Is EPF savings not enough or people spending it too fast? – kopiandproperty.com

Personal Finance 101: Is EPF savings not enough or people spend it too fast?

Money Not Enough or Money Spent Unwisely

Let’s take coffee as an example. If we just need coffee and we drink two cups per day in the local mamak restaurant, then it’s probably RM5 per day or RM150 per month. However, if we also need some style to go with it and we want it to be a US-branded brand, than it would become RM25 per day (two Americanos) or RM750 per month. It’s also possible to go to my favourite brand, ZUS coffee and pay RM6.90 per Americano or RM14 per day for two or RM420 per month.

The above example is to show to you that it’s all about the choices we make and not just how much money we earn per month. We could spend RM150 per month or we could spend up to RM750 per month just for that cup of coffee. Magnify this into just 10 years and it’s either RM18,000 to two cups of coffee in the mamak or RM90,000 for that American brand!

Now that you also understand why financial sense is important, let’s look into actual situation today.

Article in nst.com.my The Employees Provident Funds (EPF) data shows that one in four members exhaust their EPF savings within five years after reaching withdrawal age, Prime Minister Datuk Seri Anwar Ibrahim said.

Additionally, he said the old-age population is more susceptible to poverty compared to the average Malaysian population with only 29 per cent of Malaysians having a pension or pension-like income during retirement.

A survey also found that over 26 per cent of respondents aged 60 and above will continue to work until their health fails. Do read the article and also watch a video here: Article in nst.com.my

Financial Management is always key

I admit that if I wanted to, I could afford to have two cups of coffee from that American brand every month. I do have two cups of coffee per day. However, I do not think it is wise of me to spend so much every month just on coffee because if I could save just half of that RM9,000 per year, I could go for many short vacations! Okay, maybe buy my wife a not-highest-end branded handbag too.

Even better is to save that amount and invest them instead. Then, when we look back 10 years later, it’s a WOW versus Oh Dear…

Why did they say Financial Management? It’s MANAGING our own self yeah. Happy understanding and all the best. Go and enjoy your coffee now.

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