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qarezma

How much household savings should we have?

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Both hubby and I are working in senior engineer positions, can say that our combined income is in the comfortable level for a family of 3. Every month, after salary comes in, after paying rental, hse loan (small scaled apmt), loan for 2 cars, credit card bills, other bills, babysitter, etc.. we have some good savings. Then comes personal insurance due dates or car insurance payments.. it sucks up all our savings we had the past few months! it just bring my mood so down... The good thing i can think of now is 2 of us have our personal insurances, and some savings insurance for the little one. Also medical is fully covered by my company. We also have some FDs here and in Singapore. Planning to buy a house by end of this year, if we decide to stay in Malaysia... i think EPF withdrawal would be sufficient for downpayment of the house.

My hubby, on the other hand, is pretty carefree in this matter, as he is with his eating patterns (hehe..), only i would keep a tab on these things. Otherwise hubby doesnt spend much on himself, he mostly is into dining out and eating good food for entertainment.

Should i be worried?

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Q, my hubby is the same as well :) I guess it really depends on how tight a financial situation one is in. If you guys are doing ok, can let him be, as long as insurance has been provided for your little one, and you have catered for your little one's future education.

It is good to invest in property. You can start off with one by using your EPF withdrawal. But you should discuss with HB on investing in more properties in the future, which can yield good returns.

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You are almost in the same situation as me. Only difference is, I am single and you are married. I save almost 50% of my income every month and eat mix rice daily (cheap) and yet 1 holiday or 1 thing happens and there goes my savings !

I am definitely worried of my financial status !

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Qarezma, if you were to get a property, u gotta save up alot. dining out and entertainment is really limited cos we still need to emphasize our kid's spending. Another option would be changing jobs to opt for higher pay. You can see price is up for all stuff. by next year, gov tax for everything we spend on. this really freaks me out.

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oh yeah, tax next year is terrible! Dining out oso not often, like once or 2 times a month... for special occassions.. so far havent taken any holiday trip as yet...

we do have one apmt in shah alam currently, rented out, it is paying for itself... that is our investment at the moment and we dont plan to stay there. If everything goes well we should be getting our own place soon...

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I was looking into properties too recently. But the way the trend and property value goes kinda frightens me. Property prices are going up way too fast. There is no way young ppl like us gonna be able to afford one. Even if we do afford 1, with the current trend, its very mind boggling to think what will happen if the property bubble burst since the price of properties keep escalating in a very unhealthy way.

Also, I have surveyed around recently, most ppl now build luxurious condos , semi-Ds & Banglos. How to afford? Those service apartments are kinda expensive too!

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it is just me or everything is just expensive?

one outing trip to the mall/dining can cost abt rm100-200? even if makan normal stuff.. unless go to the chinese coffee shops...

many of the expenses we cannot avoid oso.. like bring out family makan once in a while.. give allowance etc...

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IMHO, the easiest way to save money is to stay at home and don't go out ... esp to the mall!!.

When we go to the mall, we will need to spend on food and drinks minimal. If wanna to watch movie, 1 couple seat with 1 set of coke and popcorns already cost you RM 30 ++ Not to forget snacks or ice cream treat. Even if you don't buy anything and just do window shopping, you will find that you are RM 100-200 poorer.

I just feel that things are inflating in a much faster rate than our salary.

My parents used to tell me about how they managed even tho they are earning so little in those days. Well, in those days, food are 10 x cheaper. Properties are now 10x more expensive too. And yet we are not earning 10x more ?? How can you compare?

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Indeed the properties are rising like mad.. i wonder how are those young ppl gonna get 1 for themselves in future. even cheaper ones are so GD far, like kajang, sg long and nilai. on my..

everything is getting expensive day by day. for myself, i dont eat much now., no fancy nicey food. 1st, i can save $$$ frm tht, secondly to keep fit..tee hee..

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Property prices will always outpace your income. Let me give you some examples of property prices.

In Kajang, in Taman Bukit Mewah a DSL Intermediate 20 * 75 by Metro Kajang was launched in 2004 for RM238,900. In 2010, the new launch for the type of Properly at same area was launched at RM327,600, an increase of RM88,700 or 37%. Now Kajang is considered to be a “Not Hot Area”.

In Seri Utama, at Kota Damansara, which is considered to be a “Hot Area”, a 22 * 75 intermediate by See Hoy Chan Group was launched in 2004 at average RM330,000. Today, the average asking price is about RM600,000, an increase of RM270K or 80%.

