8 Money Moves You Can Make This Chinese New Year

Chinese New Year might look a little different this year, but don’t let that get you down. A quieter New Year even has some perks: You’ll spend less on festivities, while downtime gives you a chance to think about your finances.

So why not take advantage of this unique situation? Here are eight things you can do in 2021 for a truly successful Year of the Ox.

1. Review your finances

Start by reviewing your finances from the past year. This helps you determine where you stand financially. Looking back on your financial accomplishments (or mistakes) can also help you make better financial decisions.

You will want to consider these areas:

  • How much money did you spend last year? What did you spend on? Are there unnecessary expenses that you can cut back?
  • Emergency fund. Did you withdraw from these savings to cover unforeseen expenses? Do you need to top up your savings urgently?
  • Net value. What is the value of all your assets (eg savings, investments, your home) minus all of your liabilities (eg debt, mortgage, etc.)?
  • Financial goals. Are you still on track to reach your financial goals?
  • Is your investment strategy still aligned with your goals? Do you need to increase the amount of your investment or adjust your investment portfolio according to your tolerance for risk?

2. New year, new you

The new year is the occasion for a new beginning. How about starting the new year with a budget overhaul? Budgeting may sound limiting, but it’s far from the truth. A good budgeting system helps you sort out your financial priorities, so that you always have enough to spend on what you need and need. Here’s how to get started:

  • Establish a budget. One popular budgeting method is the 50/30/20 rule, where you spend 50% of your monthly income on “ needs ” (like your mortgage and bills), 30% on “ wants ” (like entertainment or shopping) and 20% off savings.
  • Set aside savings. If you are just starting out, it can be difficult to set aside a large chunk of your income immediately. The trick is to start small – maybe just 5% of your income – and build it from there. Set up automatic transfers to your savings account every month after receiving your paycheck. This will help you avoid the temptation to overspend.
  • Track your spending. Use a mobile app or use a physical laptop. This helps you see what you are spending and if you are overspending in certain categories.

3. Set financial goals

What do you want to achieve with your money in the future? Setting financial goals can help you get there. After all, it’s harder to spend RM100 on something you don’t need if you know it means delaying a dream vacation you’ve saved up for.

To start setting goals, write down your short, medium, and long term goals. Make sure they are specific and measurable. For example, “saving 10% of my income each month in 2021” is more useful than “being better with money”.

Then think about how you will achieve this goal. For example, to meet your goal of saving for a new car, you can automatically transfer RM500 each month to a down payment savings account. Remember to reward yourself after taking certain steps – it helps keep you motivated to keep going.

4. Build your emergency fund

This year, there will be less Chinese New Year shopping, fewer parties, and almost no physical gatherings. While it’s not as festive as in previous years, there is a plus: you could save a lot of money. A full Chinese New Year celebration could cost you thousands of ringgit if you spend your money on meeting dinners, home decorations, and gift baskets.

If you’re saving more through fewer festivities, now is a great time to increase your emergency fund. This year, especially when there are still economic uncertainties, having a little extra savings can help cover unforeseen events, like a sudden job loss. Aim for at least six months of living expenses (or more if you’re self-employed).

5. Pay off high interest debt

If you’re getting ang pows ​​this year (physical or digital), consider using it to write off high interest debts, such as credit card bills or personal loans. It’s not as exciting as splurging on a new gadget or pair of shoes, but you’ll still have to pay off those debts later. Also, paying them early can help you save on interest payments later.

For example, let’s say you have 5,000 RM in credit card debt. You only make the minimum monthly payment of RM250. If you received RM 1,000 in Ang pows ​​this year, paying off that debt can help you pay your bills months earlier and save RM 380 in interest:

Original debtAfter repayment of RM 1000 debt
Credit card debt5,000 RM4,000 RM
Annual interest rate18%18%
Every month you payRM250RM250
It’s time to pay off the debts2 years1 year and 7 months
Interest incurredRM989RM609

Source: AKPK Credit Card Calculator

6. Start a sideways shake

In times of uncertainty, it always helps to have an additional source of income. If you have time to spare, consider starting a side business. Think about your interests or skills and what people would like to pay for. For example, you can offer tutoring online or sell homemade sourdough bread.

