The Green Ringgit Challenge

Hello 2021.

We are now in a new year and to kick off this new year, let us have a look at this challenge that I did personally for 2020.

More than a year ago (2019), I came across this Challenge to save money. I felt that it could be fun, so I told myself that I would do that challenge for 2020.

The challenge is very simple. I will keep every RM 5 (that is why I call it the Green Ringgit Challenge) that pass through my hand (if it belongs to me). It started very slowly because I don't use can much but somehow, at the end of 2020, I managed to keep 50 pieces of RM 5. When I did the maths, it means that I managed to save up RM 250 in 1 year. It may not be a lot to some but still, I'm proud of myself to be able to save up this RM 250.

With 52 weeks in a year, it means that I almost find one RM 5 every week.

The only thing that I can say is that if I'm able to save RM 250 with this method, you can do it too. If you want to bring it up a level, you can do the following challenges:

The Red Ringgit Challenge (RM 10)
The Orange Ringgit Challenge (RM 20)
The RM 50 Ringgit Challenge

As for me, I have decided to continue with the Green Ringgit Challenge for another year. Will try to beat the 50 pieces records.

Would you want to join me in this Challenge?

Most Fuel Efficient Cars in Malaysia

What is the most important thing that one should look at when buying a car?

Many people would mention the brand, the model, the design, and a lot of other factors.

I personally felt that what is most important is actually how fuel-efficient is the car. Why? Because you will be driving the car for many years and that one thing that is constant is the fuel that you will pump into the car. If the car is not fuel-efficient, ringgit will flow out of your pocket faster than you realize. 

For example, a car with a fuel-efficiency of 5L per 100 km can go double the distance compare to a car with a fuel-efficiency of 10L per 100 km. Same distance but double the price. I would have nothing to say if you find paying more is nothing. But for me, and most of the people who are more financially literate, it is never a good idea to pay more. The extra money can be put to good use for a better future.

Below is a list of some of the most fuel-efficient cars in Malaysia.

• Est. 4.7L/100km - Perodua Bezza 1.0 Standard G – A/T
• Est. 5.2L/100km - Suzuki Alto 1.0 A/T GLX
• Est. 5.2L/100km - Mazda 2 Skyactiv 1.5 SDN
• Est. 5.3L/100km - Mitsubishi Mirage 1.2 Sport (2014)
• Est. 5.3L/100km - Ford Fiesta SE with 1-liter EcoBoost A/T
• Est. 5.6L/100km - Honda Jazz 1.5 S
• Est. 5.6L/100km - Kia Picanto 1.2 A/T
• Est. 5.8L/100km - Proton Iriz 1.3 MT
• Est. 5.8L/100km - Hyundai i10
• Est. 6.0L/100km - Nissan Almera 1.5E A/T
• Est. 6.2L/100km - Myvi 1.3 Standard G – A/T
• Est. 6.3L/100km - Toyota Vios 1.5G
• Est. 6.5L/100km - Volkswagen Polo Sedan 1.6
• Est. 7.5L/100km - Honda City 1.5L S

I got the information from imoney but I rearrange it to show the most fuel-efficient car first. Of course, there are many more cars that are not listed here. If you have any idea of other fuel-efficient cars that should be listed here, please let me know.

Should Malaysians strive for Financial Independence?

There have been reported that 76% of Malaysians do not have enough savings to last them for 3 months if some unexpected events (loss of job, accident) happened in their lives. Most of us believe that because we have a job that is paying us every month, we are safe. Thus, many people do not save much.

But it may not be true. The current Covid-19 pandemic is a very good example. Covid-19 pandemic basically put most of the economy in the world into a standstill and many companies are unable to sustain in paying the salary of its employee. Thus, there are many people that have lost their job or would experience some pay cuts.

Without enough savings, many of these people are in a very bad situation.

It is only with the correct financial know-how that we are able to overcome this and the concept of financial independence is the know-how to overcome this situation.

The basic of financial independence is to be able to have a nest egg that would be enough to sustain the required expenses in case of losing the ability to earn, whether because of losing a job, accident, or even loss of life.

The simple steps to financial independence are as follows but it does require certain discipline to make it a success:

1. Understand where your money comes from or where it goes. A full record of the most recent income and expenses will give a good idea your financial situation.

2. Minimize/eliminate debts, especially lifestyle debts such as credit cards and personal loans.

3. minimize spendings by spending only on needs instead of wants, though some wants is acceptable but not excessive.

4. increase income by buying assets or starting a side hustle that will generate long-term incomes.

