What Would You Do If You Found RM1000 Today?

one thousand ringgit new RM50 notes

Let’s start our day with a nice thought. What would you do if a thousand dollars fell into your hands right now?

I think many of you will be getting your tax refund soon. Some of you may even be waiting for some dividend cheques to come along, since another financial quarter has gone by.

I asked myself this question recently and immediately my first instinct was to think what I could buy with RM1000:

  • An iPod Touch
  • A nice pair of work clothes
  • Get a new TV
  • Subscribe to ESPN
  • Buy a new wardrobe for children’s clothes

The list goes on. I’m sure you have your own list.

Many times we get some extra money (tax refund, bonuses, commissions, festive seasons, birthdays) and it seems to disappear before we know it.

Today I’m going to share with you an easy tip to handle any extra money that falls into your hands. This tip can be applied to any amount. RM50, RM1000 or even RM1 million if you ever hit a jackpot.

Step 1: Identify Your Savings

The first step is to identify what you want to save money for. Do you want to go for a vacation? Do you want to get an iPad?

I have four things I save for:

  • Retirement
  • Children Education
  • New Car / House / Reduce housing loan
  • General Savings (used for emergencies or large purchases)

Step 2: Allocate a Percentage

Assign a percentage to each of the savings categories. It is completely up to you how many percent to assign. It depends on your situation and your financial goals. You can even split it equally if you like.

My percentages are:

  • Retirement (20%)
  • Children Education (30%)
  • New Car / House / Loan (40%)
  • General Savings (10%)

Step 3: Divide the Money

When the money comes in, just bank in to the savings account and divide the money accordingly. I use a spreadsheet to track how much money is in each category.

When the amount gets to a certain threshold, I will move the money into an investment vehicle to get more returns.

Easy As 1-2-3

I also use this same method to allocate my savings each month. I find that setting up a ‘system’ makes it easier and automatic.

The only time I don’t follow this system is, if the money is specifically meant for that category. For example, any money given to my children will automatically go into their education fund.

Any dividends from an individual savings category will be put back in the respective category for further re-investment.

So how about you? What would you do if you found RM1000 today?

The Taxman Cometh

Income tax by Alan Cleaver

It’s the most, wonderful time, of the year… for the tax collector, that is.

For the rest of us, it’s mostly a big hassle to gather all our tax documents, receipts and various statements. I hope you’ve kept them all in a safe place so you don’t have to hunt high and low for them.

Since it’s tax season, I have some tips for those of us who are supposed to submit our income tax declaration forms:

1. Keep all tax related documents together in a file.

Throughout the year, we will collect receipts or receive statements that will be used for income tax relief. Keep these together, so it is all accessible when you need them.

2. Don’t listen to rumours

There are emails going around advising you how you can save on income tax. Some of the tips are quite dubious, for example using pharmacy receipts to claim parents medical expenses.

3. Remember, it is year 2009 assessment

Some of the announcements in the 2009 budget regarding income tax will only take effect starting from year 2010 assessment.

4. Do it now

Many will wait for the last minute to submit their taxes, then complain that the website is down. There is no point in waiting. Just spend a few hours to get it done.

As I am writing this post, the e-filing website is already experiencing slow loads, probably due to heavy traffic.

It can only get worse.

[tags]Income Tax[/tags]

Photo By: alancleaver / CC BY 2.0

How to Hack Advertisements and Save Money

desire by barunpatro

You can’t really avoid advertisements these days. You can even see ads on this blog. Content publishers need revenue, and advertisers want to be seen.

Think of the last time you watched an advertisement on TV or saw an ad on a website.

I don’t know about you, but there are certain advertisements that make me feel like spending a couple thousand of my hard earned cash.

I can can create a hundred excuses and reasons to justify my expense.

Do you know what I’m talking about? Those Apple iPhone ads, those Blackberry ads, Astro b.yond, LCD TV ads, etc.

I have a never-ending list of wants and needs.

Today I’m going to tell you a secret.

The next time you see an attractive ad that captures your attention, or an ad that makes you feel like you need that product, stop.

And think.

You see, most of the time you don’t really need or desire that product. Logically, why would you suddenly need a new product, when you’ve been living well without it all this time?

An effective ad can create that need, and that desire within you.

As you watch the ad, look at the images they depict. Is there an image of fun? Of class and elegance? Does the image play on your fears?

Does it show many people using the product (peer pressure and invoking herd mentality)?

Decipher the ad’s promise. Does it promise happiness? Does it promise acceptance in higher society? Does it promise seduction and pleasure? Does it promise to improve your life?

Does it even play on your guilt, such as not spending time with your parents, not spending time with your family, or not keeping yourself fit?

Once you do that, you can then objectively decide if the product or service is something you really need, or it is something that you want for some other reasons.

I guarantee this will save you thousands of dollars.

[tags]Advertisements, Money, Spending, Desire[/tags]

Photo By: barunpatro