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A Guide To Budgeting For Clueless Millennials

by Scarlett Yong


Source: Money Control

As we receive our first pay check of the year, we’re probably thinking to ourselves, save or splurge to mark the new year? Of course, we have priorities and commitments to pay off but we should also learn how and when to ‘master the art’ of treating ourselves.


As millennials, a common topic over lunch or dinner would usually boil down to our finances. Believe me, I’ve been there.


“How much are your savings?”

“How much do you earn?”

“How much does your car loan cost?”

You know you can’t escape from these intrusive questions, therefore as the saying goes; if you can’t beat them, join them.


I myself am approaching the age of 27 and evidently, just like any anxious young lady, I am concerned about my financial predicament.


Therefore, because sharing is caring, here are 4 simple rules which I have used and found beneficial for my fellow millennials in budgeting for the New Year.



Rule #1: The 50-30-20 Rule


Source: Investment Guru


I stand by this rule, I believe in it and I’ve witnessed its power.

To sum it up, the 50-30-20 rule advocates you to put 50% of your income towards the essentials such as accommodation and bills, whereas 30% of your income goes to your wants such as entertainment and dining. Last but not least, the last 20% goes to your savings.


Initially, as a millennial, it would be hard to set aside even 10% of your income, considering the fact that you have your monthly rent, PTPTN loans and living expenses to pay.


However, with the right management, you’ll realize that 20% of your income is not a big amount after all.


Assuming that you have a net salary of RM2, 000, 20% of that amount would be equivalent to RM400. Hence, if you were to save up RM400 consistently for a year that would mean you would have RM4, 800 in your savings.


Yes, it isn’t a substantial amount, but it is comforting to know that you have that RM4, 800 at hand if you are ever in dire need of money.


Rule #2: The 5 Ws Rule


Source: Door 3


As taught by my father who happens to be a longtime banker, the 5 Ws rule is where you ask yourself why, what, where, when and who, when you plan to purchase something.


I personally find this method to be rather effective because we, millennials tend to buy things on impulse or simply just to compete within our social circle without any consideration for our financial situation.


However, when you really consider the 5 Ws, you’ll realize that you probably don’t need that latest pair of Yeezys, or that really expensive new bag from Chanel.


What you need, is what you really need.

Rule #3: The Preservation Rule by yours truly.

Source: Love This Pic


It’s no rocket science, my friends, when you really take care of the things you have, you won’t find the need to purchase a new one. I’m rather proud to say that I have used my laptop for 7 long years and till this day, it still functions. I have also (shamelessly) preserved my heels for 2 consecutive years and no one has noticed that it is the same pair of heels for each event, unless of course, they read this article.


You’ll be surprised at how much money you can save from using the same things for a long time. In a nutshell, buying new things to replace the old ones are simply just cost that can be

eradicated and managed.


Rule #4: The ROI Rule


Source: Corporate Finance Institute


As mentioned, I have a banker for a dad so for all my life, I have always been taught to ask myself this one simple question.


If I do this, what is my ROI?

Okay, I know that this word may seem serious to us who are unsure what ROI stands for, it simply means Return on Investment. It is known to be a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.


Let’s say you were contemplating whether or not to buy the latest iPhone, instead of looking at its seemingly affordable installment plans (which by the way, is a cliché company tactic to distract you from its hefty cost), you should be asking yourself this question instead.


What is my "ROI" from purchasing this phone?

Will I be satisfied with this purchase/investment that I am making?


From a personal experience, using this rule has helped me from purchasing really exorbitant things that I, as a millennial, (unfortunately) don't have that kind of disposable income yet.


And there you have it, the guide to budgeting for us millennials. I wish you all success in trying out any one of these 4 rules. As Jared Leto once said, try and fail, but never fail to try!


What are your personal budgeting tips? We'd like to know!


You may also find Scarlett on Instagram.

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