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Fixed deposits are to save cash that you might need quickly in an emergency, but still give you some interest. You can park your emer-gency savings here. Insurance is used to cover you/your loved ones in case you fall sick or die.

In an ideal world, you’ll have a combination of all three. And depending on your situation and objectives, one will have more prior-ity than the other two.

7 Why can I never keep to my budget?

Either your budget is unrealistic, or you don’t have discipline. Or, probably a combination of both.

To help make your budget real-istic, track your spending every day for a month (the more months the better) using a mobile application. Look at where most of your spend-ing goes versus what you initially planned.

Then, benchmark your budget against financial budgets you can find online. There are many, but here’s a common guideline: 50% on necessities (housing, transporta-tion, utilities), 30% on wants (food, entertainment, holidays) and 20% on financial future (savings, invest-ment).

To help make you more disci-plined, remember that environment trumps motivation when it comes to sticking to goals. So put yourself in an environment where you’re not constantly tempted to spend more money. Perhaps fewer trips to shop-ping malls, fewer nights out with your wilder friends, and less time browsing shopping websites.

8 hoW much should I actually have saved

up for retIrement?As an absolute baseline, the EPF

has a guide on the minimum amount you should have in EPF account one at every age. Their minimum target for Malaysians is RM 228,000 at age 55. Other milestones:

l Age 30: RM 29,000l Age 40: RM 78,000l Age 50: RM 165,000

Of course, your retirement fundshould not only consist of your EPF. A CNBC article suggests some higher targets:l Age 30: Your annual salary (i.e. if

you earn RM 36,000 a year, you should have RM36,000 in retire-ment savings at age 30)

l Age 40: three times your annualsalary

l Age 50: five times your annual salary

How much you need for retire-ment really depends on your monthly expenses. So if you’re earning very lit-tle, but also lead a frugal lifestyle, you might be way ahead than someone who earns a lot, but spends lavishly.

9 hoW should I manage my debt?

Starting salaries have not kept up with the cost of living over the last 40 years. From a layman’s perspective at least, RM1,000 could buy a lot more 40 years ago than RM2,000 can today.

But how do you manage debt on a small salary? It’s difficult, I know. But the first thing I would look at is your car loan.

Do you absolutely need a car? Or would a combination of Grab and public transport be cheaper (not to mention more environment-friendly)? Or could you consider downgrading to a less-expensive second-hand car?

If you want an ambitious guideline to help you aim: your car should be worth less than 25% of your gross

annual salary (no, you didn’t read that wrongly: for a yearly salary of RM40,000, your car should be worth around RM10,000).

The other thing you can look at is creating multiple streams of income. In today’s economic environment, I’m convinced that we all need to be entrepreneurs.

10 do I have theproper amount

In my emergency fund?You should have three to six

months of monthly expenses in your emergency fund. If you’re the con-servative type, maybe even more. If you have way more than that in your emergency fund, consider moving it into your investment fund, to look for higher returns.

11 hoW to getsomeone Who

oWes you money to pay back?

I’m still trying to figure that one out. Probably one of the hardest things in the world to do, without burning relationships. Perhaps as a future step, when you say you’re lending money, write it off as a charitable donation or don’t do it at all.

12 Is bItcoIn safeand legal In

malaysIa?Bank Negara has commented on

Bitcoin before, saying Bitcoin is not legal tender and that the central bank doesn’t regulate it. This doesn’t mean Bitcoin is illegal, just that it’s not viewed as a proper currency like the US dollar and ringgit.

But looking at how several other governments around the world are already in the process of legalising it (or have already done so like Japan and South Korea), I’m predicting that it won’t be banned in Malaysia.

Besides, making Bitcoin illegal is like trying to make the Internet illegal. It’s practically impossible.

By AARON TANGaaron.tang@leaderonomics.com

THERE are no stupid questions, but there are lazy questions. I can understand why people don’t want to study dry books on personal finance, as it’s all

very scary and intimidating. Not to mention you don’t want to look

stupid in front of your friends when ask-ing, “What is the difference between EPF and PRS?”

Aside from my work at Leaderonomics as resident Campus head, I also write an internationally-syndicated blog which often covers money, as I have a huge interest in the topic.

Here are 12 questions you might have about money, but were too embarrassed to ask. And here’s what I honestly think.

1 hoW can I ask for a raIse WIthout

seemIng lIke ‘that’ kInd of employee?

Most people ask for a raise based on humanitarian reasons: “The cost of living is going up” and “I have a young family.” Both are true, and both are not effective.

Instead, ask for a raise based on the added value you can bring to the com-pany: “By doing xx, I’m confident I can help increase our company revenues by yy. Can we also look at a zz raise in my salary?”

Nothing wrong with being that kind of employee.

2 hoW do I get paId for What I’m Worth?

Prove beyond a doubt what you’re worth in terms of real dollars and cents. To prove it: be brave and willing enough to walk away from your comfort zone to try new things – be it a new role, depart-ment or company.

3 hoW should I start InvestIng? Where

do I even start?l Have at least three to six months of

expenses in your savings first.l Pay off your credit card debt.l Read about the following topics online

(sorted from lowest to highest risk): fixed deposits, bonds, Amanah Saham,Tabung Haji, mutual funds (unittrusts), ETFs, REITs and Stocks.

l Take an amount (below 10%) of your monthly salary, and run an experi-ment by buying into one of the above – one that you feel comfortable enough with. Comfortable enough

here means not so risky that you can’t sleep at night; rather, attractive enough returns that it motivates you.

l Monitor your investment, then startlearning more about other investmentvehicles. Consider investing in them with next month’s salary. Or add to your current investment.

Remember, baby steps and small wins are the keys to motivation.

4 yay or nay to credIt cards?

If you’re like most people who don’t have much discipline, Nay. Or limit it to just one, with a low credit limit.

If you’ve got bulletproof discipline? Absolutely Yay for all the privileges, dis-counts and free cash.

5 hoW do I Improve my credIt card debt?

With credit cards, you have to abso-lutely pay the bill every month in full. That’s the No. 1 rule. If you can’t stick to this rule, you’re better off not having them.

If you’re already deep in credit card debt though, look to restructure your debt via a lower-interest scheme. Credit card debt is charged at the astoundingly-high 18% interest per year.

But if you ask nicely, your bank may be

able to restructure it as a lower-interest loan. If you have multiple debts, you can also request to consolidate them as one, so it’s easier to keep track.

Should things get really bad, you can also reach out to the government agency AKPK for counselling and help.

6 prs, fIxed deposIts, Insurance; WhIch one

am I supposed to use?Three very different instruments with

three very different objectives. Private Retirement Schemes are designed as an alternative to the Employees Provident Fund (EPF), providing you another option to save for retirement.

Like this article?Follow us@Leaderonomics on Facebook, Twitter, LinkedIn and Instagram.

www.leaderonomics.com | Saturday 9 September 20174 www.leaderonomics.com | Saturday 9 September 2017 5

n Aaron isthe head of the

campus division at Leaderonomics. He is also the founder

of mr-stingy.com where he offers

financial advice for Malaysians, young

and old, and shares some fascinating life

experiences.

“THE CONSTRAINT ON PERFORMANCE IS NOT COMPETENCY, IT IS CULTURE

www.leaderonomics.org

Find out more at http://masterclass.leaderonomics.org/

Joseph TanCEO & Founder of Leaderonomics Good Monday

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“To help make you more disciplined, remember that environment trumps motivation when it comes to sticking to goals. So put yourself in an environment where you’re not constantly tempted to spend more money.”

WhaT You’re afraid To aSk abouT MoneYiT’S ok, We all have The SaMe WorrieS