By knowing your financial situation, you will be able to eliminate debts and lower down the spendings. This will help to lower the required amount of passive income, and thus making financial independence easier to achieve. By increasing the income, especially passive income from income-generating assets, there will be a time when it is okay no matter what type of economic downturn that you may face.

So, in my point of view, financial independence is something that everyone should strive for. Even if you are not there yet, the benefit of eliminating your debts and increasing your incomes will benefit you greatly.

Frugal Living

When I learn about financial independence, I have started to adjust my life according to this new goal. What I didn't know is the life that I am living in now is call frugal living. Frugal living means adjusting the priorities of life by focusing more on things that are important. As a husband and a father, my top priority would be to provide for my family, both now and also in the future.

But how does frugal living works?

Frugal living works in 3 different areas:

1. Smarter Money Management
2. Smarter Spending
3. Smarter Lifestyle

Smarter money management

When you know what is going on with all your money, you would be able to make smarter decisions. You will know if you should save or spend it. You would know if that something is really worth your money or not. And the only way to know what is going on with your money is to have a cash flow records (aka track your money).

Record all the money that comes in and go out. Over a month, you will find some surprises on where did your money went to. And you will start to be more mindful of how you are spending. That is what we call smarter money management.

Smarter spending

As mentioned, once you know where you are spending your money, you would be more mindful of how much you are spending. You would start to look for alternatives whereby you would still get the same result but at a lower price. This is what we call stretching the money.

You will also start looking for possible ways to get cashback, discount coupon, rebate, and up to possible buying in bulk and stockpiling certain items that you found at an unbeatable price. Another way of smart spending is when you know when you would not spend it. When the purchase doesn’t fit into your budget, you would wait until the item goes on sales before buying it. That is what I call smarter spending.

Smarter lifestyle

Do you know that the supermarket/hypermarket/retail stores are charging you RM0.20 for each plastic bag that they provide for you? It may not seem much but if every 3 days, you would go for grocery shopping, 1 one year, you will be paying RM24 just for 1 plastic bag. What if you are taking 2 plastic bags? That is RM48! So, instead of continuing using plastic bags, use a recycle bag. It is much more convenient and cheaper and stronger too.

Also, instead of eating out every other day, cook the meal at home and enjoy the more wholesome meal. Have fun during the process. Or bring your lunch from home and you can skip driving out of office to buy your lunch. That is what we call a smarter lifestyle.

Why Live Frugally?

Frugal living unlocks a world of possibilities. You can pay off all your debts, pay for your child's education, retire early, travel the world, etc. It may not be an immediate result but eventually, you will get there.

Are you with me?

Who is Dave Ramsey?

In the world of personal finance and money, chances are, you already know who is Dave Ramsey. He is a radio personality turn author and public speaker who uses his own story of financial turmoil that followed by tremendous wealth as a way to teach others about personal finance.

The reason why he is so popular is that he understands the motivation people need to get out of debt. He breakdown the steps into 7 steps that he calls the Baby Steps:

• Step 1: RM 1,000 in an emergency fund.
• Step 2: Pay off all debts except the house by utilizing the "The Debt Snowball" method.
• Step 3: Three to six months of savings in a fully-funded emergency fund.
• Step 4: Invest 15% of your household income for retirement.
• Step 5: College Funding (e.g. SSPN-i)
• Step 6: Pay off your home early.
• Step 7: Build wealth and give.

Step 1: Save RM 1,000 in an Emergency Fund

Dave recommends starting off by focusing all your attention and energy on saving up $1,000 in an account and label it for emergencies only. By doing this he is able to get people to have a “small” win first, which will encourage them to continue the next baby step.

Step 2: Pay Off All Debt Except Your Mortgage

Baby Step 2 is all about psychology. This step is one of the most important ones that show his power of motivation by using something he calls “The Debt Snowball“ method. This method gives people quick wins from the start and keeps people motivated because the majority of people will be staying in this step for several years before they can get rid of their consumer debt altogether. The quick wins will help to keep the people motivated so they can continue to stay the course.

"The Debt Snowball" method is where you would list down all of your debts (except for your mortgage) from smallest to largest. Next, you would make minimum payments on all the debts and put every extra Ringgit towards the smallest debt until it is gone.

After the smallest debt is paid off, you would move on to the next smaller debt on your list. With this second debt, you would add what you were paying on the smallest debt plus the minimum payment you were already paying until it is paid off. Repeat this process with all the debts on the list until you are consumer debt-free.

