Snowball Concept
Summary - Yesterday it's big to small.. Today it's small to big
Today I'm going to prove to you that there are always two ways or more to see at things and both of them can be correct. Yesterday, I highlighted that we should always finish the biggest task to motivate us. Apparently there is another concept I just found while reading in the internet that describe it the other way around.
That concept simply urge us to finish the smallest to motivate us. See... Exactly the opposite but still true. Let me explain this concept.
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3 Tips To Save Money On Hari Raya
Summary - The formation of "Baju Raya Recycling Club"
I was chatting with uncleJ about jokingly forming a recycling club. Not to recycle waste, but to recycle the old "baju raya". It would be a great club with so many activities don't you think? Just imagine the cash we save.
So then I started thinking of other ways we can reduce the expenditure of this year's Hari Raya. I know for certain you guys must have more brilliant ideas on how to further save money on Hari Raya, please share ya... maybe this club can be realized after all :)
Please note that wearing brand new clothes to celebrate Hari Raya is actually a "sunat". I'm just suggesting recycling if the old clothes is still in good condition or maybe we are on a tight budget. Please correct me if I'm wrong.
Well here's what I can come up so far
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1) Plan your travelling
Back home, we always buy ice and newspaper after Solat Aidulfitri, this way we don't need to waste the fuel just to get ice or newspaper on separate occasion. Similarly, plan your visit to your friends' houses. Going to Sungai Petani then Alor Setar and again to Sungai Petani is really poor planning. :)
2) Buy auctioned kuih raya
Kuih raya is the essence of Hari Raya, so I will never suggest not buying / making them. But for those who buy cake or kuih raya (kuih tunjuk), maybe we can buy them as late as possible. Every year, my family will be excited to go buy those "kuih tunjuk" at midnight of the last day of fasting. It is said that everything will be auctioned off at ridiculously low price. However, almost every year, my family will give up and prefer going to bed early hehe :) (talk only)
3) Reduce or stop buying firecrackers
This is again a sensitive matter. Hari Raya is actually meant for children. They are the ones that enjoy it the most. And what I enjoyed when I was one of them was playing firecrackers. Back then we had millions (exaggerating) of types. So this it totally up to you. Today there's already one case of firecrackers exploding the fingers of two children (Berita Harian 1st Oct).
My suggestion if you really must play, is to reduce the amount drastically. It is better if we don't play it at all. Those children with the finger hurt surely don't want the accident to happen, but it did happened to them. So there's no reason to let our children have the same risk. Preferably I suggest to not buy.. they're just not worth it.
/end list
Hari Raya is one of the most awaited day for us muslim. And most of the time, the celebration is supposed to be grand and better every year. This is where it is wrong. The whole idea of Aidilfitri is not about celebrating the end of Ramadhan (where we can take revenge on inhibiting our desire and go on a shopping spree). I'll try to elaborate on that in my coming Ramadhan Tribute Series.
I now opened the club for registeration. Anybody can join in but in order to join, you have to each pay me RM10 (joking). No la.... To join, just share with us how else can we save during this Hari Raya.
- Other Related Entries -
Pay Yourself First - Method to save money
--------------Personal Note-------------
Let me be the first to wish you all Selamat Hari Raya.. Maaf Zahir Batin. Since I can't send all of you personal "kad raya", this will be it :) Please forgive me if there is anything I wrote that may offend you. In the end, I'm here to make friends... and I am grateful to Allah for introducing me to you. so again, may everyone has the best Raya ever!!
Aidilfitri mood is in the air!!!
Labels: aidilfitri, finance, tips
How Some People Change Cars Every 5 Years
Summary - Some people change new cars every 5 years, how did they do it?
Today I went to the bank with a friend of mine. He is one of the main supplier for the mill and I know him way back when I'm still in Johor.
He is driving a new Hilux (very expensive and new). I remembered only few years back he was driving another branded new car (I'm not sure what the car was but it is definitely quite new)
When I asked him, he said it is his practice to change a new car every 5 years and this will be practised until he died.
According to him, he had fixed a monthly payment of RM800 just for his car. When the car is 5 years of age, he will trade that in when it is still high in value for a newer car. However the monthly payment shouldn't be more than RM800. Meaning, he will pay RM800 every month for the rest of his life.
According to him, this is better than maintaining an old car because -
- He will be able to drive any car he wanted
- People will see him as a successful businessman
- Almost no maintenance cost
- The money forked out for maintenance for old cars usually just as much as buying new car
- He does not have to worry a bit about maintenance of the car and its reliability. It's brand new..
- Some cars come with free bonus such as free roadtax and maintenance for couple of years.
- Almost everyone suffer from debt through out their life, why not enjoy from it.
One thing for sure he is a non-muslim. We muslim, were raised to try to avoid or settle all debt at all cost. If for example, we die with some debt unsettled, the debt will be a burden for us in the afterlife.
I am actually not very sure how other religion view debt unsettled, is it accepted?
