Personal Finance Tips for Millennials

Personal Finance
Tips
for

Millenials

By Group 6

Nizua Iddil Syafiq bin Mohd Nizuaisham
Nor Aishah binti Idrus

Noor Fairuz Husna binti Mohamad Fadzil

Table of contents

Content Pages
Acknowledgement 3
4
List of Figures 5
Introduction 9
Chapter 1: Budgets 17
Chapter 2: Expenses 22
Chapter 3: Emergency Funds 28
29
Summary 30
Glosary
References

Acknowledgement

First and foremost, We express our gratitude and thankfulness to Allah, the
Almighty, for His showers of blessings during our study effort which enabled us to
successfully complete this assignment.

We would like to convey our heartfelt thanks to our lecturer TS. Mudiana Binti
Mokhsin @ Misron , for providing us with vital guidance over the course of this
study. It was an incredibly joy and honour to be able to work and study under her
provision.

Last but not least, I would like to convey our thanks to ourself for never losing our
determination and never giving up on our objectives of completing this assignment
successfully. We are grateful to Allah for providing us with patience and strength
necessary to complete our assignment amid the long distance learning.

List of figures

Budget 50/30/20 rule
Budget calculator
Screenshot of Maybank's MAE
Emergency Funds
Screenshot of Amanah Saham Berhad
Screenshot of Tabung Haji

Introduction

Mistakes and disappointments are common to everyone. It is preferable that these errors had nothing to do with a
person's financial security and independence. Lack of knowledge, expertise, and free time, impulsive big purchases,
serious financial goals—all of these things are detrimental to efficient resource conservation and wise investment.
The key to a peaceful life is your current financial management skills. As they transition into adulthood, students
and recent graduates who are employed or have other sources of income—such as a side company or money from
their parents—must make a decision about how to spend the remaining funds, even if they are just a small portion of
the total. Young adults' efforts to become independent and prosperous may be hampered by inexperience and
immaturity. Everyone must learn the "Language of Wealth Management," including how to set aside money for
savings, use it wisely, and invest it. The evolution of financial planning is strongly related to the degree to which
manufacturing, monetary relations, the state's role, and human knowledge of the rules governing social processes, as
well as the nature and function of money, have advanced.

What is Personal Finance? 53%

1.Personal finance is normally a catch all term used by the financial Malaysians are not able to
industry to describe the methods employed by an individual or a save more than three
family unit to manage it's financial resources, including the way they
budget, save and spend monetary resources over time. months if they lost their
jobs!
2.More specifically, personal finance is essentially about meeting your
own personal financial goals. It recognises that a one-size-fits-all
approach does not work. How you manage your own finances depends
on your own income, expenses, living requirements and individual gals
and desire.

3. After conducting own research, we had discovered that the financial
literacy rate in Malaysia is abysmal. Owing to this realization, we
decided to pen this book in order to provide more information
regarding financial literacy to Malaysian.

Why is personal finance important?



1 Direction

Learning about personal finance provides direction to meet our
goals or dreams. Financial planning helps us to understand our
goals more clarity in terms of why you need to achieve these goals

and how they impact other aspects of our life and finances.

2 Financial Stability

Promote financial stability and to avoid unserviceable debt. According to the
Credit Counselling and Debt Management Agency Malaysia (ALPK), young
adults are getting bankrupt due to unmanageable debt. Financial planning
acts like a early warning system to warn us when our debt levels is about to
become unmanageable and promotes overall financial stability.

How this book can help?




This book aims to arm readers with the
While there are many areas that we can
necessary basic knowledge regarding cover under personal finance, we had
personal finance in the most digestible opted to focus specifically on the following
way possible and more importantly, offer topics:
ways to not only practice said knowledge,
but to also leverage on the various tools (1) Devising and Following a Budget
available over the internet in order to
start your financial planning journey! (2) Building an emergency fund

(3) Tracking Expenses

Chapter 1: Budget



Why do you need a budget?

