Saturday, July 31, 2021


It's been 16+ long months since the MCO lockdown on 18 March 2020. The 'New Normal' is no longer the buzz word. It's the 'New Poor' these days. More folks from the M40 (middle income group) are joining the ranks of the B40 (lower income group). With massive lay-offs, retrenchments and businesses shutting down, many Malaysians are facing an uncertain future, except maybe for civil servants who continue to enjoy job security. 

The pandemic has affected everyone, directly or indirectly. Its ripple effects reach near and far. For many retirees who are dependent on their adult children to support them, their children's financial situation affects them too. The reverse is also true. Parents may have to step in and dip into their savings to help their children if the latter have lost their jobs or are going through difficult times. When money is scarce and savings are depleting fast, it's time to tighten our belts several notches. 

Here are my 10 suggestions, in no particular order:

1. Give luxuries and branded items a miss at least for now
What can we give up without feeling too much pain? Definitely luxuries and branded items. These are wants, not needs, not neccessities. Do we really need that RM1000 bag? Won't a RM150 bag do just fine? This isn't the time to get that RM5,000 diamond-studded watch. Our current watch still does a decent job of telling time. Wait till our bank balance improves. 

2. Are all those expensive health supplements really necessary?
Let's take a good look at our health supplements. Do we really need that many? Seniors spend hundreds of ringgit a month on multi-vitamins, probiotics and tonics. We should consider alternatives for maintaining good health, like exercise, proper eating habits, adequate sleep and a positive mental attitude, all of which are free. Keep supplements to a minimum, and only those that work for us.

3. Downsize, downsize, downsize
Not an easy decision to make, but it may be necessary. With the children all grown and living on their own, our home has become an empty nest. It's time to seriously consider selling the family-size house and moving to a smaller one. Less time and energy spent on maintaining the place. Consider renting a smaller place if we want to keep the house. Look for a tenant to rent it. As for the family car, the sooner we sell off the fuel-guzzling monster for a compact, fuel-saving and reliable Perodua, for example, the better off we will be in terms of savings.

4. No shame in hand-me downs
This applies more to electronic devices like computers, smart phones, and TVs. Our adult children upgrade their mobile phones whenever there is a new model on the market. Let them know we'll be happy to be the new owner of their discards. We know of retirees whose homes are equipped with second-hand items like TVs, karaoke systems, refrigerators and washing machines all handed down from their children, and all still in good working condition.

5. Consider cheaper options
Eat at home, or at food courts when out in the city. With the Covid-19 SOP still in place, we can order meals online. They don't come cheap, so consider it a weekly treat. Take public transport and leave the car for places not served by trains or buses, or for when we need to get somewhere in a hurry. You will be surprised how much we can save on fuel. Planning a vacation when travel restrictions are lifted? Book with budget airlines, and stay at no-frills budget hotels or go for home-stay. The difference between a 3-star hotel and a 4-star one is just one star, but it could mean saving a few thousand ringgit for an extended stay. Frankly, as long as the room is clean, there is hot water and the toilet flushes, we should be satisfied. After all, we are only in the room to bathe and sleep. Most of the time we'll be out sight-seeing. 

6. Ask for senior discounts
Nothing to be ashamed of in asking about senior discounts. Many restaurants and retail outlets do offer special rates for seniors aged 60 and above. Apply for a warga emas RapidKL card to get 50% off on train and bus services. Better still, make use of the free Go-KL buses and city shuttle bus services. If you shop regularly at certain establishments, get a member's privilege card to enjoy discounts or special rates.

7. Less is more
So true when it comes to food, clothes, credit cards, indeed, almost everything. Over-eating can lead to obesity and ill health, over-buying can lead to clutter and hoarding, and over-possession of credit cards can lead to debt and financial ruin. Two credit cards should suffice to cover our purchases. The same goes for holiday trips. Set a ceiling that is within our means. A local weekend staycation with the family is just as enjoyable. It's the company that counts. By the way, ladies, less is also more when it comes to wearing make-up, perfume or jewellery. One plus point about this stay-home-stay-safe period is that we can look our simple natural self. No need to shop for new clothes, do our hair or go for a manicure as there are hardly any social functions to attend with social distancing still being enforced! To look good and feel good, all we need is a smile and a positive attitude. And they cost nothing!

8. Look out for sales and bargains
Patience is a money-saver when it comes to shopping. Spend some time comparing prices online. Unless it's an item we need urgently, wait for festive or annual sales. These are getting more frequent as many stores are having a tough time disposing of their stock. They are offering massive discounts on books, clothes, electronics, furniture - practically anything and everything including online courses. Shop at discount stores like Mr DIY or convenience stores like 99-Speedmart where prices are kept low and affordable. 

9. Don't try and keep up with the Datuks and Tan Sris
If we don't have a healthy bank balance, we should refrain from living an ostentatious lifestyle just to keep up appearances, like letting our friends and neighbours think everything is hunky dory when in reality, we are falling behind in servicing our loans, and in paying off our debts. We don't have to celebrate our birthday in grand style if we can't afford it. If our adult children want to throw a big party for us, insist that they save their money till times are better. And we don't need to have a lavish wedding for our daughter or son if it puts us in the red.

10. Let our savings grow in EPF
The safest way to grow our savings, in my opinion, is to leave it in EPF to accummulate compound interest. Many newly retired seniors withdraw their entire savings to start their own business, invest or splurge on whatever they fancy only to see all that money go 'POOF' - all gone. According to EPF, 70% of members who withdraw their funds at age 55 use up their savings less than a decade after retiring. Often this is due to poor money management and a lack of investment literacy. Also, avoid 'Buy now, Pay later' schemes. That is one sure way of getting into debt if we can't resist the temptation to buy, buy and buy. 

Some advice

Beware of Scams and Get-Rich Schemes
There are numerous cases of seniors falling prey to scams and various get-rich schemes. They end up losing a huge chunk of their retirement savings. Yet there are people who don't seem to learn. We want to stretch our savings, not shrink them. If we want to invest, get advice from trusted financial planners or established investment companies. And do some research /due diligence ourselves. If we are thinking of shares and other investments e.g. cryptocurrency, as a quick way to make money. Please think twice, indeed, think many times. If we don't have a clue about the stock market, bonds, forex, etc STAY AWAY. Don't confuse herd mentality with herd immunity. Just because there is a rush to buy gold as a solid investment, it doesn't mean we should withdraw from our retirement savings to do so. 

Keep track of our daily expenses. 
Make sure it's within our budget. We won't go wrong if we adopt a practical and sensible approach towards managing our finances. Spend only when necessary, and do the math before we part with our money. Go for value. Ask ourselves if we can afford it, if we really need it, and if there's a cheaper option that's almost as good as the one we have in mind.

Better to be called a cheapskate than to be declared a bankrupt. Better to sleep soundly with peace of mind, than to be hounded by creditors and re-possessors, or worse by Ah Longs. Remember, any debts we incur will fall on our children eventually. Surely we don't want to leave them with this burden of an inheritance. The best and safest way to ensure our savings will see us through our retirement years is to LIVE A SIMPLE LIFE.

Warren Buffet, one of the wealthiest men in the world, has the last word on why we must learn to spend wisely:

1 comment:

Pak Idrus said...

Dumped capitalism and consumerism and practice Minimalism and be a minimalist.