How to maximize your money to achieve your goal?

Money and time are valuable resources. So, it is important to understand how you can maximize the use of money so that you can achieve your goals.

In order to maximize the usage of money, you can split the usage into 3 categories: –

1. Necessities (using “optimization” technique) – these are the things you must spend money on, for example, insurance, food, rental, kid education and transport. So, you need to “optimize” the usage of it, i.e. spend less but getting the same results. This can be done by doing cost comparison or spending on shops which offer long term discount. If you are driving to work alone in a car, consider whether it is possible to car pool to save on transport cost? If you are eating out, check is there any restaurant which can offer better discount?

• “Want” item (use “fix the budget” technique) – these are things which are good to have but not necessarily give you great benefits considering the cost. Examples of this category of items are luxurious handbag, watches, big cars, etc. A more expensive handbag would have the same function as a cheaper bag. So, spending on it might only give you higher status, perhaps? In this case, I suggest you to fix a budget on these items, say 2-5% of your salary every month. You shall not spend more than the set budget. Eventually, you will see you are able to save more as you have set the boundary of your expenses on the “want” item. At the same time, you still enjoy the great feeling of having what you want (may not be instantly, but you will eventually get it). It will also give you motivation to earn more money so that the money allocated to these items will be higher.

•  “Goal” item (use “investment” technique) – Goal items need more effort to get them. Hence, investment shall be used to get better return. Saving money slowly is no longer working to obtain a goal. Commit to put a little bit more time and money to invest, grow your remaining saving better. If you save RM 500 a month, you will have RM 60,000 after 10 years. However, if you save and invest RM 500 a month to an investment which gives 10% a year, you will have RM 463,500 after 10 years. nearly 700% different! Invest to reach your goals.

************************************************************************

You can receive constant broadcast message relating to wealth creation to financial freedom through Telegram. Click here to subscribe to the telegram for the weekly newsletter.