In Bandar Puteri Puchong by IOI, the average asking price in 2004/2005 for an intermediate DSL was only RM400K. Today, it has gone up to average RM600K, an increase of RM200K or 50%.

The key is to buy what you can afford now and not to wait and save for the property for few years cos by the time u have savings, the price has increased so much.

Lets talk about Loan Repayment now.

Just say for argument sake, the property price is RM550,000 and the buyer makes a 10% downpayment and takes a half a million (RM500K) housing loan. Based on a conservative interest rate of 5% through our the tenure, the monthly repayment tenure are as follows:

20 Year Housing Loan – RM3,299.78

25 Year Housing Loan – RM2,922.95

30 Year Housing Loan - RM2,684.11

We will take the most conservative Housing Loan of 30-years with a monthly repayment of RM2,684.11 and just round-up to RM2,700. Based on BNM Guidelines that a single loan repayment should not exceed 1/3 of the Gross Pay, this means that the applicant must have a gross income of RM8,181.82, rounded up again to say RM8,200.

So, how does this RM8,200 monthly income compare against the actual income of the average Malaysian. Please refer to the attached file Monthly Income which can also be found at http://www.cpiasia.net/english/images/media/mm_83_730.pdf

- The average household income in Malaysia in 2007 is only about RM4,000

- The average minimum monthly basic salary for executives without prior working experience (i.e. fresh graduates) in 2007 is only RM2,500

I don’t have the full figures for 2010 yet but based on a Seminar conducted by the National Economic Action Council, 80% of income earners in Malaysia earn less than RM3,000 per month. See Page 6 of attached NEAC Report which can also be found at

http://www.investmalaysiaconference.com/we...lenary_NEAC.pdf

As for the rest of the segments, needless to say, it would not have doubled in just one or two years, which means that even a normal landed property in just Puchong / Kota Damansara is beyond the reach of many average professional Malaysians. How can a fresh graduate or average Malaysian be expected to afford a decent Landed Property, unless they have wealthy parents to fork out a huge downpayment. We are only talking about Puchong / Kota Damansara, hardly elite areas.

What is more worrying is even with the New Economic Model which will propel Malaysia into a Developed Country with a expected GDP per capita of USD20,000 by 2020 (See Page 13 of NEAC Report) or RM68,000 (monthly salary of RM5,667) (based on conservative exchange rate of USD1 = RM3.40) , these people will still cannot afford a landed property in Puchong or Kota Damansara at today’s prices and we have not taken into account inflation for next 10-years.

Yes, the Government must do something about escalating Property Prices, else, the divide between the rich and poor will increase and more social problems will arise.

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Dear,

After having my little one, my spending is more than what we had before.

Before that we can just stay at home for our meal before we going out but now we are mostly settled it at outside, funny right!? simply because we do not have a kitchen to use thus eat out is our solution.

Okie minus away the current situation now, our expenses is definitely almost double up after the lil one has arrived but luckily we still can live quite comfortably but we still need to have some backup for rainy season.

Try only spend on the necessary items (ahh this phrase cannot apply to me =D hahaha I'm an online shopping queen =D, but it really applied to my HB well =p) try to get good quality stuffs (alto expensive) rather than cheap stuffs where required you to keep on spending your $$ to change it, it happened to us few rounds and eventually we said ok, get the good one alto expensive but at least we don't need to be headache and keep on getting the same stuff over and over, eventually we spent more.

Eat-out - with the little one around, we are not longer sitting at kopitiam for our meal, so we turn to any place with comfortable air conditioning for her, well well, 1 simple meal for 2 at least RM50 or the cheapest KFC!? hahahaha but luckily we only went out once a week, daddy needs to stay at home to supervise the renovation while me and the lil monster were at my mum place for every Saturday until the house is ready, so we only going out on Sunday morning till afternoon around 1/2pm.

Guess some of the stuffs we really cannot avoid but some yes like me, stop or reduce my online-shopping for my monster =D

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yeah, property prices go up faster than the salary increase of the average malaysians. Which is why it is even more important to invest in property as and when you can afford it. Otherwise, any savings that you have will just depreciate in value over time since fixed deposit interest rate is way below inflation rate.

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Q, my hubby is the same as well :) I guess it really depends on how tight a financial situation one is in. If you guys are doing ok, can let him be, as long as insurance has been provided for your little one, and you have catered for your little one's future education.

