At the recent She Leads 4 event by Sinar Daily, a standout moment came from a panelist who shared valuable financial wisdom, highlighting the flexibility and effectiveness of saving strategies.
She explained that personal saving habits can vary, but adhering to formulas such as the 40/40/20 or 50/40/10 can significantly impact financial stability.
For clarity, the 40/40/20 formula suggests allocating 40 per cent of income for expenses, 40 per cent for commitments like loans and mortgages, and 20 per cent for savings and investments. Alternatively, the 50/40/10 split divides income into 50 per cent for living expenses, 40 per cent for debt obligations, and 10 per cent for savings.
These strategies are particularly beneficial for the average Malaysian, especially women who don’t have to factor in alimony.
Balqais Yusoff, the head of EPF's policy and strategy department, reinforced the value of these techniques. She said: "I think it can be done; it only requires discipline."
She drew inspiration from Warren Buffett, who began saving at just 10 years old and amassed a multi-million-dollar fortune by 30.
"Even if he wasn't a multi-millionaire, with his saving habit, by 60, he would still accumulate 12 million dollars," she added, showcasing the long-term benefits of disciplined saving.
Balqais also urged those earning the minimum wage of RM1500 to avoid unnecessary withdrawals. With consistent savings and a modest dividend increase of 5-6 per cent per term, she noted, one could accumulate up to RM900,000 by retirement.
"It has a long-term effect covering over 50-70 years," she said, emphasizing the importance of early and consistent saving.
Meanwhile financial and wealth planner Erin Adlina Adnan highlighted that the motivation to save should stem from a desire to maintain one’s lifestyle.
"Allocate a portion of your income today for yourself in the future because you do not want your older self to suffer," she advised.
Erin shared her personal saving mentality, advising to consciously allocate money outside your bank account and invest it somewhere that will yield returns in your later years.
Also speaking at the event was Nor Fazlina Mohd Ghouse, CEO of Maybank Trustees Berhad, who provided crucial financial tips and underscored the importance of having a will, especially for the elderly. Her talk focused on how Maybank supports Malaysians in planning for retirement and ensuring financial security.