Your extra income could come in handy during rainy days. And who knows? A secondary bustle could become your main source of income or give you new skills or experiences to advance your career.

7. Make the right investments

While your Employee Provident Fund (EPF) savings can supplement your retirement portfolio, you may not want to rely on it entirely. Almost three-quarters of EPF members have less than RM250,000 in their accounts at age 54. This could mean depending on a monthly payment of less than RM 1,050, below the household poverty line of RM 2,208.

To boost your retirement funds, you might consider investing through a Private pension plan (PRS). This allows you to invest in unit trust funds approved by PRS for potential returns. You will also benefit from the PRS tax break (available until tax year 2025), which gives you tax savings when you contribute up to RM 3,000 to PRS funds.

In addition, the EPF launched the EPF i-Invest platform to help members invest their EPF savings online in approved unit trust funds. Although returns with EPF i-Invest are not guaranteed, investing in funds that potentially offer higher returns than EPF may increase your chances of achieving your investment goals.

But which unit trust fund should you choose? Principal Asset Management Berhad is an award winning fund manager with 30 EPF approved funds you can invest in. Here is the performance of some of the funds presented by Principal:

FundsRiskRegionFund objective7-year annualized return *
Principal Greater China Equity FundAggressiveChina, Hong Kong and TaiwanStrategically invests in the Greater China region, where you will have the chance to participate in China’s economic growth.16.59%
Principal Asia Titans FundAggressiveAsia excluding JapanSeeks capital growth by investing primarily in equities and equity-related instruments in Asia ex-Japan.12.52%
Principal Asia-Pacific Dynamic Income FundAggressiveAsia-Pacific excluding JapanProvide regular income by investing mainly in the Asia-Pacific region excluding Japan and at the same time achieve medium to long term capital appreciation.11.83%
Principal Dynamic Islamic Asia-Pacific Equity FundAggressiveAsia-Pacific excluding JapanAchieve long-term capital appreciation and income while meeting Sharia investment criteria, through investments in emerging and developed markets in the Asia-Pacific region excluding Japan10.90%
Principal Islamic Life Balanced FundModerate
MalaysiaIncrease the value of long-term unitholders’ investments in a diversified mix of Malaysian assets in approved Sharia instruments while providing consistent income5.38%

* From December 31, 2013 to December 31, 2020; source: Lipper, December 31, 2020.

8. Maximize your chances of winning rewards

Want to be rewarded for this Chinese New Year?

When you invest a net minimum of 1000 RM with Principal through EPF i-Invest, get rewarded in the form of a Touch ‘n Go eWallet reload pin – up to 0.88% of the net amount of your investment!

With Principal EPF i-Invest, this means diversifying your EPF savings, without spending additional cash or incurring subscription costs. Plus, you can invest online in minutes – without physical paperwork.

“Huat” are you waiting?

Don’t wait until later to get your finances in order. Take the time to think about your finances, plan for the rest of the year, and boost your investment portfolio with Principal. What better way to start a prosperous New Year?


You are advised to read and understand the prospectus / prospectus / dated information document and its product sheet (if applicable) which can be obtained at our offices, distributors or on our website at following address: [www.principal.com.my]. You are advised to read and understand the content of the relevant documents. Investing involves risks and costs. You should understand the risks involved, compare and take into account the fees, charges and costs involved, make your own risk assessment and seek professional advice, if necessary. This announcement had not been considered by the SC.When past performance is rated, the past performance of a fund should not be taken as an indication of its future performance.The documents have been registered and / or filed with the Securities Commission Malaysia. Recording of these documents does not imply or indicate that the SC has recommended or approved this product or service.

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Jothi Venkat

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