It is good to invest in property. You can start off with one by using your EPF withdrawal. But you should discuss with HB on investing in more properties in the future, which can yield good returns.

Hi Ally'sMom, I'm sure you have good intentions when advising others to invest in properties. and I invest in properties too.

However, I would also want to emphasis that just like any other investments, property investment carries a risk. Supposedly property investment risk is much lower than investing in stock market, however, if one has not got sufficient holding power and liquidity, property investment can be really risky too, especially in current environment where the bubble is growing.

The prices been increasing drastically during this year, and those who invested 2 - 3 years back are enjoying handsome returns, and hence more and more people have the mentality that 'invest in property sure make good profits one, especially the under contruction ones' and hence the new launches are getting more and more expensive and still sold out within days/weeks. The other trick that the developers do is, very low downpayment, and developer bear interest during construction (DIBS scheme) to attract younger buyers/over leveraged buyers :sauer2:

If you can afford it, and it's a good property (location, price, potential to grow), I'd say, why not. But have you considered this, what if the market is oversupplied when the property is ready (I won't be surprised at the rate that we are going), and you can't rent it out or sell it within 6 - 9 months. Have you got enough funds to cover the instalments?

As for ownstay, I'd say, anytime is a good time to buy, especially landed properties, the price is unlikely to go down, even when the market crashes, the impact to you would be minimal as compared to investment properties. Besides, personally I think the price has not peaked yet, so it's still to your advantage to buy now than later.

Feel free to disagree with me, HB always think i'm overly prudent, but then, even he has trouble finding reasonable buys these days and we haven't bought anything since Dec last year :cool:

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qiqi, you are absolutely right :) I didn't go into detail that one should always fully evaluate an investment before deciding whether to invest in it. And one should always be very careful about leveraging as well. A lot of banks these days are happy giving 90% loan financing. But the recommended leverage, on a long term basis, is actually 60%. But also take into consideration expected salary increase over time, which makes a property affordable over time. That is one thing I realise growing older :P

I am also a very conservative investor. So I only invest in landed properties in good locations. I didn't even dare invest in Desa Park City eventhough it was sold off like crazy, coz I think that may be overpriced.

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just wanted to gather some feedback here.

do you really keep track and do a proper mthly planner on your income & exp?

do you practise combining both yours and hubby's income then from there, track how much goes to what where etc.

i actually wanted to come out with a planner to track this, but all these while, we dont really combine our income. he pays for some household exp while i pay some.

appreciate some feedback on how best we could plan wisely. thx.

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i'm also facing the same financial dilemma here :sad:

Got married in Nov 2009, and i'm 30 this year, hubby is 36. both Executives, with income around 4k. we bought a double storey 20x65 (RM180k) at bandar bukit raja Klang in 2004, now renting out. Loan with bank is 15 years, still need to top up another RM360 a month for installment. the house is purely for investment purpose. we have 1 car only, finished paying the loan.

hubby wants to get a house next year at Klang bukit raja also, for own stay. we heard there's a new launching by sime uep and the price is rm480k for a 22x75 house. for me, tat's considered very high! almost half a million! :wacko: we plan to have joint loan with the bank, and i think by taking the max repayment period, we'll be paying around rm2.5-2.8k a month! Hubby also plans to buy a new car (he's aiming for Proton Inspira), and by trading in our old car, I think the repayment period for 7 years would be rm800-1k a month!

Not forgetting, we need to pay for monthly and annual insurance premiums, credit card, etc.

Right now, I dare not think of having a baby next year. Both of us are ok with being "single" and without baby now.

Hubby says buying a property is always good, the longer we wait, the higher the price and we might not get a good location anymore. About new car, we can still put the plan aside 1st.

We also haven't gone for our honeymoon yet, altho we already went to Bali 3 months prior to our wedding as a pre-wedding holiday. I always want to go Australia, but the currency is so high now...not worth to go :bye:

I really duno how to survive in the current economy now. Everything is very expensive, but our salary increment is little!

my granma keep pushing me to have a baby. she said no good if I have a baby when i'm old, dangerous, etc...i understand her concerns, but I cant even take care of myself yet..how am I supposed to take care of a baby? I'm not prepared mentally and financially!

everytime i hear people talking of financial planning, retirement planning, etc...i'll be very concerned..me and hubby have adequate insurance protection, but when it comes to EPF, our account will be very little after withdrawing for our 2nd house...i think the only good asset that we have now is the double storey house which we are renting out...

