SEMESTER 1 DE013 2023/2024 ENGLISH KOLEJ MATRIKULASI LABUAN LECTURER’S NAME : MS SITI NORAIN BINTI DUKA ENGLISH WRITING TASK – SCRAPBOOK THEME : FINANCIAL ISSUE : FINANCIAL PLANNING TITLE : LEARNING HOW TO EXERCISE SOME DISCIPLINE IN YOUR SPENDING HABITS
GROUP MEMBERS NO. NAME MATRIC NO. CLASS 1. AWANG IMRAN BIN SULAIMAN MS2315175073 Y02 2. NOORHAZIQAH BINTI JIBIN MS2315270093 Y02 3. NUR ANIS SAFFIYAH BINTI YUSRI MS2315174357 Y02 4. NURSYAKINA BINTI SAINAL MS2315174761 Y02 “Debt is like any other trap, easy enough to get into, but hard enough to get out of.” (Henry Wheeler Shaw) “If you lose money you lose much, if you lose friends you lose more, if you lose faith you lose all.” (Eleanor Roosevelt)
Part 1 : Background Information On The Issue What is a financial planning ? A financial plan is a document that details a person’s current financial circumstances and their short-term and long-term monetary goals. It includes strategies to achieve those goals. A financial plan can help you to establish and plan for fundamental needs, such as managing life's risks also those involving health or disability, income and spending, and debt reduction. It can provide financial guidance so that you're prepared to meet your obligations and objectives. It can also help you track your progress throughout the years toward financial well-being. Financial planning involves a thorough evaluation of one’s money situation. For example, income, spending, debt, and saving and also expectations for the future. Unfortunately, today’s society likes to spend excessively until there is waste in spending due to lack of disclosure about financial planning and lack of discipline in spending habits. So the question is why people need to learn how to practice some discipline in their spending habits ?
Part 2 : Personal Responses To The Issue a. Opinions/ Reactions/ Commentary/ Comparison/ Cause and Effect Financial peer pressure is the influence of the environment or society to spend your money. In a certain way, it’s an issue that happens to most people, especially among teenagers. Someone with low self-confidence will most likely be influenced by their surroundings to spend their money on something that is not important as long as they do not get judged by other people. For instance, they buy expensive clothes just to help them not feel embarrassed whenever they meet their friends. Living in this super modern world causes people especially teenagers who love to walk aimlessly and buy whatever eye-catching item. Rather than purchasing what they need, they often buy what they desire that cause in unnecessary spending whether it is online shopping or in-store shopping. This habit may include buying bulk items that have huge discounts without considering their actual benefits or purchasing branded items that they see in advertisement just because its attract their attention. Although they may feel overjoyed at the moment, by having the things that they want but they didn’t realize that it is one of the reasons that cause burning a hole in their pocket. Consequently, they may end up broke and regretful for buying something that isn’t important to themselves and beyond their means.
One of the reason for failing to manage finances is not saving. This is because there is no culture that encourages the lack of knowledge in saving .In addition to that, lack of discipline in saving is also the cause of failing to manage money because without discipline, there is no change, there is no success in achieving financial goals. Not the saving causes an individuals to have no savings for the future or when an emergency occurs. What's more, individuals with low wages will make them have to borrow money from other people or banks. This causes them to be bound by debt. One of the most famous personal finance quotes by Warren Buffett is "Do not save what is left after spending, but spend what is left after saving". On the other hand, the cause of failure in finance is caused by financial mismanagement. Financial mismanagement is considered to be inefficient in spending which will result in the individual’s finances being affected. This is due to the fact that, your money won’t last too long because financial mismanagement often leads to overspending which can lead to debt. Hence, financial mismanagement is also caused by no planning in spending which results in wastage in spending. For example, if you don’t set any budget for your expenses it means that you don’t know how much money you have to spend and it’s very easy to overspend and also possibly require you to take out loans in order to repay such undue amounts. In short, to prevent personal financial mismanagement it is important to have financial education from an early age.
b. Recommendations/ Suggestions/ Solutions/ Prediction Living in a college, we see a lot of people with different lifestyles starting from the richest to the standard. In order to survive in those environments, we have to build our self-confidence. Self-confidence can be a valid factor, which is how people deal with financial issues (Bénabou et al., 2003). Self-confidence helps us to become honest and accept our financial value. For example, only buy what we need and not what other people want. When they're thinking about buying something, it's important to consider what they really need versus what they just want in the moment. For instance, they can do a list of what they want to buy and then separate it into things they need and things they want. Within this way, it will help them to identify which one is the most important and must be prioritized before purchasing it. By consistently practicing this habit it will provide excellent financial management and live a more financially stable life. The solution to encourage the practice of saving is to study or read book about finance and savings as a knowledge enhancer. For instance, the book about financial that people often read is the 'Guide to Investing' written by Robert T Kiyosaki. This is because saving money can allow us better standard of living, in other words we can preserve the economy. In addition, the solution we can do is to attend a program or a saving campaign to gain more exposure about saving. Thus, causing someone the individual can be interested in making savings. The quotes by Henry David Thoreau is "The price of anything is the amount of life you exchange for it".
