Kepada anak-anak yang masih belajar atau sedang bekerja, umi nak berkongsi artikel yang ditulis oleh Ong Shi Jie, Head of Wealth Management, OCBC Bank (Malaysia) Bhd. Pada pandangan umi, artikel ini patut dibaca kalau anak-anak hendak berjaya dalam menguruskan kewangan.
Never too early to start good financial habits
“BUT I’m too young for a financial plan!”
If you think you’re too young to start a financial plan, think again.
The all-too-common excuses are: “I don’t have a lot of finances to plan”, “I’m too broke to consider financial planning,” “I wouldn’t even know where to start,” and, perhaps, the most dangerous “There’s always time for that someday”. Excuse me while I cringe.
It pains me to hear a group of people, who have the most important asset that money can’t buy, failing to recognise and capitalise on what they have it. Cryptic?
I’m talking about time. Money can’t buy time. You can’t borrow time. Once wasted, you can’t get time back. If you have ever rushed an assignment, prepared for an exam or half killed yourself to meet your targets, you will agree with me that time is something you wish you had more of. So why the difference when it comes to your financial goals?
The phrase “financial plan” seems to infer complex investment products that are designed to be tax effective while ensuring your estate is taken care of. Gibberish. A financial plan, for a start, is about you. It is about what you want to achieve.
If you wish to pay off your study loan in a year, you can put together a financial plan for that. Simply identify how much you need to pay off in a year and how much you can set aside every month that goes into your loan. If that’s insufficient, think about what other areas of spending you can trim that can go toward your loan. That’s a plan.
Looking to buy a car? Find out how much you can place as a downpayment and afford for car loan payments monthly. That will help you determine what car you can purchase. Dream car out of reach? How about a used car? Or, perhaps. settling for less? Start saving for that downpayment. That’s a plan.
Now we move on to bigger goals, like buying your first property or setting retirement objectives. Repeat the same process. Decide how much you need, and by when. Figure out how much you can set aside for this. If it’s too much of a stretch, adjust your goal.
Big goal or small goal, one year or one decade away, in debt or looking to invest that fixed deposit – a financial plan can help you. And don’t let bankers or financial advisers tell you that a financial plan is about building an investment portfolio. It’s not. As long as you have a goal, you can certainly use a plan.
And it goes without saying that you will have a greater chance of success if you plan way ahead. You have time to adjust your plan and rebound from errors. More importantly, it’s never too early to start creating good financial habits.
So for those of you who say “I wish to be debt free someday” or “I wish I could start my own business someday” – well, that someday must start with planning today because your time asset diminishes each day.