Managing Your Money Series | SAVINGS AND EMERGENCY FUNDS & NATIONAL EDUCATION SAVINGS SCHEME (SSPN)

How best to save and develop an emergency fund and saving using SSPN.

SAVINGS AND EMERGENCY FUNDS

SAVINGS

Start to save early. Don’t wait for a perfect moment.

The sooner you start, the larger your savings will be.

Aim to save at least 10% of your income every month before you spend.

Raise your savings if and when you obtain more money, e.g. when you receive a bonus.

Keep your money in a fixed deposit account as a start. With more interest compared to a savings account, your funds will increase quicker.

Save before you spend and not vice versa.

Most individuals do this:

INCOME less SPENDING = Balance utilized for SAVINGS or INVESTMENT

The path to go:

INCOME less SAVINGS or INVESTMENT = Balance utilized for SPENDING

This manner, you may be sure that you have some savings from the cash received each month

Warning flags of unhealthy spending habits

You spend your savings to pay current debts.

You pay the minimal amount which is due on your credit card.

You constantly borrow to make it from one pay day to the next.

You pay just the minimal amount of your repayments which are required and do not lower your overall debt.

You find yourself disagreeing with your spouse or family members over money

EMERGENCY FUND

Consider an emergency reserve of three to six months of your regular expenditure to handle unanticipated occurrences and expenses.

We suggest to only utilize this when you are unemployed.

With the recent Covid-19 pandemic, we suggest to save up to 12 months for even much better security.

In this method, you may keep away from falling into debt when there is a sudden need for money.

However, do not utilize the money from the funds to meet your typical expenditure or to fulfil your financial objectives.

Steps in developing an emergency fund

1. Work out your overall monthly expenses, e.g. housing, food, transportation, utilities and other loan repayments.

2. Decide the amount of months of monthly expenditures you would want to have in your emergency fund.

3. Work out your entire emergency money, i.e. total amount of monthly expenditure in step 1 multiplied by the number of months in step 2.

4. Put monies into your emergency fund.

NATIONAL EDUCATION SAVINGS SCHEME (SSPN)

The National Education Savings Plan (SSPN-i) is a savings scheme or instrument expressly created by the National Higher Education Fund Corporation (PTPTN) for the aim of savings for higher education. 

The plan is Shariah compatible utilising the idea of "Wakalah Bill Istithmar " where a depositor selects PTPTN to handle their savings for investment objectives

For more details, please visit the PTPTN website at https://lovesspn.ptptn.gov.my/

Happy Investing! 😉