A budget helps create financial stability. By
tracking expenses and following a plan, a budget
makes it easier to pay bills on time, build an
emergency fund, and save for major expenses such
as a car or home. Overall, a budget puts a person on
stronger financial footing for both the day-to-day
and the long term

Chapter 1: Budget



How do you create a budget?



Since personal finance is personal to you, there no
“wrong” way of creating a budget. But that being said,
we would like to recommend using a tried and tested
50/30/20 rule where 50% of your income after EPF
and taxes is used for needs, 30% for wants and 20%
for savings.

Chapter 1: Budget



What qualify as a “Need”?

Needs are those expenses that you must absolutely
must pay and are the things that are necessary for
survival. These include rent or mortgage payments,
car payments, groceries, insurance, health care
insurance, minimum debt payments and utilities.
These are your “must-haves”. This category should
NOT include extras, such as HBO, Netflix, Starbucks
and your mamak expenses.

Chapter 1: Budget



What qualify as a “Want”?

Wants are all the things you spend money on that
are not absolutely essential. This includes dinner and
movies out, that new handbag, tickets to sporting
events, vacations, the latest electronic gadget, and
ultra-high-speed Internet. Anything in the "wants"
bucket is optional if you boil it down.

Chapter 1: Budget



What qualify as a “Savings”?

The remaining 20% of your net income is reserved
for savings (including your retirement contributions),
investments and paying off your debts. This includes
adding money to an emergency fund. The aim is to
create more confortable financial cushion in the
future.

Mistakes Makes Practice
Practice Makes Perfect!

Understand It Better!

Aminah makes RM3,000 per month after EPF and tax
deductions. Following the 50/30/20 rule, how much Aminah
can Aminah can afford to spend, in RM, in the
need/want/savings category respectively?

Abu makes RM2,500 per month after EPF and tax
deductions. Following the 50/30/20 rule, how much, in RM,
can he afford to spend on the wants category?

Azam spend RM300 monthly on Starbuck Coffees. Is this
considered an expense under the “need” category?

Try It Yourself!

Calculate your own budget with the calculator provided in the link
https://www.forbes.com/advisor/banking/budget-calculator/
Below are the step-by-step guide on how to use the calculator:

Step 1: Input monthly income in the box
provided.
Step 2: Click Calculate.

Step 3: Budget calculated and displayed

Chapter 2: Expenses



Why do you need to track expenses?




Tracking your spending habits is the best The importance of tracking your expenses
way of finding out how you are utilizing cannot be understated as according to a
your money. It would allow you to report by Khazanah Research Institute, in
understand why you’re in debt and how you 2016, 7 out 10 Malaysian Millennials do
got into debt in the first place. This not live within their means.
information can help you design a strategy
of getting out of debt.

Chapter 2: Expenses




How do track your expenses?




Generally, you would manually track your expenses
by writing it down in a designated book.
Alternatively, you could also use note taking
software such as Microsoft Words or Microsoft
excel.
Additionally, users may find it more useful to
leverage on specialized expense tracking
applications such as Maybank’s MAE or any third-
party expense tracking app such as Spendee, which
automatically tracks expenses on the user’s behalf.

Mistakes Makes Practice
Practice Makes Perfect!

Understand It Better!

Expense tracking is an important part of your
financial planning journey. (True/False)

You could only track expenses manually. (True/False)

In 2016, most Malaysian Millennials are able to live
within their means. (True/False)

Try It Yourself!

Option 1
Open an Excel file and start listing down your expenses for
this month. Provided on the right is an expense tracking
example that you may use for your financial planning
journey!

Option 2
Download the Apps that would help you to track your
expenses on your behalf.

MAE (IOS/Android), Free Spendee (IOS/Android), Paid

Chapter 3: Emergency Fund



Why do you need to have an emergency fund?



An emergency fund is essentially money that you
have set aside to cover any unexpected expenses
that life may decide to throw at you. The fund will
allow you to live for a few month should you
happen to lose your job or pay for something
unexpected that comes up without going into debt.

Chapter 3: Emergency Fund



How much should you keep for my emergency fund?



