By Hanniz Lam
New year, new hope! How many times have we felt super motivated as the new year begins?
Same thing every year. We’re hopeful human beings.
We declare to ourselves we’ll take better care of ourselves. We’ll visit our parents more often. We’ll bring our kids out more. We’ll make better business decisions. We’ll make more money!
So since this is a money blog we won’t be coverering the other things but we sure will share how you can save money with this 5 tips!
1. Use a high interest savings account
We’ve already talked about this last month but if you’ve been busy finishing up your work so you can clear your leave and use that as an excuse to ignore our new posts, here it is again.
Since there are so many banks to choose from, we’ll pick one.
As of September 2021, the Standard Chartered Privilege$aver savings account offers the highest interest rate on a savings account, provided the account holder fulfils three conditions (Save, Spend, and Invest/Insure) to increase the interest from the base 0.05% p.a..
You will need to deposit at least RM3,000 in fresh funds every month to unlock an additional 0.75% p.a. interest via the Save requirement.
On top of that, you can earn up to 1.50% p.a. interest when you fulfil the Spend requirement: 0.75% p.a. when you spend at least RM1,000 with your Standard Chartered credit card, and another 0.75% p.a. when you perform at least five retail transactions on your debit card.
Finally, unlock another 2% p.a. for up to three months when you tap into the Invest or Insure requirement. You can do so by investing a minimum of RM30,000 in unit trust, or purchase an insurance policy with a minimum of RM30,000 annual premium.
The Standard Chartered Privilege$aver account has set a cap on the amount of interest that can be earned via the three bonus categories. For each category, bonus interest will be credited on up to RM100,000 of your monthly average balance (MAB).
At 4.30% p.a., you’ll be earning a pretty good chunk of interest each month. A good way to hit the save requirement for a 0.75% p.a. interest is to use this account as your salary deposit account – you just need to inform your HR department for this.
Put a note on your laptop so that’s the first thing you do when you get back to the office.
It’s also not a stretch to spend with StanChart’s credit and debit cards. For credit cards, in particular, the JustOne Platinum and Liverpool FC Cashback credit cards yield cashback as you spend, although the JustOne Platinum and Liverpool FC Cashback cards have both seen some massive adjustments to their cashback terms in recent times.
For some added context, this latest earning structure for the Privilege$aver campaign was an update that was introduced in the beginning of February 2021, which initially allowed accountholders to potentially earn more interest than the previous structure.
In early June 2021, however, StanChart rolled out further revisions to bring the total interest to its current 4.30%.
2. Cut Your Car Insurance In Half (or More)
I’ve been using an agent to handle my car insurance and road tax the past few years as I found it convenient. I didn’t mind paying a little more for the convenience. My hubby on the other hand is a super tight fisted man and every sen counts.
As I’ve not been driving much the past two years due to the slowdown in projects (events is a badly hit industry), it didn’t make sense to pay so much for such low mileage.
So hubby advised that I check out Pacific & Orient Insurance. I opted for the lowest mileage and saved about 40% of what I usually pay.
3. Control your Credit Card spending
Banks have structured their offerings in such a way that purchasing items using their credit cards could benefit you in the form of rewards and other freebies.
It is difficult to resist the temptation to swipe a credit card when you’re eyeing that electronic gadget, smartphone, outfit or designer handbag.
At the point of purchase, you rarely consider how you will feel when the bill arrives later in the month. You’re only feeling happy with your purchase and imagining yourself showing off the latest gadget or purchase to your friends.
And then, a few weeks later when the credit card bill shows up, you experience that sinking feeling of knowing that you cannot possibly settle the bill in full.
So, you make a payment for the minimum balance repayable, and resolve to be more responsible next month so that you can settle the bill in full.
However, the same thing happens the following month. And the month after that.
If you’re struggling to keep your credit card spending under control consider using just ONE general purpose card instead of a gazillion cards.
You can stick to one that offers the best cash back or points rate for everyday spending and more easily keep track of your current balance. You’ll also limit the damage you can do because you won’t be able to max out multiple cards.
Figure out how much of your income you can put toward discretionary purchases and then see what you can charge on your card without exceeding it. The 50-40-10 budget is an easy way to do this and involves limiting essential spending to 50% of income, savings and investments to 40%, and wants 10%.
If you bring home RM3,000 per month, and you know you can spend 10% of monthly income on discretionary expenses, then you have RM300 available to spend.
So your monthly spending limit on your credit card should be RM300 — assuming you use your card only for these discretionary purchases. As soon as you’ve hit that amount, you have to stop spending for the month. Just STOP!
If you tend to have a problem with overspending on online shopping, try removing your cards from your online accounts.