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i'm also facing the same financial dilemma here :sad:

Got married in Nov 2009, and i'm 30 this year, hubby is 36. both Executives, with income around 4k. we bought a double storey 20x65 (RM180k) at bandar bukit raja Klang in 2004, now renting out. Loan with bank is 15 years, still need to top up another RM360 a month for installment. the house is purely for investment purpose. we have 1 car only, finished paying the loan.

hubby wants to get a house next year at Klang bukit raja also, for own stay. we heard there's a new launching by sime uep and the price is rm480k for a 22x75 house. for me, tat's considered very high! almost half a million! :wacko: we plan to have joint loan with the bank, and i think by taking the max repayment period, we'll be paying around rm2.5-2.8k a month! Hubby also plans to buy a new car (he's aiming for Proton Inspira), and by trading in our old car, I think the repayment period for 7 years would be rm800-1k a month!

Not forgetting, we need to pay for monthly and annual insurance premiums, credit card, etc.

Right now, I dare not think of having a baby next year. Both of us are ok with being "single" and without baby now.

Hubby says buying a property is always good, the longer we wait, the higher the price and we might not get a good location anymore. About new car, we can still put the plan aside 1st.

We also haven't gone for our honeymoon yet, altho we already went to Bali 3 months prior to our wedding as a pre-wedding holiday. I always want to go Australia, but the currency is so high now...not worth to go :bye:

I really duno how to survive in the current economy now. Everything is very expensive, but our salary increment is little!

my granma keep pushing me to have a baby. she said no good if I have a baby when i'm old, dangerous, etc...i understand her concerns, but I cant even take care of myself yet..how am I supposed to take care of a baby? I'm not prepared mentally and financially!

everytime i hear people talking of financial planning, retirement planning, etc...i'll be very concerned..me and hubby have adequate insurance protection, but when it comes to EPF, our account will be very little after withdrawing for our 2nd house...i think the only good asset that we have now is the double storey house which we are renting out...

I'm no financial planning expert, but thought there might be a few things that u can consider

1. Re-financing the investment property - what was the interest rate you are paying? Since it's >5 years (should be after exit penalty period?) and 2004 rates was quite high, you can potentially save $$ from it, even after considering valuation fee etc that you have to pay. Also, consider maximising the loan period to 30 years so your rental will cover the instalment and you don't have to top up. Besides, you can actually cash-out on those amount that you paid in the past few years, assuming that the property value increased, that should help on the new house downpayment :cool:

2. I sort of agree with house prices is always increasing, especially for good locations with amenities. But have you consider sub-sale properties? New launching is getting so expensive nowadays that makes me think <5 years houses might be a good deal now, since u get to move in right away, still not too old and need lots of renovation, and you get to know your neighbours n the neighbourhood before you commit :)

Actually baby planning should not wait too long too, your hubby is not so young already, should aim that all your kids graduate from college by the time you retire, else you'll have headache with the education funds too. All the best ya!

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i'm also facing the same financial dilemma here :sad:

Got married in Nov 2009, and i'm 30 this year, hubby is 36. both Executives, with income around 4k. we bought a double storey 20x65 (RM180k) at bandar bukit raja Klang in 2004, now renting out. Loan with bank is 15 years, still need to top up another RM360 a month for installment. the house is purely for investment purpose. we have 1 car only, finished paying the loan.

hubby wants to get a house next year at Klang bukit raja also, for own stay. we heard there's a new launching by sime uep and the price is rm480k for a 22x75 house. for me, tat's considered very high! almost half a million! :wacko: we plan to have joint loan with the bank, and i think by taking the max repayment period, we'll be paying around rm2.5-2.8k a month! Hubby also plans to buy a new car (he's aiming for Proton Inspira), and by trading in our old car, I think the repayment period for 7 years would be rm800-1k a month!

Not forgetting, we need to pay for monthly and annual insurance premiums, credit card, etc.

Right now, I dare not think of having a baby next year. Both of us are ok with being "single" and without baby now.

Hubby says buying a property is always good, the longer we wait, the higher the price and we might not get a good location anymore. About new car, we can still put the plan aside 1st.

