MONEY

What trigger your spending? When you are sad, depressed, angry, excited or lonely? I use to spend more money when I feel bored or carrying a lot of cash in my pocket. That's why I don't carry much cash myself to avoid temptation to spend. Having to identify the way to trigger my spending, I have been very caution to avoid and control them. I find it challenge to disciplined myself and it takes time to learns discipline money.

It is very hard for you to have the temptation not to buy when the stuff you have been thinking to buy are on sales, 50%, 60% or 70% discount. You feel disturb and your subconcious mind keep asking yourself, "buy or not buy?", "sales now, great deals!", "I can swipe first and pay later since it's on sales, I can save a lot." and many more which you are convincing yourself to buy, you are finding a good reason to buy so that you can buy comfortably and feel better in spending, I think many of us have such thought before, self talking to yourself buy or not buy. However, it's good to practices evaluating before taking action to purchase, instead of convincing youself, why not you evaluate why you need the stuff, it is necessary? do I have more than enough? do I have budget for this? If the answer is NO, then just stay away and hang in there for awhile, you may notice your temptation to buy will fade away and you may even forgotten about it after 2 to 3 days. I know the feeling is sucks, whenever the feeling slip through, shift your thought to think positively, think about another fews more digit in your bank account or stay out of debts, it will makes you feel better.

Discipline Money require self-discipline, it is a key to reduce debts and increase savings, if you practice it in long run, it will also improve your standard of living. Undiscipline person normally does not have discipline in money, if you notices yourself working day and night for money and the money just slip away easily, it is time for you to review your spending habits and time for money management lesson.

Discipline Money require a lot of self-discipline, it is easy when you come to think of fantastic rewards to reach financial stability that you hopes for. Take each step forward in controlling your spending habits with bit of imagination and just little creativity to put your hard-earned money on lock.

Nearly 50 per cent of credit card holders declared bankrupt were under 30 years of age, according to figures from Bank Negara Malaysia (BNM).

Also, a study conducted on those who had defaulted on their debt payment or had difficulty in servicing their debt found that 22 per cent of the respondents attributed their predicament to poor financial planning.

The study conducted by the Credit Counseling And Debt Management Agency (AKPK), a wholly owned subsidiary of BNM, also found that some 27 per cent of the respondents cited that they lost control on usage of their credit cards.

Another survey conducted by Citibank showed 37 per cent of the respondents were worried about their financial future and on average Malaysians had savings that could last only 11 weeks.

The survey findings also showed that only 28 per cent kept to their budgets and that only 22 per cent have a clear retirement plan.

Datuk N.Marimuthu, president of the Federation of Malaysian Consumers Association (Fomca) shared the above startling findings with Bernama as he spoke in conjunction with World Consumer Rights Day to be celebrated on March 15.

The theme for this year is "Our Money Our Rights".

FINANCIAL PLANNING

According to Marimuthu, another study carried out by CIMB found that 93 per cent of the respondents indicated that they were aware that they need financial planning.

Personal financial planning where budgeting is the key component should be at the back of everyone's mind but judging by the findings of various studies, very few Malaysians can actually adopt one.

In the 2010 Budget, the government announced an annual service tax of RM50 will be imposed for each principal credit card and RM25 for each supplementary card in an effort to encourage prudent spending.

SET TARGET

"Thus our first focus in conjunction with World Consumer Rights Day is to further enhance financial skills and to instill financial responsibility in all consumers. Our particular focus is children and youths," Marimuthu told Bernama.

The reason being, as aptly put by the Fomca president, consumers must be trained early to acquire good consumption and financial habits.

"Once they acquire bad spending habits, it becomes extremely difficult to change.

"Our ultimate aim is to enhance financial literacy skills including skills in financial planning, budgeting, retirement planning, and mindful consumption," he elaborated.

MEDIA LITERACY

Educating youths to better understand how media can influence their consumption is part of Fomca's mission to help consumers.

According to Marimuthu some youths were so taken by deceptive advertising tactics that they were pushed to the edge of incurring excessive expenditure.

