NEW year resolutions, but the question is, how many are able to keep them?
It is best to have resolutions that you can “resonate with and align with your values as that can keep you motivated,’’ according to a report.
Whatever your resolutions may be for the new year, setting financial goals to retirement planning should be a priority given the many warnings of a challenging economic climate ahead.
StarBiz spoke to several people on money management in 2023 in view of the rising interest rates and inflation.
Some of the questions were centred around financial goals, the value of money, impulsive buying, travel, savings, retirement fund and investment options.
Rashid, not his real name, said his financial goal is to keep cash because when there is a market downturn, he wants to pick up depressed counters
He is not worried about inflation and is prepared to take on more loans and pay the loans slowly. He wants to buy depressed good value companies and his idea of stretching the ringgit is to pay less of his loans.
He will continue to splurge on big ticket items and believes retirement savings is important. He will continue to invest but will avoid foreign exchange and cryptocurrency investments.
Claire Khoo, 42 and a mother-of-two said her financial goals are to protect her emergency fund and retirement nest egg.
“I’m also going to live a little more and enjoy my earnings,’’ she said.
She is a little worried about inflation and the effects on the value of money but remains hopeful.
“Staying at home during the pandemic had helped me to increase my entertainment and travel savings which I intend to spend as planned. This will be on upgraded experiences such as travel, and the occasional fine dining.
“I am more careful with how I use my money these days and I buy fewer items but when I do buy, I choose quality, more expensive items.
“I indulge in luxury purchases such as watches and bags and I have been fortunate that my few purchases have either retained or increased their value. For emergency savings I prefer robo advisers over fixed deposits (FDs),’’ she said.
As to how she plans to make the ringgit work harder for her, she said: “I honestly do not have an answer as we have two school-going children, and my spouse and myself have returned to the office, thus the cost of living has increased tremendously.’’
She went through an impulsive buying phase especially during the pandemic and said that “the end of the pandemic has helped me return to my usual spending habits.’’
Having a retirement fund is crucial and that “form the basis of my career decisions all these years.
“I would avoid cryptocurrencies and scrolling through eCommerce platforms,” said Khoo.
Rahman (not his real name) said he is not good with money management.
Working from home on a freelance basis, he “thinks the financial markets have not recovered yet.’’
“So I am not buying anything major at least in the first half of the year, including shares,’’ Rahman said.
Berenice Then’s financial goal is to try to follow the 50-30-20 rule of expenses, savings, and investments.
“Inflation has been a continuous concern year-on-year, but more so now.
“Somehow, it feels like several years of inflation happened within this year alone,’’ she said.
She has made it a habit to monitor her day-to-day expenses, which was sufficient to manage her finances previously.
“Now, I need to scrutinse my purchases, not just monitor, usually by asking if the purchase is a need as opposed to a want. The current situation calls for extra caution in all decisions relating to money.
“But of course, there must be a balance –there’s always a small pot for simple indulgences to retain joy in living. Otherwise, what’s the point?’’ she said.
Her view of stretching the ringgit would be by eating out less, comparing prices more, making smarter investing decisions, and relying on do-it-yourself jobs as opposed to engaging external vendors.
She admits she is an impulsive buyer but “only where my sweet tooth is concerned. I can’t see that stopping in 2023. But I am usually careful with my big-ticket expenses.
“I like to be informed before I spend, so I tend to do some prior research to ensure I get a good deal. ‘’
“Even more so now with the seemingly uncontrolled rate of inflation.
“It wasn’t that long ago that experts said we could retire with RM300,000 in savings, more comfortably with RM500,000, but even that’s unlikely to be enough now.
“So, I’ve been on the lookout for stable investments such as FDs with attractive rates – to grow my retirement pot a bit more,’’she said.
Risky investments and unnecessary travels are what she planned to avoid this year.
