How do we look at the money in hand?
We receive our paycheck monthly and immediately allocate several parts of it to pay our personal and household debts, our children's education and living expenses, our very own living expenses, et cetra et cetra!
To be able to become a responsible person, a good money management skill is required so that the future will not be bumpy, hazy or a liability. A general misconception among Malaysians all and sundry is that practicing good money management will lead us to become a rich and wealthy person with high purchasing power. This is utterly untrue!!
Practicing and cultivation sound knowledge in personal money management will surely avoid yourself from being in a financially constrained life and this will undoubtedly would invite an adverse and strained life not only to us but also to those who are on our dependent list.
In a newspaper article dated February 27, 2016 (THE STAR), it was reported that individual bankruptcy cases are down by 18%. This should be seen as a good progress in arresting the high rising number of people who are declared bankrupt annually. Malaysians in general are being more aware in managing their own personal finances. Keep it Malaysians!
Managing personal finances in Malaysia would be a daunting task going into the future at the back of rising cost of living and escalation of demand in obtaining quality life. Malaysians should abstain themselves from committing to financial liabilities beyond their monetary capacity to finance their debt.
A quick awareness on managing money will normally begin from understanding the role of money in our everyday life's activity. The Equation below explains it.
You might already know the functionality of that equation on the left but ask yourself just how much depth are you allocating in to practice managing expenses and allocating savings within the parameter of your income?
Just how many of us actually due to greediness and distortion in understanding, are managing their finances beyond the boundary of the income circle? I believe many, though i wish i am wrong!
The box on the right illustrates a simple yet profound insight into acquiring a sound and good management of personal finance to begin with. Embrace the concept and work your way through achieving the financial freedom that you aspire for.