Youths, he said are also easy prey for junk and unhealthy food promotions, leaving more and more youngsters to deal with issues of overweight and obesity.

"Through better media literacy, youths can be better armed to some extent to minimise impact of media on their values, personal self-esteem and their consumption behaviours," said the Fomca president.

FINANCIAL INSTITUTIONS

In line with the "Our Money Our Rights" theme, Fomca also wants banks and other financial institutions to increase their quality of service to the consumers.

In 2008, the National Consumer Complaints Centre (NCCC) received 1,354 complaints against banks and financial institutions.

This was an increase of 67 per cent from the year 2006.

Marimuthu who is also the Chairman of Board of Directors of the NCCC said complaints received include misleading advertisements, excessive interest, charges and penalties besides one-sided agreement with the consumers finding themselves at a disadvantage.

Another complaint received by the NCCC centred on aggressive debt collection tactics.

"Consumers want banks especially to be more caring and responsible in dealing with them.

"Bank Negara as the regulator of the financial services should take concrete measures to efficiently and effectively regulate the banks to better protect the interests and welfare of the consumers," said Marimuthu.

MORE FOR THE POOR

The poor and the weaker segments of the community must also have access to financial services.

The Fomca president proposed micro-credit and special credit schemes to be made available to the poor especially in helping them to get out of the clutches of poverty through small business ventures.

Skill development and entrepreneurship training should be undertaken to empower them to break away from poverty.

Additionally, there should be access to loans or small grants to enable them to start their own business, said Marimuthu.

Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management.

Personal financial planning

A key component of personal finance is financial planning, a dynamic process that requires regular monitoring and reevaluation. In general, it has five steps:

1. Assessment: One's personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists personal income and expenses.
2. Setting goals: Two examples are "retire at age 65 with a personal net worth of $1,000,000" and "buy a house in 3 years paying a monthly mortgage servicing cost that is no more than 25% of my gross income". It is not uncommon to have several goals, some short term and some long term. Setting financial goals helps direct financial planning.
3. Creating a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one's employment income, or investing in the stock market.
4. Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
5. Monitoring and reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.

Typical goals most adults have are paying off credit card and or student loan debt, retirement, college costs for children, medical expenses, and estate planning.^{[citation needed]}

The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are:

1 - Financial Position: this area is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished.

2 - Adequate Protection: the analysis of how to protect a household from unforeseen risks. These risks can be divided into liability, property, death, disability, health and long term care. Some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance. Business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits, utilizing insurance investment products may be a critical piece of the overall investment planning.

3 - Tax Planning: typically the income tax is the single largest expense in a household. Managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, which can be used to reduce the lifetime tax burden. Most modern governments use a progressive tax. Typically, as your income grows, you pay a higher marginal rate of tax. Understanding how to take advantage of the myriad tax breaks when planning your personal finances can make a significant impact upon your success.

4 - Investment and Accumulation Goals: planning how to accumulate enough money to acquire items with a high price is what most people consider to be financial planning. The major reasons to accumulate assets is for the following: a - purchasing a house b - purchasing a car c - starting a business d - paying for education expenses e - accumulating money for retirement, to generate a stream of income to cover lifestyle expenses.

Achieving these goals requires projecting what they will cost, and when you need to withdraw funds. A major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the financial planner will suggest a combination of asset earmarking and regular savings to be invested in a variety of investments. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity. This asset allocation will prescribe a percentage allocation to be invested in stocks, bonds, cash and alternative investments. The allocation should also take into consideration the personal risk profile of every investor, since risk attitudes vary from person to person.

5 - Retirement Planning: retirement planning is the process of understanding how much it costs to live at retirement, and coming up with a plan to distribute assets to meet any income shortfall.

6 - Estate Planning: involves planning for the disposition of your asset when you die. Typically, there is a tax due to the state or federal government at your death. Avoiding these taxes means that more of your assets will be distributed to your heirs. You can leave your assets to family, friends or charitable groups.