Every Young People Should Know – Financial Guide for Young Malaysians that Just Started Work

Every Young People Should Know – Financial Guide for Young Malaysians that Just Started Work

There was a time when I thought I can get my hands on the pretty dresses and heels upon getting my first pay slip, but the reality is always so different from expectation. I almost felt that I was more broke than when I was a student. There are a lot of unexpected expenses once we step into the working world. Even going to work has cost. You need to dress up appropriately to work, nevertheless, there are costs for your transportation and food.

A lot of young working adults are facing the same situation. Most of us are living payslip to payslip.

According to a report in 2017, only 18% of working adults in Malaysia can last for three months without working, while only 6% can last for six months. Without an emergency fund and proper financial plan, you will be stressing out once you face a sudden unemployment or a financial setback.

So, today we are going to discuss something that your schools never taught you – Financial guidance upon reaching your adulthood. Let see what can we do to achieve financial freedom quicker.

#1 Avoid Getting into Debts

Getting into debts is a nightmare for everyone. As a fresh grad, you have to be extra careful. Don’t let yourself get into any mess. Don’t overspend with credit cards, don’t sign up to any long-term commitment before careful consideration.

Unfortunately, some debts are unavoidable. The first debt you might get into will most probably be your PTPTN loan. Once you start getting your monthly salary, you have no excuses for not repaying your PTPTN loan immediately. Repaying your loan on time will minimize the interest and ensure your good credit ranking.

If you need to own a vehicle, you have to think about every aspect of getting the car. “RM400 per month, I can lah!” Wait, you haven’t count the road tax, insurance, petrol, parking and car maintenance cost! Here’s an article that shows you the monthly cost of owning a car, it was written in 2014 but it’s still relevant, so let’s read. My advice is, build your emergency fund first before commit to this.

Nonetheless, don’t buy expensive luxuries that will get you into debts.

#2 Income – Savings = Expenses

Most people fail to build their savings because they never plan ahead. Many people think that they just need to keep whatever left after spending. However, this is not how things work.

I’m already earning very little, you think to save money so easy ah?” It ain’t easy. But we have to think ahead.

Once you get your first payslip, open a basic savings account solely for savings. Start with an amount that you’re comfortable. For example, if your first job’s income is RM2000, you can start by keeping RM200 per month (RM100 if you have a lot of debts and loans, RM300 if you have no commitment at all). As your income increases, don’t upgrade your lifestyle immediately. Instead, upgrade your savings plan first. For example, when you’re getting RM2500, save RM500; when you’re getting RM3000, save RM800.

That will be your emergency fund and your capital for any plan or investment in future.

#3 Spend Your Money Wisely

Money is meant to be spent. However, there a huge difference between spending and wasting. It’s good to pamper yourself for working hard, but TGIF and YOLO should not be your excuses to splurge.

Before committing to a fixed expense, you have to do your own research to ensure every penny is well spent. Which car has the best money value, which gym suits your needs and budgets, which telco plan is the worthiest, you need to check out all information before throwing your money.

No one can stop you from spending your hard-earned money the way you like. But since it is hard-earned, let every penny makes an impact.

#4 Guard Yourself

Perhaps no one likes to talk about insurance unless you’re an insurance agent. The truth is insurance can be very handy when you need, provided you get the one that suits you.

As for young people, you should consider getting a medical insurance. You might think you can give it a pass because you’re still young and healthy, and you can always opt for government hospitals. However, there will be some circumstances that you may really need the treatments from private healthcare. In addition, there are a lot of premium plans that provide a lower price for younger people and will never increase the price as your age rises. Some of those plans even come with cashback values.

Anyhow, it is worth setting aside a small amount of your income to ensure that you have sufficient health and life insurance coverage, without compromising on other saving and investment needs that you also will have.

On the other hand, overspending on insurance isn’t always a good thing, regardless of what your agent might be telling you. So, stick to the core first. Be firm and say no to anything that is not a necessity.

#5 About Investment

Rich people always tell others that they get richer by investing. This is a fact. However, every investment comes with risks.

Again, I’m not stopping you to invest your money. Just don’t do it blindly and recklessly. Always remember a theory – If it sounds too good to be true, it probably is. There are a lot of scams that will bring you to a total loss. Therefore, you must do a lot of research before investing your money. Don’t simply listen and believe to random financial advice.

The most important point is, don’t drain all your money to invest. You should always keep an emergency fund so that you wouldn’t lose everything when things go sour.

For those who don’t have enough investment knowledge yet, you can consider keeping Fixed Deposits (FDs). The profit is small (around 3.5% to 4.5%), but it is a good way to lock your savings temporary to avoid overspending. If you have built a successful savings habit like in point #2, then you can start buying FDs for every RM5000 you saved.

Let me do some calculation for you: If your deposit amount is RM5000, and you buy a 12-months FD with 3.5% interest per annum, your maturity amount will be RM5177.83. This might sound little, but if you have saved another RM5000 after one year, you top it up to become RM10177.83, after one year it will become RM10539.82. The profit still sounds little, but the total amount is significantly bigger.

You can play around with unit trust if you want greater profit with low risk. When you have excess funds, you can go for blue chip stocks that will possibly bring back high return. But for a start, don’t go for anything with high risk unless you’re really confident.


For every young people that have secured a job, congratulations! Work hard and work smart to heat up your value in the job market. We in TopNotch wish you have a good career and a successful financial arrangement that will lead you to a comfortable life in the near future.

It is not easy to be an adult because you have more responsible now, but since you’re still young, let’s go all out to achieve your goals and dreams!

At the end of the day, you have nothing to lose 😊

By | 2018-01-08T00:05:00+08:00 January 8th, 2018|0 Comments

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