Summary – The keyword is fluid & 6 months salary

If you read financial related blogs, almost every one of them will advise you the same thing – Start your emergency fund. Technically this fund will serve as a safety net should anything happen to you. You never know.

For example, you are sacked from your job. With your emergency fund, you will be able to support your family and still pay all those monthly bills while searching for other jobs. Imagine not having one, you car will be taken from you, maybe even your house. How on earth will you be able to focus on job hunting with all those problems?

So start your emergency fund, Recommended value should be around 6 – 9 months of your monthly expenditure. Let me repeat, “expenditure” not your salary.

These tips may help in establishing your emergency fund.

1) Eliminate bad habit that cost money

Bad habits that cost money are like smoking, drinking, partying every other night etc. Look into your daily activities and identify which unimportant activities is draining your money. List them down and decide right now whether that habit is good or bad. If it’s bad, put a stop to it.

How to get out of a bad habit? Aha.. That will require an entry of its own.

2) Pretend everything cost $5 extra

If you buy your monthly groceries, and it total up to $120, Take out $125 instead. Pay up for the groceries, but the remainder $5 is to be put into your emergency fund. Do this to every purchases you do. Call it your personal tax if you want.

You will spend less for sure, and you are saving more. What harm can it do?

3) Budget and rebudget

Now you should have cut all the unnecessary expenditure. Make a budget for the month. Here is how you can do that.

Record everything you bought and spent up to the cents. This is the time consuming part, just bear with it for about 3 months. You just want to have a clear picture of how you are spending your money.

Once you have recorded every expenditure of the day, write it down in your Excel file and tally it with your actual balance in hand. If it is tally, that means you are monitoring your finance well. If not, that can only mean that there are some money lost without you knowing it. Figure this out first.

By the end of the month, you should know how much exactly are you spending on food, entertainment, bills etc.

Assuming you are spending $2000 for the whole month. Take 10% out and that would be $200. Now check back your budget. Where can you squeeze out that $200.

Certainly things like phone bills, entertainment, electricity can be cut easily. Remember this is only temporary. Once you have achieved your emergency fund target, you can do what ever you want 🙂

4) Snowball saving

Remember the snowball technique? That technique was actually used for eliminating debt fast. However we can adjust the technique so that we can now save faster. Always pay the minimum amount of any bills and just put the extra money to your saving.

It would help to get yourself a piggy bank. When you cannot see your money, you will be more likely to forget about it. Rule of thumb – Never pick up the piggy bank to weight them. You will be tempted to count the money inside.

5) Create multiple bank accounts

I would suggest 3 accounts. One is for rainy days, another is for death or 911 cases and the third one is to be forgotten.

One of the advantages of keeping separate accounts is that you will always see the total amount saved as low. This will hinder any temptation to use it. Imagine you are saving about $80 per month in one account. Will you withdraw that money for your entertainment when you know how hard it is to save that amount of money.

6) Use online banking.

If you can, please use online banking. It is very easy to do and you can transfer all your money to another account without touching the money.

You see when we always have that feeling of a think wallet, we will know subconciously that we have a lot of money. Anything happened, however minor, we will straight away withdraw the money since we know it’s there.

7) Play “Kutu”

“Kutu” is the name of the game played here in Malaysia. It is pronounced as Koo Too. A group of 10 people will sit down and agree to pay $100 per month for 10 months. They will then set up a schedule on when to receive the money. For example, January is for Joe, February is for Tina.

When it is January, one person will collect $100 from everyone and surrender the money to Joe. The next month, they will collect all the money and surrender it to Tina. This will go on until all 10 people have received their share of money.

One thing that must be clear. All the 10 people must be very trustworthy. The system will be a mess if somebody start avoiding payment etc.

8] The Lost Key strategy

This is another favorite of mine. Surrender your ATM card to your spouse. But do not give her the pin number. This way, both of you cannot use the card to withdraw money. The money will be safe.

You just need to explain to your spouse that the reason you didn’t give her the pin number is due to safety reason. Not because you didn’t trust her. You don’t want this saving exercise to ruin your relationship now do you? 🙂

9) $1 doesn’t have any value

An item cost about $7, and you pay with $10 bill. Convince yourself that the $3 change (which is in $1 bill) have no value.

But of course do not throw away that $1 bill, just put it into your piggy bank. Believe me, you will achieve your target in no time.

10) Personal loan

This should be used only as your last resort. If you are having trouble committing to your saving habits. Apply for a personal loan with low interest and put all the money in your account as an emergency fund.

The advantages

• Your emergency fund is ready
• People will harass you daily if you didn’t pay
• You can even make money if you choose carefully

The disadvantages

• You are losing money from paying interest

Conclusion

Emergency fund is a must. If you don’t have one, start working on one. Just make sure it amounts to 6 months of your salary and the saving is fluid (You can take out the money anytime you want)

– I Wonder –
How do you save your money?

————- Personal Note ————-
The lost key strategy is a bit dangerous to be used. You may end up losing your card, or forgetting your pin number or worse both.

Luckily I still remember I have an account there.

Photo Credit – Striatic

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I just came back from the PC Fair in KLCC. As usual everything is just as crowded as ever. Come to think of it, PC Fair doesn’t change that much. You will be seeing the same companies promoting their product, maybe some gimmick here and there, but people still go there religiously (Myself included).

I guess the main attraction of a PC Fair is basically the freebies and the ease to compare between products. For example, if you want to purchase a laptop, just approach any laptop booth and you will have sales person running to you explaining why you should buy theirs.

Speaking of freebies, P1W1max is also there. And there are having one of the most interesting freebies in the PC Fair.