When you start paying off the debts one by one, you will see that the snowball would start growing. It will cause the brain to release dopamine and serotonin (neurotransmitters) whenever you win something. These neurotransmitters will cause you to want to continue the process more and more.

Baby Step 3: Finish The Emergency Fund With 3 To 6 Months Of Savings

Once you are debt-free, you would have a good stash of ringgit(the money you used to pay off your debts) for other use. On Baby Step 3, this stash of Ringgit is best used to build up your emergency fund of 3 to 6 months of savings. Dave claims that by doing it this way, we're reducing the risk of having to go back into debt if we experience an emergency. If you do not do building up this emergency fund, how would you handle an emergency? Would you pull money from your children's college fund or get into debt again?

Once you have completed this step, you are now able to protect your family from major financial emergencies.

Baby Step 4: Invest 15% Of Income Into Retirement

It's natural for us to want to put our kids ahead of ourselves. But what if you end up without sufficient retirement income because you made the college funding a higher priority? You would have to depend on your kids to take care of you. Won't it be better for you to take care of yourself?

So before you begin doing anything with the excess money left over from paying off the consumer debt and building the emergency fund, Dave suggests that you invest 15% into your retirement accounts. For us Malaysia, this is in addition to our KWSP/EPF. If you are not sure where to invest in, you can look into the articles I have written on Wahed Invest here and here.

Baby Step 5: College Funding For Kids

By the time you reach this step, you should:

• have an emergency fund with 3-6 months of expenses
• be debt-free (except a mortgage)
• be investing at least 15% or more of your gross income

Now that you have your finances in order, it is time for us to put some money into our children's college education. It is a good thing that we actually have SSPN-i and SSPN-i Plus which are tax-advantaged accounts for educational expenses. How much should the amount be is up to you to decide? Tertiary education in public universities would be much cheaper compared to private colleges or universities. It is best to save more.

Baby Step 6: Pay Off Your Home Early

Dave recommends that you take any extra money coming in after you've progressed through the other Baby Steps in order, and throw it towards the mortgage. The faster you pay off that mortgage, the more interest that you would be saving once you have clear it.

Baby Step 7: Build Wealth And Give Generously

Yes, you have finally made it to Baby Step 7. You don't owe anyone anything and now it is time to really start building wealth and help others.  Dave actually wants us to reach this step and become financial independence.

Dave mentions that to build wealth, one should invest in both mutual funds and real estate but before you move in and start buying shares in every single company in Malaysia, read up on investing books or search the internet for what those who are financially independent do with their money.

Never forget about giving. The meaning here is to give to help others

How to set a SMART Financial Goal

It is always a good thing if we could have goals for our personal finance. But a lot of times, many people (me included), does not know how to set our own financial goals.

Today, we would like to share how we can actually set a SMART financial goal.

The Acronym SMART actually stand for the following Specific, Measureable, Attainable, Relevant and Timebound. Let us look a bit more detail into each of them.

Specific: State exactly what you wish to buy/accomplish with the money you save.

Measurable: Indicate the exact dollar amount you need to accomplish your goal.

Attainable: Identify the steps necessary to reach your goal.

Relevant: The goal must be meaningful or you may lose motivation to stick with your plan.

Time-bound: By when do you want to meet your goal?

Bigpay - A Review

I am a user of Bigpay for a long time now. I got it when it was launched a long time ago.

I am sharing the good things about this Bigpay Mastercard here for you to decide for yourself...

Track Your Ringgit

The first step to start tracking your ringgit is to start listing down all your incomes and expenses. If possible, try to work out your incomes and expenses for the past three months. If you are unable to get all the details for the past months, you can track your current income and expenses.

Your monthly income (inflow) should include your salary, other receivables such as commission from your side hustles, interests from certain investments, bonus or dividends, and rental receivables.

Your monthly expenses (outflow) should include rental payable, mobile phone bills, student loan installments, personal loan installments, housing loan installments, hire purchase installments, meals (breakfast, lunch, dinner, snacks, suppers), drinks (Starbucks, bubbles teas, beers, liquor), subscriptions (Netflix, iFlix, Steam etc), cigarette, entertainment expenses (Karaoke, trips, movies), petrol, car maintenance, cash for your parent, etc.

Saving - The Foundation of Wealth

I am someone who loves to read and one of my favorite books is called "The Richest Man in Babylon". It is a personal finance book that was being made into the story and the lessons learned there are invaluable.

I totally agree with what is mentioned in the first lesson. It mentioned that we should pay 10% to ourselves first for all the incomes that we are getting. The rest would be used for expenses.