Being financially prepared for unexpected events in life is something many of us put off until it is too late.
As we have seen over the past year, filled with uncertainty caused by the pandemic, being in control of our finances allows us to be better prepared. If something unfortunate happens and we are not financially prepared, the financial impact on our loved ones can be a huge burden.
Let’s start by managing our finances better and making our extra money work harder.
So how do you make your money work harder and smarter? Start by taking a closer look at your finances and find ways to get the most out of every ringgit you earn and save.
Here are 3 simple steps you can take to improve your financial stability for long-term security.
1. Take control of your money
Understand where your money is going each month so you can get the most out of it while budgeting.
Here are some simple tips for creating a budget:
- Track your spending to see where your money is going each month.
- Use the popular 50/30/20 budgeting system where you spend 50% of your income on “necessities”, 30% on “wants” and set aside 20% for savings.
- If you are overspending in certain areas, decide what expenses you can reduce.
- Regularly track your monthly budget to see how you’re doing financially as well as your spending habits.
Budgeting helps you determine how much you need to cover your daily expenses and, in the long run, to pay off debt while saving for other personal and financial goals. Being charged interest on your unpaid debts can take a large chunk of your income each month and reduce the amount you can save.
Ways to repay your debts:
- If you have more than one debt, pay off the one with the highest interest rate first. High interest debt can eat away a large chunk of your monthly income as the unpaid interest adds up and increases the amount you owe each month.
- Watch your credit card debt, which is high-interest, current debt that can grow quickly, especially if you only pay the minimum amount each month.
- Consolidate your debts or focus on smaller debts first, so that you have more funds to pay off larger debts.
Once you have a plan, be ready to commit to it, as it can take months or even years before you start to see results.
2. Start saving and investing
When you start saving, it’s important to put money aside for emergencies because you never know when you might need to pay for unforeseen events like a car breakdown, health emergencies, or sudden repairs. at home.
What is an emergency fund?
- A savings pool that you set aside to pay for unforeseen expenses, so you don’t have to borrow money.
- It’s money that you can get quickly and withdraw from your account without penalty.
- The amount should be three to six months of your living expenses.
- If you have a lot of financial responsibilities, you need to put more money aside for this fund.
However, the money you leave in your savings account over the years can also lose value over time due to inflation. Once you’ve saved enough for an emergency fund, consider investing your money. Investments can potentially provide greater returns over time and help protect the value of your money as well.
How to make your savings grow with investments?
- Start investing as early as possible to take advantage of compound interest to grow your savings over the years.
- Investing regularly even with a small amount of several hundred ringgit can make a big difference over time.
- Create passive income by investing in low-risk investments like unit trust funds, exchange-traded funds, REITs, and certain blue-chip stocks that can provide income in the form of interest or dividend payments.
Consider Investment Linked Insurance Plans (ILPs)
An ILP like Sun Shield Link can help you “protect” your money while growing it with investment funds based on your risk appetite.
When you invest in an ILP like Sun Shield Link, you also get financial protection against the unexpected with a choice of 6 insurance endorsements to protect your individual needs or those of your loved ones.
3. Be financially and medically protected
Can your investments protect you financially and medically at the same time? With ILPs, you can make your money work harder and smarter by doing both.
According to the Life Insurance Association of Malaysia (LIAM), ILPs account for more than half of active policies with outstanding premiums in 2018. ILP is a popular choice for Malaysians who want to be financially prepared to face unforeseeable events and to life challenges and at the same time, making their money work harder for potential investment returns.
Sun Life Malaysia offers the Sun Shield Link, a flexible ILP that helps protect you and your loved ones financially. At the same time, it offers the possibility of achieving long-term financial health by increasing your savings with a range of funds linked to investments.
- a customizable protection and financing plan that gives you the freedom to increase your investment with a top-up and also the ability to withdraw when needed
- the freedom to choose your investment fund based on your risk appetite
- expiration age options for your coverage up to 60, 70, 80 and even 99
- 2 types of bonus to boost your investment
- inheritance planning to make sure your loved ones are financially protected when you are no longer there
Plus, Sun Shield Link gives you the freedom to protect what matters most to you with 6 optional protection jumpers to meet your needs at different stages of life:
|For your financial needs||For your health||For your family|
|Shield Crash Care |
Disability Income Protection Shield
|Shield Medi Care |
Shield Multi Critical Care
|Waiver of the payer’s shield|
As you go through important times in life, such as advancing your career, getting married, and having children, your financial protection needs will change. Do not wait before it’s too late. Take action now to protect your financial health and your loved ones with one insurance plan that can provide you with all the benefits.
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