Generally, you should aim of having six month’s
worth of expenses as your emergency fund. If you
followed the 50/30/20 rule we had proposed earlier,
you could slowly but surely build your emergency
funds by saving 20% of your income monthly.

Chapter 3: Emergency Fund



Where should I keep my emergency fund?



One of the most question we would get is where
exactly should we “park” our emergency fund. Ideally,
It should be invested in a financial product that has
either low risk or not risk at all. It must also be
completely liquid. Below are some of our suggestions:
1.Amanah Saham Bumiputera (ASB)
2.Tabung Haji (TH)
3.Interesting bearing Current Account

Mistakes Makes Practice
Practice Makes Perfect!

Understand It Better!

Roboadvisors such as “Wahed” and “Stashaway” are a
perfect place to place your emergency funds.
(True/False)

We can use our emergency fund to pay to buy the latest
iPhone. (True/False)

(1) ASB Try It Yourself!

(2) Tabung Haji

TH accounts must be opened over the counter.
As opened, you can invest via their mobile app.
For an adult account. You must also meet the
above requirements.

Step-by-Step Guide to register for
MyASB as above.
Pro tip, use the “Auto-Labur” function!

Summary

The phrase "personal finance" refers to managing your finances as well as saving and investing. It includes
financial planning for retirement, banking, insurance, mortgages, investments, and taxes as well as estate
preparation. The phrase is frequently used to describe the entire sector that offers financial services to people

and households and provides them with financial and investment advice.
Personal finance is about achieving individual financial objectives, such as having enough money to cover

immediate expenses, making retirement plans, or setting aside money for your child's college tuition.
Everything depends on your income, costs, living standards, and personal objectives and desires—and
creating a strategy to meet those demands within your means. It's crucial to develop financial literacy so you
can discern between good and bad advise and make wise decisions in order to maximise your earnings and

savings.

Glosary

Finance - process of providing funds for business Debt financing - a time-bound activity where the
activities, making purchases, or investing. borrower needs to repay the loan along with interest
Expenses - the cost of operations that a company at the end of the agreed period
incurs to generate revenue. Taxes - mandatory contributions levied on
Needs - the consumer's desire to get functional individuals or corporations by a government entity—
utility out of an offering whether local, regional, or national
Credit - an agreement between a lender and a Savings - process of setting aside a portion of
borrower. current income for future use, or the flow of
Debt - the amount of money which needs to be resources accumulated in this way over a given
repaid back period of time.

Bibliography

Kenton, W., 2022. Personal Finance. [online] Investopedia. Available at:
<https://www.investopedia.com/terms/p/personalfinance.asp#:~:text=our%20editorial%20policies-,
What%20Is%20Personal%20Finance%3F,and%20tax%20and%20estate%20planning.>
Tamplin, T., 2022. Define Budget and Budgetary Control | What Are Its Objectives?. [online]
Finance Strategists. Available at: <https://learn.financestrategists.com/explanation/management-
accounting/q-1-define-budget-and-budgetary-control-what-are-its-various-objectives/>
vohwinkle, J., 2022. Your 6-Step Guide To Making a Personal Budget. [online] The Balance.
Available at: <https://www.thebalance.com/how-to-make-a-budget-1289587>

Copyright by:
Nizua Iddil Syafiq bin Mohd Nizuaisham
Nor Aishah binti Idrus
Noor Fairuz Husna binti Mohamad Fadzil
Lecturer : TS. Mudiana Binti Mokhsin @ Misron

All rights reserved. No portion of the contents of this book may be reproduced, stored in
a retrieval system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording, etc., without the prior written permission of publisher

Universiti Teknologi MARA (UiTM)
40450 Shah Alam, Selangor

Personal Finance Tips

NIZUA IDDIL SYAFIQ BIN MOHD NIZUAISHAM 2022121599
NOR AISHAH BINTI IDRUS 2022978497
NOOR FAIRUZ HUSNA BINTI MOHAMAD FADZIL 2022168793

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