a retirement savings is critically important.
2. You need to understand what will be the age you plan to retire and how long you need to live after retired. Consider also the monthly expenses that you will need to have after you are retiring.
3. For my example, let say that I planned to retire at the age of 55 years old and plan to live 25 years after that. I plan to live a very comfortable life with expenditure of $2500 per month. Due to this plan, I would need $2500 x 12 months x 25 years of accumulated cash which bring me up to $750,000. That would be my long term goal if I plan to have a good retirement year.
4. For retirement savings, it is recommended to set aside 10% of your current income in order for you to achieve that goal.
5. Advisable to keep that savings under compounding investment for low risk, long term investment. That would further help you to grow your money so that you able to reach your goal faster.

Emergency savings (20%)

1. We do not know when we might need money for emergency.
2. Of course we might have insurance that cover almost all aspect of our life, but no one can really determine if any emergency that we might encounter will be covered by the insurance or not.
3. Advisable to stop taking unnecessary insurance, instead keep that money for own emergency.
4. Guide for a good savings habit, is to set aside 20% from your income.
5. Set a medium term goal for this. Try to accumulate enough emergency savings that can covers 8 months of your current income. If anything goes wrong especially affecting your income, at least you will have around 8 months period to get your life back on track.
6. In order to ensure that emergency savings remain available for you, keep them either in savings account or invest in low risk with high liquidity investment (such as gold or unit trust). Locking your savings into Fixed Deposit for example, is not recommended because of the mature period needed before you can withdraw your money.

However, if you are like me, it is tough to keep 10% for savings, moreover 30%. My advice, if you cannot nurture the money, please starts by nurturing the habit. Early each month, once you get your salary, prioritized to set aside some amount for savings, even if less than 10%. In Malaysia, for Maybank users, you can directly send your money to ASB account through Maybank2U online. You can even setup Standing Instructions (S.I), so that the bank will automatically set aside your money for savings. Once you have done that, do not easily reach for that savings account if you need money. Rules of thumb, use the money only for investment (for growing money) or for emergency. Make sure to reset your idea of emergency, because buying anniversary present, go to saloon for hair coloring before company dinner and change your car sport rim after 3 months old, are NOT consider emergency.