frugal living is not a theory.. frugality is not about being cheap, this is the greatest misconception tied to this word.

there is a great insight to the "income vs expense" debacle. if you want a real and ongoing example, look no further than companies/corporations.. they put great priorities and emphasis at their expenses/cost..

they operate on a different set of rules whereby a viable business-case hinges greatly on the survivability of the undertaken business endevours. profit is forecasted but cost is nail-tight determined up front, as minute/detailed as possible.. it's almost an explicit factor.

as an individual, i learn from them..  and if you read widely, there're saying that advices on guarding your 'cost/expenses' as opposed to seeking 'income'..

most financial screwed-ups are because of cost/expenses.. not merely the lack of income/profit.

@lin00b,

The problem is us is...we're too busy keeping up with other people. How do you set a standard? Let say with RM3000 salary, what car should you be driving? If you're driving an old clunky Kancil and a colleague who earns RM2000 suddenly appear in your office in his swanky Proton Persona, would you try to top him off? Getting more income to solve problems doesnt really work in our culture. Maybe not as bad as the Americans, but most of us are on our way there already.

The bigger your income, the bigger your expenses. Most of us plan our budget on paying other people first, a great concept if you're planning to live paycheck-to-paycheck without any retirement fund.

I personally treat my emergency fund savings (10%), investments(10%) and loans as a non-negotiable necessities

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Added on June 16, 2008, 7:21 pmTalking about financial management, can someone please enlighten me how does a family (parents + 3 kids) spend RM1000 on utility bills (33.33% of salary)?

I have no idea how this fella chalking up a utility bills of RM1000 before hand & still able to go for holiday. Now with the price increment, suddenly he find himself can't cope with things. Ridiculous.

Maybe he on his house light, TV, fans, etc 24 hours a day. Even my home got 5 ppl living together & most of the time will got ppl staying up till late night...the utility bill is far from RM1000, not even close. Some more my mom like to do gardening & water the plant twice a day...

This is the classic example of those who spend first and think later. This is wat we call...PAY OTHERS 1st, AND PAY OURSELVES LATER scenario. Look wat happened to them....poor thing

hey. txs 4 d useful advise..

im the type always think ahead. like to listen to opinion to get knowledge.

my fren, she wif her hsuband total income rm5k, 3 kids, 1 skool and 2 not yet. have maid at home (she said nsery cost more). live in Nilai.
still she complain every month headache coz not enough money.

she scares me..

anyone can advise gd financial management for family????

1) some guru say, u make  >30% of car price, and 15% of ur monthly salary for car payment.
    whts d % for petrol+tol+parking la, Maintenance la, insurans rod tax for year end ??????? 
    i pity my fren slary 1600 but her naza sutera eat 1k of her salary. luckily she stay wif her working parents..

2) guru says, must put 25% of salary for house payment monthly.
    how much % for hse dwnpymn + lawyer fee???? 

no..
i said her car eat tht 1k  for lump sum of 400 monthly payment + 300 petrol + 100 insurance roadtax for year end + 200 stand by for maintenance.

Thats her budget. but me, who not hv car yet, i want to knw if there is any othr tips car owner.
whts d reasonable percentage of monthly salary to spend for car, other than 15% is for the car monthly payment thus must pay 30% car price for down payment. The percentage must include petrol, insurance road tax for year end and maintenance stand by.

same goes to own a house. i want to knw the tips, wht is the house price that is appropriate for those who earn below 2k. how much must allocate for the downpayment and legal fee? how much for the monthly loan payment??(some say 25% of salary). How many years of loan to take (preferablly b4 pencen ofcourse).

@jeff_ckf,
As long as you dont look at it as an 'investment', it's fine I guess. A lot of people buy the biggest house they can cause they say the price will appreciate etc. Well profit can only be made when you sell the house. If something happens, say, interest rate goes up like crazy and u cant afford to pay mortgage and you lose the house............ dont cry for me Argentina

@jeff_ckf,
Ur absolutely right.. a home is a home   Am sure most people would haf considered the loan factors before jumping into the purchase.

So, for how many years are U going to be paying 'rent' to the bank ?

@jeff_ckf,
Er... how long U intend to let the loan go on for is a more viable question; and what's ur monthly repayment?

Dad Bank Inc huh?!  Can U check for me if he's got $ to loan me?

If you have a flexi home loan, you can actually invite your family members to park the money under this flexi current  account ( supposing they park  their money into FD ).

You can pay rate on top of FD rate but below what the bank is charging you ( let say 6 % ).

Things can be worked out ( win-win ) , it is a matter of trust counts. Otherwise, both of you have to trust only the banks.

@SKY 1809,
And what if U haf enough $ to pay off the house without taking a home loan?  Should we still bother about taking a flexi home loan?

It is your own choice.

At 4.75% , meaning you still give out interest at this rate to your parents , right, while the bank could give out 3.75%

If you have all the cash to pay up the loan, why you take up a loan that is not flexible, if you still believe you need a loan  ?

What you do and think is right . I agree because  family value is equally important.

what I discuss, is just  basing on personal financial management point of view. Another option in the future.

I prefer forumers to make their own decisions.

@jeff_ckf,
I doubt BLR will shoot above 10% - U should haf gone for a fixed loan but well it's the risk U haf to take.

And Y would U terasa at what I said unless U haf the cash to pay off the loan?

I'm onli asking because I know Cash is King and am trying to liquidate some stocks to pay up for this house purchase of mine with as little loan as possible.

For those buying properties under construction have to watch out because not every developer could withstand an economic crisis resulting from high inflation.

It is better to get a trusted developer with good track record. The ones can really deliver the houses.

@jeff_ckf,
So r U moving in?!  I oredi liquidated some LT investments of which I been holding for about 2 years now.  I think it's probably a good price to let go so I did; I do haf the option to put it back in but I'll wait for the market to get softer before I make a re-investment.

The rest of the $ would go into funding the property I purchased.

Sounds that a vacation home ( in my dream list ).

Anyway. congratulation to you.

@jeff_ckf,
And what happens to the existing house the folks are living in?

@jeff_ckf,
AhHh.. No wonder Dad Bank had the $ to loan out !   Well, U could charge them rental to help offset that monthly repayment [and then use whatever $ to give them back as their monthly allowance]

ya... how to cover our fixed expenses...
at this moment my salary just enough cover my expenses
no gain no loss
it's totally cant hv any extra money n saving money at all.
please help me!!!

hi...just a question.....considering the recent hike in fuel price which affect the price of other stuff...wat do u guys think a college student shud have for allowance per month?rm1400??erm comparing by those driving car and those not.....

wow.....500 seems not enuf nowadays lo....i think 800 shud b enuf for entertainment n food n transportation only....