Tag Archives: insurance

How You Can Save $1300 A Month With $3000 Salary

I am no expert in this but I am very much aware of the importance when it comes to savings. Why is this crucial?

Opportunities or emergencies may arise surprisingly at any time. There will be a time when out of a sudden someone would want to sell their business, a company is looking funds to grow business, or there is that hot property going on auction way below market value!

Hence, It is up to us to ensure that we can grasp the opportunities when the time comes or at least prepare ourselves financially in event any emergencies arise. Here are the ways you can save $1,300 a month with $3,000 of salary.

Travel Cost

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We all have places to go each and every week. Like many, we would have to incur costs to travel to work. I’m staying on a suburb far from the city center, Kuala Lumpur.

It would normally take me more than 1 hour on busy days to work – that is about 28 kilometres (km) per trip, a total of 56 km one day. Below are the costs I incurred per month:

Fuel = $400 ($20 per day)

Toll = $200 ($50 per week)

That would be a high $600 a month! And I ain’t liking it.

Solutions?

I opted to use public transport instead. Since then, travelling cost was cut approximately half! Which is roughly $400 a month now for both car fuel and toll fees.

Not only this help save a lot money but also help to save my travel time and reduce stress of going through traffic jams.

Food intakes

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Another way to save is that I chose to cook my own meal – most of the days normally costs me around $100 – $150 for a month worth of food stocks or ingredients.

Aside that, I would simply buy my daily lunch supplies at cheaper price at a petrol station selling cheap cooked foods where I normally pass through everyday when I go to work – that is if I have too packed of a schedule. Costs me $3.50 per lunch box containing fried rice, an egg and a bit of gravy – pretty cheap and neat right?

But then again, there are days that we have that friends night out or Friday night outings so I wouldn’t mind spending a bit for that particular session since I have already saved a lot of margins on other areas. In total, food supplies would cost me around $150 – $250 a month.

Education loans

Yes, you read that right – education loan payments. I’m still actively repaying my education loans every month. That would cost me $100 a month which is not too high of a burden but still a great obligation to meet.

Phone bills

This would normally costs me $120 for my phone bills and I think that is still quite high for me.

I believe you can try and minimize your phone bills by finding better phone plans. If you can reduce your phone bills by $20 a week, that is $200 extra savings a month! and I’m quite sure there are way more awesome phone plan deals out there.

Home installments

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This would costs me $800 per month inclusive of maintenance. However, now that I rented it out – the rental income I generated with the right strategies gave me an extra boost of $200 – definitely great! Check out 4 Unbelievable Ways You Can Maximize Your Rental Income and 5 Traits of a good property to invest and get good rental for greater knowledge of how you can boost your property investing game.

Life insurance

I focused on life insurance because if ever I am faced with a critical sickness and I am unable to work any longer, my insurance would be able to settle all my bank loans pertaining my debt on properties owned. Not only that, the insurance package would also allow the accumulation of cash value where it would have a certain amount I can withdraw as extra money after certain period has passed – you can say that it is like investing while insuring yourself.

By doing so, I would not have to burden my family members to pay the housing loans if I am cripple and not having enough capabilities to work any longer. It costs me as low as $100 a month and it helped cover so much trouble for me in future to come. So if you find yourself still young and just started your career life, take up an insurance but be careful of scams and take up insurance coverage on areas you deem only important for the coverage you want.

Let’s say if your company already have unlimited coverage for your medical expenses, then maybe you can opt not to take medical insurance – for example. I would suggest you to take up insurance from reputable companies.

Have a read on “MRTT vs MLTT? Get yourself insured before buying a property” to get a good glimpse of general insurance knowledge that can settle all your housing debts in event you can’t work anymore. However, this condition will only work if your insurance coverage is more than your full housing debt.

Be mindful that insurance companies find it hard to consider your insurance applications after you are critically ill because it would be a loss to the company – sad truth unfortunately. So take advantage of your good health and ability to generate income now and apply one before the aforementioned happens alright! :))

Costs breakdown:

Car fuel and toll = $400

Food intakes = $150

Phone bills = $120

Education loans = $100

Home installments = $ 800

Life insurance = $100

Total expenses = $1,670

Amount saved = $3,000 – $1670

= $1,330! 

“A penny saved is a penny earned” 

~ Benjamin Franklin

So what can you do with these much savings?

