Professional Documents
Culture Documents
AKPK
First Edition 2011
ISBN 978-983-44004-2-2
Disclaimer:
The information contained in this book is solely for educational purpose. It is not
intended as a substitute for any advice you may receive from a professional financial
advisor.
Agensi Kaunseling dan Pengurusan Kredit (AKPK) disclaims all and any liability to any
person using the information in this book as a basis for making or taking an action.
While all efforts have been made to make the information contained in this book
accurate, AKPK seeks your understanding for any errors or omission.
The names and details of individuals in the real life cases have been changed to
protect their identities.
1 Cash Flow
Management
Analyzing your cash flow can tell you a lot about the nature of
your income, spending habits and lifestyle requirements. To further
understand what cash flow means, let us get started by learning
about cash flow management.
Active I s derived from your employment or
income business ventures. The moment you stop
working or doing business, your active
income also stops. Some examples
of active incomes include salary from
employment and profits from businesses
Fixed
Are expenditures of a fixed nature. These
expenses expenses are generally necessities and the
amounts incurred are normally the same
every month. Examples include housing
loan and hire purchase installments,
rental payments, insurance premiums and
childcare expenses
Spending exactly what you earn does not count as a good cash
position either. When you spend exactly what you have, it means
that you do not have any savings in case of emergencies. Imagine,
what would happen to your cash position if you lose your job or
earning capability?
What is a budget?
A budget is a plan for managing your cash flow and is used to
estimate your future income and expenses. To put it simply, a
budget lists all your expected cash inflows and outflows to assist
you to make prudent financial decisions.
NEEDS WANTS
As time evolves, your basic needs may extend to more than just
food, shelter and clothing. Your want today, may become a need
tomorrow.
he decision you make with regard to what you need or want will
T
directly affect your spending.
Delayed gratification
Delayed gratification means delaying your wants to a later period
instead of having it now. Whenever you intend to make a purchase,
especially when it is a want item, take time to think whether it is
within your budget.
I n s t e a d o f b u y i n g a c a r, w h y n o t u s e p u b l i c
transportation?
Spending wisely
key to a successful
A
budget is to spend less
than what you ear n.
When you have the urge
to buy something, pause
and ask yourself the
following questions:
TIME
Plan your purchases to avoid making
multiple trips to the stores
LIST
Always have a shopping list to avoid
unnecessary buying
Compare
Compare prices at various outlets before
buying
10
Dr Azam did not have a budget to track his income and expenses.
Due to this, he was soon unable to keep up on the installments
on his two cars and could barely make the minimum payment on
his credit cards. To make matters worst he was 3 months behind
on the rental of his exclusive condominium.
11
Guide
on cultivating a saving habit
1
Always pay S ave at least 10% of your
yourself income
first
M ake your savings automatic
through a salary deduction scheme
or other similar arrangement
2
Motivate Set meaningful and significant
yourself with a goals to motivate yourself to
financial goal save. You can set short, medium
and long term goals
3
Make After having saved the first 10% of
savings your income, gradually challenge
a challenge yourself to save a little more
12
13
Assets include items such as cash, savings, real estate, unit trusts
and shares while liabilities include all types of loans including
borrowings from family and friends, credit cards debt, payments
for rental and utility bills.
14
15
I set a
create your own. All it takes are
three simple steps:
16
When you are in a good financial position with cash flow surplus,
then you are ready to invest. There are many types of investments,
including real estate, stocks and bonds in the market. Returns on
these investments vary in tandem with the risks associated. If you
plan on being an investor, be mindful of your risk appetite levels
before investing.
FINANCIAL SCAMS
When investing your hard earned money, be extra careful of get-
rich-quick schemes. Such schemes promise high returns with little
or no risk. These get-rich-quick schemes are frequently promoted
through various channels, with internet and short message service
(SMS) being the more common platforms. The next time you come
across these get-rich-quick schemes, be vigilant and remember
that if it sounds too good to be true, it probably is!
17
The offer is for a limited period only and you are asked to
sign up immediately
Browse websites of
BNM (www.bnm.gov.my) and SC (www.sc.com.my)
for further information
18
19
20
a. 1 - 2 months
b. 3 - 6 months
c. 8 - 9 months
d. 12 - 24 months
21
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