There are times when I would spend months just to decide whether I should buy a particular item – the more expensive it is, the longer I will take. For example, the new laptop that I bought took me a whole 6 months to think about it – how much do I need to pay every month, do I really need it, what are the things I want to use it for, is there any cheaper option, bla bla bla. Yes, that is the type of person I am (but funnily, I don’t mind spending money on my family).

Sometimes, my parents feel both happy and sad after seeing me like this. Happy because I’m a financially conscious person and know how to manage my money well …sad because I’m reluctant to buy something which I really wanted (I don’t really have many WANTs).

Then one day, my dad told me a story about his friend. This friend of his is a very nice guy but just like me, he is also a pretty thrifty person. He would only spend when there’s really a need to do so. Otherwise, he would normally convince himself that he did not need it. In case you’re wondering, he’s actually quite rich. Few years ago, this guy was admitted to hospital due to cancer. Fortunately, he has recovered but the experience has completely changed his life. Nowadays, he still manage his money wisely but he is willing to buy the things that he wants.

After sharing with me that story, my dad said that it is good to spend wisely and even better if I don’t have too many WANTs (a lot of young people nowadays have too many WANTs that their credit cards could not accommodate). But life is short, and we should pamper ourselves once in a while by buying the things that we want. And there’s no need to justify every single thing. If you want something, can afford it and it won’t jeopardize your financial condition, then just buy it. Just be sure to utilize and cherish that thing after that.

Thinking about the story my dad told me and the advice he gave me, I feel that it is true. Life is short and unpredictable. If we don’t pamper ourselves now, when do we plan to do that?

Save for the future, but also use some money to pamper yourselves. We only live once after all.

p/s….Well, I’m not asking you to become like those people who have unlimited WANTs though….those are pretty unhealthy habits.

It seems like most Malaysians are worried about our country’s economy but are not able to control themselves from spending more. However, compared to previous sales, most Malaysians ARE spending lesser, which is a good sign.

At the end of the day, it is important to spend on your NEEDs but it is even more important to know your limit. Always have the right plans which will ensure you are ready for year 2009, which is said to be worse than 2008.

But that does not mean all of us should dig our head into the mud and be prepared for doom. Be optimistic and always hope for a better year ahead. Without hope, we’re nothing.

Have a very happy year 2009 folks.

At the end of the day, the consumer-related companies earn the most. Those people who cannot pay will have to return their homes/cars to the banks, and some even forced to declare bankrupt. And when people cannot pay, the banks will not gain any benefits. They will start losing money if this continues. True, they can take back those cars and real estates, and resell them but they can only resell them at a much lower price. And reselling does not mean there will surely be a buyer. Those cars and real estates might stay with the banks for quite a while due to the poor economy.

In my opinion, I think all these started from the point when consumers (us) start to spend money like water and buy things which they cannot afford, and even borrow loans which they cannot pay (and the banks approve loans without thinking twice. Few months ago, the banks were competing fiercely with each other to get more people to apply for house and car loans. When competition is that fierce, the banks will become more linear when it comes to approving those loans).

So how serious is this?

Frankly speaking, I have a feeling that our country is actually undergoing such a situation, albeit in an early phase. True, encouraging people to spend more will certainly boost the economy since it improves consumer spending. But it does not take away the fact that people ARE getting poorer with the high inflation rate (and companies ARE doing badly due to the bad economy. Do bear in mind that not all companies are involved in consumer business..that’s why there is a possibility of job cuts).

I think perhaps it’s time for people to start being frugal and be prepared. And I do hope that Malaysia will not end up like US, though my gut feel is telling me our country is indeed heading towards that direction (maybe not as bad).

Last but not least, good luck to us all.

Avoid using credit card

It’s pretty hard for you to keep track of your credit card debt when you’re outside. That’s why always try to avoid shopping with your credit card unless it’s really necessary. The next thing you want is to sign too much and unable to pay, which will bring us to the following point.

Pay your debts on time

Always remember to pay your debts. Always ensure you have enough money to pay all of them including your loans and credit card bill. Failure to do so will cause you to pay extra $$$ in terms of penalty, which is totally unnecessary.