You know that box where a person will go in and there will be money flying around inside. The person must grab as much cash as possible within a specific time and what ever amount he manage to grab will be his for the taking. P1W1max booth is offering exactly that.

If you subscribe with Wimax at the booth, you will be given a chance to go into the Money Chamber and grab as much cash as you can. However you are only given 10 seconds to do so.

Anyone planning to subscribe, postpone that thought and go to PC Fair in KLCC now. You might end up with a few extra cash in hand.

Venue – KL Convention Center, PC Fair Hall 5, Booth 530
Date – 12 – 14th December 2008
Time – 11 am – 9 pm

p.s. Snap some pictures if you can ya. 🙂

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Summary – Remember & Be Super Productive.

Pop quiz

There is a guy who loves productivity tips. He reads every single tips on all productivity blogs and half of the time he is one of the most productive person on the planet.

The question is – What happened to another half of his time?

Procrastination? Nah.. He must have memorized all the tricks to overcome procrastination. Fall sick? Maybe but nobody can be productive when they are sick, so that excuse is acceptable.

The Real Answer

He simply forgets to be productive.

You may not notice it, but forgetfulness is one of the hidden enemy of productivity. Just look at our annual resolution. It’s almost the end of the year now, ask yourself, how many have actually been fulfilled? There will usually be a lot of resolution left unfulfilled. For some they have totally forgotten that they even have one.

Another example to illustrate how forgetfulness is productivity number 1 killer is handling our finance. We have read all there is to know about financial management such as how to save that emergency money, how to avoid impulsive buying etc but usually when we really want something, we will just buy it. This can only happen if we forget the whole idea of financial management. The worse case scenario would be when we deliberately forget all the tips.

How To Be Reminded Of Things & Goals

The only way we can overcome forgetfulness is simply to remind ourselves all the time. Listed below are a few simple ways to actually do that.

1) Make use of screensaver. Why on earth are we displaying piping lines as our screensaver. What good will that do. Put up encouraging words such as “It’s been at least 5 minutes since you do anything, do something now!!”

2) Constantly edit your wallpaper by listing down your priorities. I need to have pictures as my wallpaper. So what I did is to edit the pictures using Gimp to list down my top 5 goals in life (Beautifully written of course)

3) Set alarm for your work. After a while you will need to have a break. What I would recommend you to do is to set an alarm on your computer to ensure you will be able to get back to work promptly.

I suggest an online alarm clock – Kukuklok.com. You can set what kind of alarm noise you want from cockerel, classic clock, electronic and slayer guitar. Make sure you max out the volume of your speaker. That should work. If not, your spouse will threaten you to start working just to make the noise stop.

The simpler way is of course to set up the alarm on your cellphone.

4) Install ReminderFox extension to your Firefox. This is especially for those who use Firefox as their browser. You can install this extension (ReminderFox)and organize how you want to be reminded.

5) Paste reminders on the wall. I remember a scene from the movie – Hollow Man where the scientist had pasted a note reminding him to get back to work on the ceiling. Whenever he is getting sleepy or is lying on the bed, he will immediately see that note. I’m not sure whether he gets back to work after that or just ignore the reminder. But still, it’s one of the most efficient way to remind yourself.

Some other interesting places to paste the note is in your wallet, at the steering wheel of your car or on top of your television. The rule is to place it at the most viewed place throughout the day.

6) Use unwritten reminder. Pasting notes to remind ourselves is a great idea but when you have a few thousand things to remember, your house may not need the new repainting (It will be covered with that small notes pasted on the wall)

What you should try to do is to associate the things you see everyday to your list of things to remember. For example, I will always be reminded to check whether I’m out of gas whenever I come across a gas station while driving.

Try this with everything else. The best things you can do is to associate seeing money with saving. Imagine, seeing money and you immediately save it. You will be rich.

7) Ask a friend to remind you. Ask for help from your friends to remind you of your goals. For example, make it a habit to bring your friend when you go shopping. This friend is assigned to deter you from buying. Maybe by telling you it’s too expensive or it looks ugly on you.

If you have such friends, sticking to your budget or resolution will be easier. If you do have such friends, cherish them well.

– I wonder –
Any other ideas on how to be reminded of things or your goals?

———- Personal Note ———–
When I was 16 years old, I wrote my goals on the inside of my wardrobe. One of the goals include being a master in martial art. Of course, my fellow friends found out about my goals and they made fun of the goals. That in a way had deterred me partially from pursuing my goals.

Lesson learnt – ditch those friends.

Photo Credit – Mhatma

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I was reading through my favorite forum (Malaysian) – Lowyat.net when I found a thread about a new P1W1Max promotion exclusive for the forumner.

Basically, any Lowyat.net forumner that live in Klang Valley and in a wimax coverage area can apply to be included in the program. You will be able to use Wimax for 6 month (until 15th June 09) absolutely free of charge. Yes, my dear friend.. Free wimax with no string attached.

You can choose to continue your subscription after the 6 months is over or you can stop immediately. They will not charge you anything but you will have to return the modem they gave you.

So what’s the catch?

Once a month, they will organize a get together to gather feedback on how to further improve their service. That’s it.

If you are living in areas within wimax coverage (specifically at Klang Valley), you should really apply. If you didn’t like it, you can return the modem. I really don’t see any reason not to try this offer out.

Oh ya, you will need to hasten though, as only the first 50 subscribers will be given the chance. Just send a private message to the thread starter or email him at lowyat_p1w1max at packet-1.com. The offer will also be closed by 14th of December 2008.

Source – Lowyat.net

p.s. Personally, I’m quite amazed by the effort made by P1 staff to further improve their service. Anyone can sell a product, but to continually improve the product for better customer experience is very admirable.

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