Everyone must have this question in mind. Included me. Do you keep some money for your future? If no, it is not too late to start right now. Earlier the better. I start to learn financial planning after out of university. 3 years of knowledge that I have gained. Some of my friend already started their own financial planning when they were teenager while some still wondering around with no plan in mind. Better have one in place else you will find yourself end with less or no money with you all the time.

Access your financial condition is the first step I took. Find out all the asset you got. Ask yourself these questions. How much cash I have in bank? Any fixed deposit in bank? Own any company share? Any unit trust in hand? Do I own a house? Have any car? List down all of them and calculate how much total value are they. Then you will know your current asset available with you right now. I do not have any house or car after coming out from university. Most of us will be the same except you have a very rich dad. Then you might have a car or even a house already. Or ever more. Therefore, we need to earn money to buy all these stuff to survive. There is a cruel world out there.

Besides asset, now is the time to find you your liability. Do you owe anyone money? Do you take any loan to buy house, car…? Hurry up come out all of them. For my case, I owe PTPTN (education loan in Malaysia) only for the moment. Luckily… It is not a big amount. It will take me 15 years to pay them back all the loan by monthly installment.

Are you employed? Or do you own your business? You need to find out your income either you are in any one of the above categorizes. For those employed, what is your monthly income? Businessmen, your yearly income please. Before you start to spend money, you need to know how much you can spend. However, most of us did not do so. There are a lot of people’s money will be finished spending after their employer bank in money to their bank account at the end of the month. They did not have a good financial plan or no at all. They tend to spend more than they should.

Cash flow… Cash flow… Cash flow… Where did your money go? We need to spend to live. We need to buy food, drink, clothes and other more… What kind of bill do you need to pay every month? Take some time to calculate them. Does your spending more than your income? If so, you really need to be more careful when spending money. Try limit yourself on credit card usage. This will help a lot. Credit card is a tool that ease our life so that we do not need to bring a lot of cash during shopping. But not to use it unwisely. Credit card interest rate is higher than normal bank loan.

With these steps above, you should be able to find out your current financial condition. Good or bad? It is OK that your financial condition look a bit ugly now. As long as you have a good financial plan, you can turn away from bad condition.

Set your goal! People cannot live without having any goal in mind. However, I do know some do not have any goal in their head. They just live to eat. I do have short term and long term goal. Short term mean 1, 3 or 5 years while long term is 10 years or more. I just fulfill my short term goal to get a digital SLR camera. I planned it for 2 years already. Finally, I can own Canon EOS 400D Digital SLR camera. Long term is to get my own house and car. Having goal will keep you motivated to do something. To fulfill these goals, I started this blog to earn some pocket money. Be sure to come out your own goal right now. Yes, right now!!!

Have a good financial plan. Come out your own plan. If you cannot do so, get a financial planner to do that for you. You need to have one. Trust me. Your life will be better if you have one. After study from a lot of sources such as Internet, book, CD, talk… I come out my own financial plan. I set spending percentage on every part that I going to spend on. Example as below…

5% – Business == Study fee, investment loses, insurance
30% – Saving == 10% own saving, 10% children saving and 10% saving for wife
10% – Parent == Come on. You should give some to you parent. More is better
15% – Gift == Gift for God, church and other offering, good deed…
12% – EPF == Malaysian retirement fund
20% – Personal == own spending like clothes, petrol, anything for my own use
5% – Food == No need to say more. Eat lo…
3% – Entertainment == Movie, buy DVD games, travel

You are encouraged to come out a spending plan like this. Write down every spending you do everyday. Do it for at least 3 months. Then you will have an idea on how much you spend and where you spend. In the end, come out these percentage spending guide as above. Do not even break the rule. I did not break it since I started it last 3 years. It is hard but you can buy anything you want in the future if you keep following it. Trust me, I can buy my SLR camera is one of the end result.

Your income will be less if you only have 1 income source which is your employment job. Try to invest some in unit trust (Bond, balanced, equity or money market fund), share market, option and future. However, before start investing, you need to know the risk you can take. Normally, we can take higher risk when we are young and lesser when we are old.

Higher Risk == High Return
Lower Risk == Low Return

Action! Action! Action! Goal without action is dead. You will get nothing if you just stand there. Start all these steps right now…

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