1. Apply an auto-debit (Standing Instruction) from your salary account into your compounding bank account. Doing this will help you Making money while you sleep – the compounding bank account (ASB) just like Tony Robbins advised in his greatest book, “Money: Master The Game”.

2. Invest the money in stock market.

3. Save all of them as your next home deposit.

4. Give to charity (help people in need). Always bear in mind that Giving to Charity Makes You Richer!

5. Provide some money to your parents or family members as presents.

6. Gather enough money and be ready to launch or buy a potential business.

7. Put it in your flexi-bank account to reduce your monthly home loan interest (yep, that’s what it’s called in banks, flexi-bank loans).

And the list goes on….

But whatever it is, always bear in mind that for every dollar you saved would give you better chances of grasping the opportunities when it comes. Have a read at 5 Simple Ways To Save Money to get bold ideas to save money better.

You can’t simply start saving when the opportunity or emergency happened right there and at that time right? That is insane! If you start saving at that very time, the opportunity would have gone into other people’s hands.

You need time to save money enough to be able to take advantage of the opportunities that falls before you. Never the less, knowing that you are reading this article till the end would mean that you care for your financial securities and your future – that YOU want to make that change! Good luck hustlers!

MRTT vs MLTT? Get yourself insured before buying a property

Any other people should be aware and act to include themselves with an insurance coverage once they are able to afford one. You can consider yourself lucky if you start paying at a young age because the younger you are – the smaller the insurance premium you have to settle. I have heard many stories where people buy a house then suddenly – wham!! They got into a major accident and unable to work again. What happens next? He couldn’t pay the loan installments, banks put his house on auction (lelong), and the poor fellow lost his home – all because he didn’t get himself insured. Maybe you are thinking it’s too early to get insured or maybe you are concerned that it would take huge financial impact on you. My advice is get yourself insured while you are still healthy because insurance company would have high chances of turning you down if you apply when you are critically ill. Believe it or not, you can get yourself covered for RM300,000 by only paying RM 100 a month, small sum for a big life changer. Here are two types of insurance for starters:

Mortgage Reducing Term Takaful (MRTT)

MRTT basically will only get you covered on a single property and it acts as a safety mechanism for the banks in the event that the borrower (us) gets a total permanent disability (TPD) and could not work anymore to make the bank loan settlements. However, with MRTT – the banks will still be paid in full by the insurance company on the whole property price if the borrower faced TPD.

These days MRTT are made mandatory by banks in Malaysia because there have been many cases years back where borrowers make MRTT as an optional matter and in the end faced TPD. Resulting their properties to be auctioned and banks consequentially have to sell the property at lower price. MRTT will normally be included as part of your bank loans during your loan application process. Have a read on “4 Great Tips For Getting your Loan Approved” for better insights to have a successful loan application. For MRTT, you may get covered for only one property and that the monthly payments reduce over time (which is good, maybe?) – but so does your coverage (covered only in specific period) gets reduced and the coverage will no longer be available to you after the contract period ends. MRTT is especially beneficial for people with less dependents/ family members.

Mortgage Long Term Takaful (MLTT)

Unlike MRTT, MLTT covers you forever but you will have to pay forever until you pass away. Well it does cover you forever but it also requires you to pay forever? how do you take advantage of this? The answer is to start as early as possible! The earlier you start paying your insurance, the cheaper the premium you will pay. Also, the amount you pay monthly will be fixed forever – unless you are willing to increase the amount of  insurance coverage when your salary increased. You can decide whether or not to top up your coverage anytime in futures to come.

Finally, the best thing about MLTT is that if you are faced with TPD – your house will be fully settled completely. Let’s say your property loan is RM 200,000, your insurance stands at RM 300,000 – your house will be fully paid and the balance of RM 100,000 will be distributed to your family members 🙂 This way your family won’t suffer too much of a harsh time in your death and you  can rest easy knowing your family members are in good hands.

Key Notes:

  • You may fall critically ill anytime and when you do, you may not able to work, when this happens – you can’t pay your bank loans
  • In the end, you will lose your property to lelong (auction) – you may have no place to stay anymore, family members will be in hard times.
  • The younger you start paying the premiums the better, because the premium paid is determine by your age, the younger you are, the lower your premiums will be.
  • In event you can’t pay your loan due to critical sickness, the insurance will help settle all your loans, provided you take an insurance that covers the property price your purchased. Start young and get protected fellow hustlers!”