Last but not least, one of the way to solve the problem of financial mismanagement is to manage your practice expenses by creating an expense plan. This is because by reviewing your every purchase can open your eyes to not wasteful in spending. Fortunately, getting your finances in order isn’t that difficult because there are spreadsheets and software programs designed to make the budgeting faster and easier. Other than that, always be patient because trying new things takes time to adjust as changing financial habits and achieving financial goals takes time. Which is to say, establishing good financial habits and self-control requires discipline but you can have a healthy financial future for you and your family if you can reduce your spending and save more than you spend to the point of waste. In short, being disciplined in managing your finances is well worth your efforts.
Part 3 : Conclusion In conclusion, it is undeniable that financial planning brings us many advantages and appropriate financial plan will guide you to use money wisely. This is because a financial plan can focus your attention on important immediate steps, such as reducing debt and building your savings for emergencies. However, don’t give up easily when trying new things because it takes time for you to adapt to the new things around you. Which is to say, it can enhances the probability that you'll achieve financial milestones and overall financial success. In sum, it can keep you out of financial trouble and reduce the stress and worry you may have experienced in the past. As Robert Kiyosaki once said, ‘More important than the how we achieve financial freedom, is the why. Find your reasons why you want to be free and wealthy’.
References Thomas J. Catalano. (2021, January 02). The Beauty of Budgeting. Investopedia. https://www.investopedia.com/articles/pf/06/budgeting.asp Ana Gonzales-Riberio. (2022, March 16). 50 Empowering Quotes on Finances to Help Your Money Habits. Self. https://www.self.inc/blog/quotes-on-finances Liz Manning. (2023, August 31). Financial Plans : Meaning, Purpose, and Key Components. Investopedia. https://www.investopedia.com/terms/f/financial_plan.asp Financial Mismanagement. (2023, July 01). In Wikipedia. https://en.wikipedia.org/wiki/Financial_mismanagement#Individuals Singh, R. (2022, January 11). Bad shopping habits and low salaries causing many Malaysians to go into debt. The Sun Daily. https://www.thesundaily.my/home/p1-lead-jan-11-debt-riddenEF8744314 Forty per cent of millennials spend beyond their means, says finance minister. (2021, March 9) Malay Mail https://www.malaymail.com/news/malaysia/2021/03/09/forty-per-cent-ofmillennials-spend-beyond-their-means-says-finance-ministe/1956305 The Real Consequences Of Poor Financial Management. (2022, August 31). Deserv. https://www.dezerv.in/personal-finance/the-real-consequences-of-poor-financialmanagement/#:~:text=Since%20improper%20financial%20management%20often,resolve%2 0their%20current%20financial%20troubles. Dhull, P., Beniwal, R. (2017, November). Dealing with peer pressure. Research Gate. https://www.researchgate.net/publication/332318821_Dealing_with_Peer_Pressure
Take Charge America Team. Our 5 Favourite Quotes about Saving Money. https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.take chargeamerica.org/our-5-favorite-quotes-about-saving-money/&ved=2ahUKEwinsGXyJeBAxUBVt4KHdj5C8sQFnoECAkQBQ&usg=AOvVaw3MFoZMj1T5t2mkZVVy_7U Micheal Goldenberg. (2023, April 11). 6 Strategies To Build Financial Discipline. National Debt Relief. https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting_and_style_guide/ reference_list_articles_in_periodicals.html What are Financial Mismanagement? 13 Handy Tips to. (2022, February 21). MoneyPatrol. https://www.moneypatrol.com/moneytalk/budgeting/financialmismanagement/#whataretheeffectsoffinancialmismanagement Futon Bank. (2023). 6 ways to reduce money stress. https://www.fultonbank.com/EducationCenter/Saving-and-Budgeting/6-ways-to-build-financial-discipline Arellano, A., Camara, N., Tuesta, D. (2014, October). The effect of self-confidence on financial literacy. Research Gate. https://www.researchgate.net/publication/268134841_The_effect_of_selfconfidence_on_financial_literacy “Saying no to pressure.” (n.d.). Health hub. https://www.healthhub.sg/livehealthy/210/saying_no
Deborah Eli. (21 June 2023). Book Summary: Rich Dad's Guide to Investing. LinkedIn https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.link edin.com/pulse/book-summaryrich-dads-guide-investing-written-robert-kiyosakieli&ved=2ahUKEwj4w5G0sZiBAxVQbWwGHdbxA3IQFnoECBoQAQ&usg=AOvVaw3rw XiofBaFjqDgvHICFEbe 6 good money habits for university students. (2022, March 21). Free Malaysia Today. https://www.freemalaysiatoday.com/category/leisure/money/2022/03/21/6-good-moneyhabits-for-university-students/