For us muslim, what do you think of the idea? Agree / Disagree? :)
--------------- Personal Note --------------------------
When will I finish paying all my debt. Sometimes, it feels like it is a never ending juggling. One debt settle, another waiting. After I'm done with my car, I'm hoping to straight away use that allocation of money to buy a house.
Are debt really becoming part of our life already? How do you guys manage your debt?
Pay Yourself First
I don't know about you, but when I first started working, I can't seem to be able to save money. I received my paycheck, withdraw some to pay this, another some to pay that. By the time I reach the next paycheck, the balance in my account is zero.
Then I think to myself : "Of course la, just started working, obviously will spend a lot to establish myself. I'll wait for my next increment and by then I must have extra money to be saved every end of month"
2 years pass by just like that, and with all the increments, revision and bonus, I still have zero balance at the end of the month. Now something is wrong!!
Later I learnt of a concept which is "Pay Yourself First". Buying a new handphone is not considered paying yourself first ya :). Every month when I got my paycheck, I must take out some money and put it in another bank before anything else. And just forget about the money ever saved there.
I've already practised this for quite some time and guess what, my lifestyle seem to automatically adapt to my budget, rather than the other way around. Previously, I considered this an impossible thing to do and I may end up drawing the money out of the bank (Actually I really forget I got the money there eheh).
Well it's very true what they say - "Lagi besar periuk, lagi besarlah keraknya"
--------------- Personal Note --------------------------
A true confession from me. I am a shopaholic. Not in the common way, I don't go to the mall buying everything I see, but almost everytime I will think of something to buy, how to spend money. laptop, ram, 320GB HD, domain name, car accesories, and many more. I don't really need them. But it give me great pleasure when I am on a shopping spree. Luckily I still have some control on this. Anyone else out there the same with me?
Labels: finance, money, pay yourself first, shopping
Credit Card Scam..
A couple of month before, there was this one girl, with a very excited tone of voice call me. I have no idea how she got my number. but then she maybe just trying her luck with the number. Basically, i just won some lucky draw said to be co-organized by my credit card bank. Obiviously my personal firewall was triggerred. I have read so much on scam, that i know immediately this is one of those.
However, instead of hanging up, i choose to see how the scam goes. hm maybe due to the seductive voice of hers also :). but anyway.... she was telling me that she is from a new company that randomly choose credit card owner and offer them complimentary VIP card that allow me to have special discounts and even cash rewards.
She then asked my name as if to confirm my identity. I gave her the wrong name, and guess what? She sounds so excited as if I have just gave her a boat or something. What training they must have been through. So good in acting. She asked me a lot of questions, And finally she asked for the 3 digit at the back of my card.
For those who do not have credit cards, in order to do transaction online using credit card. You will need these
- Name
- Billing address
- Card no.
- The 3 digit at the back of your card or better known as CVV2. For other cards, you can refer to the image attached.
Back to the story, I just then hang up the phone. and started thinking. What if I memorize the three digit number and maybe erase it using liquid paper or something. They are too exposed, anybody with a good memory can memorize.
--------------- Personal Note --------------------------
Im sorry for the late update. Things have been very busy lately. And I maybe going back to my hometown in Kedah this weekend. But i will be updating here via email. Long time already, since I went back to Kedah. When I was studying, I always tell myself, once I work and
have money, I will go back as often as possible. As I said in an earlier post, we always need
to remind us, where we came from. :)
It is called snowballing and it is a widely used methods to clear debt. An example will illustrate better.
One man had 4 debt to settle, house loan, car loan, credit card and study loan. According to Snowballing Concept, the man need to figure out what is the minimum amount he can pay for each loan. He will then have to figure out which loan is the lowest amount.
In this specific case, his credit card is the lowest at about RM3000, so what he should do is to pay all other loans at the minimum amount. And the remaining money is used to pay off the credit card. For example, after deducting all the minimum payment to other loans, he still have RM500 cash. That money must be used entirely to pay off his credit card. In about 6 months he will finish paying the credit card.
Then he moved to the next loan with the lowest amount, let say study loan. Previously he pay a minimum of RM200 per month, now he must snowball the payment and use the extra money from not paying credit card (RM500) and pay the study loan at RM700 / month (Snowball). This goes on until he finished all his debt.
I actually think that this make sense. To finish all debt the lowest ones first. Now compare this entry and the entry yesterday. Both of them emphasis exactly the opposite things and yet both of them is correct.
What do you think? Is this snowballing strategy practical?
- Other Related Entries -
--------------Personal Note-------------
I still have long way to go to finish my loans. And when those loans are settled, I'm very sure I will start with my house loan. So it's really a never ending story :)
One thing for sure, when we owe someone, we have to pay them. Even one cents. I'm very particular with this, because it will be very disappointing when somebody owe me money and he didn't even bother to pay me back. He even look at me as if I'm the one who owe him money. And that is why, I stop lending people money except for family of course. Come be my family huhu