When your card is stored, it’s really easy to buy things without thinking about it — especially because many websites facilitate one-click purchases.
If you have to manually type in your card number, on the other hand, this requires much more of an effort on your part and is likely to make you think more carefully about the purchases you’re making.
4. Cut Your Expensive Home Insurance
If you’re a homeowner, you probably have home insurance, but you hardly ever think about it. That’s good — it means you haven’t needed to use it. But it also means you don’t know if you’re being overcharged for it. 2022 is your time to cut that expense down.
There are three main types of policies which you can buy to protect your home :-
1) Basic Fire Policy
This policy covers your building and/or contents from loss or damage caused by fire and lightning. The coverage could also be extended to include special perils e.g. storm and tempest, flood, earthquake etc.
Under Bank Negara Malaysia’s tariff liberalization framework, insurers are also allowed to introduce non tariff fire insurance products with variations in coverage, terms and conditions. Policyholders are advised to refer related enquiries to their agents or insurers.
Fire policy can be extended to cover the following perils with additional premium:-
- Aircraft damage
- Earthquake and volcanic eruption
- Storm tempest
- Flood damage
- Impact damage
- Bursting or overflowing of water tanks apparatus or pipes
- Riot strike and malicious damage
- Electrical installation Clause B (for businesses)
- Bush fire (for businesses)
- Subsidence and landslip
- Spontaneous combustion (for businesses)
- Damage by falling tree or branches and objects thereform
- Sprinkler damage (for businesses)
Smoke damage (for businesses)
2) Houseowner Policy
A houseowner policy provides additional levels of cover for your property over and above a standard fire policy.
This means cover for the physical structure of your property such as walls, roof, fixtures, fittings, outbuildings, etc. for severe weather damage, floods, fire, burst pipes, and a range of other negative events that could impact your home.
3) Householder Policy
The householder policy is designed to provide additional cover for the contents of your home.
This means in the event of an insurable event such as fire, lighting damage, floods, burst pipes etc… the value of your contents are recoverable as part of the policy.
This policy can also provide additional cover for registered individual homeowners in the event of fatal injury.
Here are 8 ways to save.
1. Raise your deductible
A quick way to reduce your premium is to raise your insurance deductible, the amount you pay if you have to make a claim.
Raising your deductible puts money in your pocket every month that otherwise would have gone to your insurer. Just be sure you have enough saved to cover a bigger out-of-pocket expense if you need to make a claim.
2. Make your home more secure
Even the basics can save you money when it comes to home security.
Having a smoke detector, burglar alarm or deadbolt locks on your home can earn you a 5% discount. Going a step further by adding a comprehensive sprinkler system along with an actively monitored fire and burglar alarm could save you as much as 15% to 20%.
3. Skip small claims
It may be tempting to file a claim with your insurer even when something relatively minor happens, but you may be better off in the long run if you pay out of pocket for these smaller expenses. That’s because some insurers offer discounts if you remain claim-free for a certain period of time, usually a few years.
4. Ask about lesser-known discounts
Unless you check, you may never know what other savings you might be eligible for. Some insurers offer additional discounts if you:
- Don’t have any smokers living in the house.
- Recently bought your home.
- Pay your premium via automatic bank payments.
- Choose paperless billing.
- Work in a specific career, such as teaching, engineering or firefighting.
5. Account for home improvements
If you’ve improved your home, you may have made yourself eligible for homeowners insurance discounts without even realizing it. Adding features such as storm shutters and impact-resistant roofing — which make your house tougher to damage — could result in insurance savings. You might also earn a discount by upgrading outdated plumbing and electrical systems.
6. Bundle your auto and home insurance
Bundling auto and home insurance with the same company typically saves you 5% to 15% on your homeowners premium. Although it could vary depending on your company, many insurers provide discounts if you buy more than one type of policy from them.
7. Get rid of high-risk stuff
Even though it may be fun, having something deemed an “attractive nuisance” by your insurer — think trampolines, swimming pools or playground equipment — can add to your homeowners insurance premium. Getting rid of those items could result in serious savings on your insurance.
8. Shop around
Rates for identical homeowners insurance coverage can vary widely from one company to the next. Some homeowners could save RM1,000 a year or more by finding the cheapest rate.
Most companies have tools on their websites that allow you to compare different companies’ rates to let you see if you might be able to save by switching insurers.
5. Cut Your Grocery Budget Down
Groceries account for a good chunk of your budget. Everybody’s gotta eat. You might as well earn a little money back while your groceries are being bagged up and cut down your budget for 2022.
Check out what ShopBack has to offer before you make your purchases.
So what do you think? Are you able to do the above and make your hopes come true?