Don’t make unnecessary mistakes

Drive slowly and don’t exceed speed limit, don’t overtake at double-lined road, don’t park illegally, etc. All these can be avoided if you are careful enough. There’s no point to pay few hundred bucks for these silly mistakes. Avoid them at all cost.

Sell off your unneeded stuff

Similarly, you can set up your very own yard sales. Sell all those things that you no longer have use of on eBay or garage sales, etc. They will help you to earn some money.

Know your rights as a tax payer and employee

Certain companies provide the employees with benefits such as optical and dental. Always remember to check those out and fully utilize them. Also, know your rights as a tax payer. What can you claim and what you cannot claim. For example, buying books is a good investment and you can also get tax relief from that.

Plan your trip

Getting up earlier before the morning rush hour, and going back home after evening rush hour will definitely help you save up some fuel cost. Also, plan where you are going before you start your journey because if you end up lost, your car will surely burn up more petrol than necessary.

For now, I cannot think of anything else. Hahhaa. Do let me know if you can think of something which I have not listed here.

Enjoy!

For now, I will have to resort to few ways in order to survive this incoming recession.

Stop eating outside if possible

Try to buy some vegetables and stuff to cook at home. I know it takes a lot of efforts and time but it does save significantly more. It’s healthier too. Avoid eating “good” food that might cost you a bomb. I used to eat “good” food quite often in the past (that explains why I have high cholesterol) and it’s not cheap at all. Maybe this proves to be a turning point for me to save money and the cut down on my cholesterol.

Stop buying unnecessary things

Always remember about the assets versus liabilities argument. We all have a lot of WANTs and sometimes, these WANTs might take up a more important role in our heart than our NEEDs. That cool looking gadget, or that beautiful dress. Oh wait, there are sales and things are cheap! Should buy while we can! No. We should not buy if we cannot afford. Remember that cash is king now. Don’t be tempted to buy unncessary things because in the end, you will not know when you might need those money. Also do bear in mind that the job market can be quite unstable nowadays. Focus on the things you need, and also on assets which will appreciate, if possible. For example, it’s better to buy gold (commodity) now than to buy that shining looking diamond. And if there’s really something you really wanted to buy, seek cheaper options such as buying second hand items or discounted items (only if you really want them). Also, sell the things you don’t need on eBay or Lelong. That should help.

Save up

Try to save up to 10% of your monthly income (minimum). Minimize on unnecessary spending, as mentioned in the point above. The saving which you accumulate will be useful when things don’t go your way. You can also invest them in other places if you want to.

Try to earn some side income

I’m currently trying to earn some side income by doing extra works at home – writing reviews online, talking crap, etc. Some of my friends said the total amount I earn from these is not that significant if compared to the amount of efforts I’ve put into them. True, they’re not wrong but to me, every penny counts now. It’s better for me to earn some side income than to sit idling around. If I have something (WANTs) I really like, I will make sure I’ve earned enough before I can buy them.

Improve myself

Whenever I am free or at home, I will try to read more non-fiction books to improve myself and to motivate myself. I feel that these book teach me how to lead a more meaningful life. Also, I will read biographies of the people I respect such as Warren Buffett. I like to know what mistakes have they done and ensure that I will not repeat if I were to follow their footsteps. Also, I will try to improve my writing skills, my English and my technical skills (though this takes up quite a lot of time, I must admit). Who knows, maybe all these soft skills will prepare me to embrace the incoming recession.

Always have a backup plan

What if I’m being terminated by my company and become one of the many jobless people out there? I need to ensure that at that time, I will be good enough to join other companies in order not to remain jobless. What if my side income works don’t work out? I will need to see if there are any other opportunities. What if my stock investment doesn’t recover? All these things have to put into consideration and always have few backup plans before the real thing actually hits you hard on the face.

All these are based on my own personal opinions. I’m not sure about you all. But there’s one thing which you all should know, start to save more and keep your cash with you. Work harder to earn side income. And keep on improving yourselves. But once in a while, do remember to take a break.

Hope it helps.