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Hiya, my name's Aaron Yee from Malaysia. I am right now a repeat student from IMU, right now in my final year. Well, part two of final y...

Monday, May 23, 2016

Why it's important not to touch your first paycheck.

I just got paid!

The cheque doesn't clear till Wednesday . You know, two working days and all.

The cheques is supposed to cover my one week teaching on the last week of April, so it's only about a hundred and eighty ringgit. Not much, I know, but being a part time student/teacher, it can go to a savings account to collect a wee bit of interest. Once I've made enough money, all of it is going into a fixed deposit.

So the title of this post, is about not touching your earnings. Obviously, you've got rent and groceries,  but this is where you budget. You have to place emphasis on spending less. You gotta eat cheap healthy food. No snacks! Rent is an overhead, nothing much you can so about it. But whatever is left. Don't touch it.

Don't believe in your friend that says "Guys let's go for yum cha (drinks)!". It's not worth it.

You wanna save.

So how do you do it, first off squeeze every cent you have. Any variables that can be manipulates, should be taken advantaged, such as electricity, water and eating out. I will explain how to squeeze every cent in my next post.

The money from your pay cheque, minus the other stuff, what's left of it, quickly put it into a category "don't touch". Earn a little interest in your savings account, and when it reaches a thousand, put it into a fixed deposit.

Then keep doing this until you have another, and another and another, until you have several. The initial rate for a maybank fixed deposit is about 3.25% but the longer the stay, the higher the rates. You'll get 3.6% in 60 months. And if you don't touch it, your interest is making you money as well. 3.25% of a thousand gets you 32.50. then the next year you get 3.25% out of 1032.50. and it keeps going on.

It is also important to diversify your profile, it can be depositing, your money in a different bank which has a different interest rate, or investing in unit trust. Choose the safest option, since there have been cases where people lose money to unit trust.

To the people who are reading and say "wow, thanks captain obvious! It's compound interest!"

Yes, it is. But we as society, tend to spend more, And more, on frivolous things. Keep working, live a modest life, and let the money work for you.

I know I am green to this sort of thing, I am a medical student I don't know anything but medicine, but I am all for saving and creating a money empire. Hopefully I can get a job where I get foreign currency.

Such as this blog.

Thanks for reading.