1 January 2022

By Farhana Uddin

Having the right financial mindset can get you off to a good financial start to 2022. If you’re thinking of rebooting your finances, here are a few short- and long-term goals to ring in the new year with.

3 Short-Term Financial Goals to Try In 2022

1. Set your financial goals
Start the year off right by evaluating your financial goals and reflect things you want to do with your money. Look through your list of spending and ask yourself if they are needs or luxuries. Trim off the wants and look for signs of bad spending habits that you need to change.

When you’re setting financial goals, make sure it’s the best choice for you. Set goals that are realistic based on your personal circumstances including factors such as age, income, marital status, and family commitments.

Setting and achieving your short-term goals can also give you the boost needed to continue working towards the long-term ones that may take a longer time to achieve.

2. Start a saving habit– as much or as little as your budget allows
You can start small, by putting away RM5, RM10, or RM5 every week or month. It doesn’t have to be a lot and you can adjust the amount to suit your budget. Once you’ve formed the habit of saving regularly, you might be wondering how best to handle the money you’ve set aside every month.

Spend less and save more. With a clear understanding of your monthly spending habits, you can figure out where you can cut back. Be a savvy shopper - find deals, use coupons, and pay in cash. You might see that your electricity bill is creeping up, and you could look into ways to rein it in. You may even find that you’ve been saving more money by not going out as much.

Start using a budget calculator to find out where your money goes. Use that calculator to see what’s making you fall short, break-even, or come out ahead.

3. Build an emergency fund
No matter how hard you try to save, life has a way of throwing unexpected financial demands your way. That’s a given. A little preparation for unexpected expenses can go a long way to avoid financial stress.

An ideal emergency fund lets you:

• save and grow your money during good times and
• having a financial safety net when hard times come along.

Emergency funds create a financial buffer that can keep you afloat in a time of need without having to rely on credit cards or your savings. For such cases, you may consider putting some of your spare cash in a high-interest savings account. You can’t hold investments in them, but they do pay slightly more interest than an ordinary savings account. You can withdraw the funds easily whenever you need them. While you can’t usually predict a financial emergency, you can prepare for one.

3 Long-Term Financial Goals to Try In 2022

1. Save up for retirement
Did you have to dip into your savings to cover COVID-19-related expenses last year? Now’s the time to get your savings back on track. With some pre-planning, you can increase your chances of achieving financial independence after retirement.

To achieve a reasonable standard of living, your retirement saving will depend on:

Retirement age.
Begin by determining when you wish to retire and how much you potentially need for a comfortable life after retirement. The earlier you plan to retire, the more you’ll have to save and invest.

Lifestyle.
Do you want to downsize, relocate, or maintain the same quality of life? Do you want to enjoy luxuries like overseas travel or eating at nice places?

These are the questions you should realistically answer when you’re planning your retirement budget. Your lifestyle choice plays a key role in how far you can stretch your retirement fund.

Inflation.Thanks to inflation, the prices of goods and services will increase over time. For example, if there’s an inflation rate of 3% every year, what costs RM1,000 today, in 15 to 30 years from now, it could cost RM2,427. So, if you have a long way to go until you retire, you’ll need to account for inflation in your estimation.

Give this retirement calculator a try and start planning today.

2. Get the right life insurance / takaful
Having an emergency fund can help see you and your family through a short-term crisis. But what about the long-term challenges your family could face if you were to die? This is where life insurance /takaful plays a starring role.

No matter your age or current financial situation, you likely have people who rely on you financially. Perhaps you have a mortgage with your partner to pay off, debts, and loans that others have co-signed for, or kids to raise. These financial obligations don’t die with you. Instead, they’re passed along to someone else.

With the right life insurance/ takaful plan, your family or other beneficiaries can use the money from the death benefit* to cover any expenses or debts that they had relied on you to pay for.

Life insurance / takaful was designed to help your family cope with the financial impact of your death. And while you’re still alive and healthy, it can bring you peace of mind. You’ll know that the people you love will be financially protected when you’re no longer around.

Check out our wide product range to help you understand further.

3. Take steps to plan your estate
If you have life insurance, you’re already doing a lot to protect the people you cherish. But you may also want to make sure all your assets go to the right people after your passing. And you’ll want this to happen with as little stress as possible.

Begin by listing all your assets, including:

• bank accounts,
• investments,
• registered savings plans,
• real estate, etc.

Then ask yourself two things:

• who do you want to leave your assets to; and
• who do you want to be your executor (the person who carries out the terms of your will after your death).

Then you’ll be ready to see a lawyer or legal professional about writing your will.

In contrast to a will and division of an estate, you can leave behind a perfect gift for your loved ones by nominating your beneficiary for a simpler inheritance process through hibah (gift of love).Hibah is the unquestionable giving of a gift by a person to another person voluntarily while he/she is still alive.

If want to hibah to your beneficiaries, visit the various takaful plans we offer that suit you.

Review your finances with an advisor
Feeling a little overwhelmed? Sorting through your finances can be intimidating if you’re new at it. But you don’t have to do it alone. An advisor can:

• walk you through all your options,
• check off everything you need to address,
• help you make good financial decisions and
• help you build a plan that suits all your needs and goals

They can also answer questions or address any financial concerns you may have. Speak to our advisor today.