Anyone here has ever taken drastic steps to reduce expenses? I'm thinking of switching from car to cheap second hand kapcai to go to work. I'll still keep the car for long distance driving (e.g. balik kampung, vacation). I've done the research, and this seems like the only way to reduce my cost to go to work. There's no public transport near my place.

Cost-wise, it will reduce my fuel expense by a lot (though I will lose money in the short run to buy the bike and pay for motorbike license), if I can find a bike with 2-3 l/100 km fuel consumption. My car has an average fuel consumption of 9.5 l/100 km. I'm expecting a 50% or more reduction in petrol, and not to mention I don't need to pay for toll anymore.

I'm planning to dump the money I save by doing this into my emergency fund or/and unit trust.

Anything I'm missing, other than it's a bit more dangerous than driving, and I will be more susceptible to weather conditions (especially rain)?

This post has been edited by imnotabot: Jan 14 2017, 01:45 PM

Why not both? I got that part covered already.

What is PA insurance?
And yes, I'm looking forward to be able to weave through traffic! Currently, it takes me 1 hour+ to go to work. Stupid LDP jam.

Looks like I already got myself one then.

Good points. I will still use the car for other travels. I'm just using the bike to travel to work. Planning to just ride slowly to work and stay on the left lane. I'll give it a try for a month to see if it's suitable for me.

1. Try your best to reduce your expenses so that you can save more than RM400. If you really want to buy a house as soon as possible, then you have to make some sacrifices. Maybe cancel your gym membership and just workout with your body (https://www.reddit.com/r/bodyweightfitness/), or reduce your entertainment expenses.

2. Most important is to have an emergency fund (EF). At least 1 month of your salary. If you save that RM400 extra every month, you can get it in 6–7 months. Only use this money for emergency purposes.

3. Once you have at least 1 month of EF, you can either reduce your contribution to your EF (maybe just RM100 – RM200 monthly) or stop completely, depending on your risk appetite. Then you can start to invest into things like ASB (if you're bumiputera), Tabung Haji (if you're Muslim), unit trust, or FD (fixed deposit).

4. Keep on budgeting and controlling your expenses, work harder to increase your income, and you'll reach your target in a few years. It's also important to not get into any debt, especially credit card debt. Since you didn't mention anything about debt (other than your car loan), then you're doing a pretty good job so far.

Good luck!

This post has been edited by imnotabot: May 5 2017, 12:23 PM

+Jun 15 2017, 01:22 PM-->Are you single or married? In my opinion, your savings rate is quite low.
Maybe you can at least reduce your food expenses to increase your savings rate.
Do you currently have any savings? Like emergency savings? If something happens to your house rental income (e.g. your tenant suddenly stops paying or run away), you need some savings to temporarily cover for the lack of rental income.

If you are actually saving RM1374 every month, then it's actually quite good, as it's quite a lot compared to your income.
You may want to consider getting a life insurance if your wife is dependant on you.

This post has been edited by imnotabot: Jun 16 2017, 06:13 AM

+Jun 17 2017, 09:55 AM-->I understand that. I'm going through the same issue because my parents-in-law retired without proper financial planning, so we have to subsidise some of their expenses (e.g. we help pay their Unifi bill). The good thing is that they now acknowledge that they are financially screwed, and they are now making an effort to get a side income to ease their own burden, instead of relying 100% on their children.

+Jun 17 2017, 09:55 AM-->Good to hear you have some savings. If anything unexpected were to happen, you can withdraw that 7k from FD to cover it.

+Jun 17 2017, 09:55 AM-->It's good to increase your income, but you have to be careful of lifestyle inflation, especially if you're not very good with budgeting. Because higher income sometimes tends to result in higher spending. If you need more savings, it's usually easier to cut down on your expense than to increase your income. One way to do it is to save your money when you first get your salary, so that you are forced to spend less, especially on food.