We also haven't gone for our honeymoon yet, altho we already went to Bali 3 months prior to our wedding as a pre-wedding holiday. I always want to go Australia, but the currency is so high now...not worth to go :bye:

I really duno how to survive in the current economy now. Everything is very expensive, but our salary increment is little!

my granma keep pushing me to have a baby. she said no good if I have a baby when i'm old, dangerous, etc...i understand her concerns, but I cant even take care of myself yet..how am I supposed to take care of a baby? I'm not prepared mentally and financially!

everytime i hear people talking of financial planning, retirement planning, etc...i'll be very concerned..me and hubby have adequate insurance protection, but when it comes to EPF, our account will be very little after withdrawing for our 2nd house...i think the only good asset that we have now is the double storey house which we are renting out...

I'm no financial planning expert, but thought there might be a few things that u can consider

1. Re-financing the investment property - what was the interest rate you are paying? Since it's >5 years (should be after exit penalty period?) and 2004 rates was quite high, you can potentially save $$ from it, even after considering valuation fee etc that you have to pay. Also, consider maximising the loan period to 30 years so your rental will cover the instalment and you don't have to top up. Besides, you can actually cash-out on those amount that you paid in the past few years, assuming that the property value increased, that should help on the new house downpayment :cool:

2. I sort of agree with house prices is always increasing, especially for good locations with amenities. But have you consider sub-sale properties? New launching is getting so expensive nowadays that makes me think <5 years houses might be a good deal now, since u get to move in right away, still not too old and need lots of renovation, and you get to know your neighbours n the neighbourhood before you commit :)

Actually baby planning should not wait too long too, your hubby is not so young already, should aim that all your kids graduate from college by the time you retire, else you'll have headache with the education funds too. All the best ya!

u r right! ppl tend to think new launch sure will have high cap appreciation, but never thought of the risks involve during the construction period and actually nowadays there are quite some good deals in the property sub-sale market, just have to put more effort to find 1..

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I absolutely hate it when all my savings are swooped away by e.g. just one trip. It's so hard to restructure a few spending habits but I'm definitely trying my best to save as much as possible. For the more extravagant things I've been saving through using online deals. I've tried quite a few but this has been my favourite thus far.

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CFA, let alone individual monthly salary rm8k+, let's talk about combined income rm8k+.. even if combine income rm8k++ also will be all gone in a blink of an eye with very minimal savings..

My contribution: nanny/mum's allowance/personal insurance/daily expenses (toll/cheap chap fan lunch)/household stuff (tissue rolls, milo, detergent, canned food, etc)

Hubby's contribution: installment for our house & car/bills (electricity, water, phone, internet)/ "for sik" (wet stuff like chicken, meat, fish, vege, fruits coz he does the marketing once a week, while i takecare of the dry stuff)/his mum's allowance/personal insurance/diapers (mamy poko, 2 packs per month, rm53 per pack - retail price in Giant without promo)/milk formula (6 or 7 enfalac per month, rm62.99 per pack - retail price in Giant without promo.. can get for rm59 from yok choi pou)..

So you can see, where does everything landed..not yet talk about car service, or car suddenly have problems need to repair, or father/mother birthday, FIL/MIL birthday, father's day for both sides, mother's day for both sides, sister's birthday, SIl birthday, whoever birthday, need to eat out to celebrate, etc... anyway, minus all that, left a bit for minimal luxury/entertainment like eating out twice or 3 times per month (mostly weekends) in fancy restaurants like Chilis/Tony Roma's/TGIF.. Lucky I am working, so i have extra for pampering myself a bit: facials/shoes/bags/online shopping stuff/i can buy more things for baby in online shopping website as well.. imagine if i dont work, eeeyewww...

Everything is "lai seong pou ha" one la.. hubby pays for "big" things, i pay for "minor" things, then if wana go out makan in fancy restaurant, i offer to pay, no issue.. buy cute baby stuff online, i can buy, coz i am working, no issue.. so it's important for us girls to still work after married..at least got own income, financial independent (although got commitment la, but at least no need to hulurkan tangan and ask hubby for money if wana go for facial)..but NOT unless hubby earns a bomb and can support the family and all the expenses, and even ask u no need to work, on top of that, give u monthly allowance to spend...if hubby ask me no need to work+can support everything, i also dont wana work lor.. stay at home, jaga anak, do some online business, perhaps baby things or cupcakes, oh, cupcakes normal only, jelly cakes more cute.. wah, who dont want wor..

Eh, run out of topic liao, sorry ahh.. :wub:

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