Systematic File Management

Every month we will receive utility
bills, bank statements, credit card
statements. Plus the insurance, road tax
receipt, there are too many bills and
statement to be kept for record and
future reference. Sometimes we might even
need to keep the sales receipt for
warranty purposes.

There are different ways to keep those
papers, but the point is how easy to
retrieve them when require? There is no
fix rule on this, it depend very much on
individuals liking. Basically it can be
categorized under Debit & Credit.
Anything that contribute to your net worth
can be filed under the Debit folder.
Monthly expenditure and other expenses
can be filed in Credit Folder.

Debit Folder - Salary & Wages,
Life/Medical Insurance statement,
Investment/Mutual Fund statement

Credit Folder - Credit Card Statement,
Utility Bills

Dedicated folder(s) can be created for
the document related to hire purchase,
fire insurance, home loan, receipt for
warranty.

Don't forget to have a folder to keep all
the documents and receipts that entitle
for tax reliefs such as medical bills,
PC/notebook purchase, books/magazines
receipt. It will ease our life when it
comes to go about filing our personal
income tax returns.

In conclusion, a systematic file management
with the proper filing system, it will not
only give a good image of oneself but it
reduce the time taken to search for a
particular document when it is needed.

Monthly Payment Checklist

I have been using the payment checklist
for more than a year. Initially I thought
of having a list to record all my monthly
expenses, it serves as a reminder to make
sure I always clear off the bills within the
grace period. Usually credit card company
gives 20 days grace period before any
interest incurred.

In fact, with the record,it enable me to
have a better understanding on my monthly
expenses. If we do a little bit analysis on the
data, we are able to see our expenditure
pattern. Example, I can pin point the month
which I need most cash due to car insurance,
house owner insurance, medical insurance,
road tax etc. I always aware about the utility
usage trend, try not to switch on the air-con,
light unnecessary.

Also, through this kind of habit, we are able
to tell where our money spend each month,
when to reduce and how to improve?

How to create a montly payment checklist?

Well it is very simple, get a piece of blank paper
1. Divide into 2 columns
-Column on the left mark with "Payee",
-Sub-divide the column on the right into 12 smaller
column for January to December
-Add a column with "Amount" in between
"Payee" and "January" column

2. List down all the monthly expenses
3. Estimate & write down the maximum
expenses under "Amount"

Your checklist is ready. Start to fill in the blank
every month to see your expenditure pattern.
Indeed, I planned my yearly cash flow based
on the monthly payment checklist. Now, I am
more confident about my cash flow because I can
foresee the expenses for the next few month.
Allocate the money accordingly to
avoid any complication at last minute.

Understand Credit Statement

Have you ever receive your credit card
bill with additional charges? These
charges are not from your previous
month's purchase or usage. Yes, we did.
Sometimes we forget to pay the credit
card bill because too busy, too many things
happen or simply we overlook on the
payment due date.

Recently I renewed my subscription to
Reader Digest using credit card. The
amount is RM143.06. I used to pay in time
but I totally overlook onthis matter
because I went for vacation in February.
A month later, I received the bill with
RM150.17 in total where RM5 for LATE
PAYMENT CHARGES and RM2.11 for
FINANCE CHARGE.

According to PUBLIC BANK, there are
two types of charges basically, LATE
PAYMENT CHARGES and FINANCE
CHARGE. if the minimum payment
amount is not made by the payment
due date as indicated in the statement,
a LATE PAYMENT CHARGE will be
assessed at the rate of 1% of the minimum
payment amount subject to a minimum
of RM5 (riggit Malaysia)

FINANCE CHARGE is imposed on the
outstanding cash advance transaction
balance from the transaction date until
full repayment. The charges is 18% per
annum.

The Minimum Payment Amount due
from you in respect of theCurrent Balance
(being 5% of the Current Balance or RM50
whichever is higher or if the Current Balance
exceeds the credit line, 5% of the credit line
plus overlimit amount).

By doing some calculation, we should be
able to figure out the interest we have to
pay due to the unintentional mistake we
make. By understanding the charges and
fees imposed by the credit card company,
we ought to be more alert in making
FULL repayment IN TIME under
normal situation.

Calculating Your Net Worth

What is net worth?
How often shall we calculate our
net worth?

In personal finance, net worth is
used to refer to an individual's
net financial position; similarly, it
also uses the value of all assets
minus the value of all liabilities (debt).

The formula is simple:
Net worth = the value of your assets minus
your liabilities

How often if will depends on the
individual needs, but I think we
should do it at least once a year.
Once you have all the facts in hand,
it's useful for you to plan and create
your budget in the coming years.

How to calculate? Where to start?
It's very simple, use the Internet ,
open the Google search engine, and
type in "net worth calculator", there
are plenty of online tools available
for you. You can add in the keywords
such as "Free" "Online" in addition of
net worth calculator to refine your
search or click here for the free tools.

Periodically calculating your
net worth is the best way to
measure and track your financial
well-being. If you have not calculate
your net worth before, do it now.

Cash Flow Doest Matter?

Where is my money?

I don't spend on the expensive
gadget but I still poor...

How I hope I can have $100 for
saving every month.

If you have the same experience
as mentioned above, don't worry.
Cash flow might be able to help you.
Cash flow is an accounting term that
refers to the amounts of cash being
received and spent during a defined
period of time.

By using the cash flow, one should
be able to tell where are the large
portion of her money goes to?
Don't be surprise to see your are
spending too much in buying
unnecessary things every month.

Once you have a clearer picture
on your money flow, you can have
a better planning and control to
achieve your financial goal this year.
All you need is to itemize and gather
all the monthly expenses.

The formula for cash flow is

Cash Flow = Income - Expenses

Get to know your cash flow by
using this simple tool to help you
create a budget outline. Click here .

Another free online tool for
Household Cash Flow Statement.
Click the link.

Once you have the facts, you
can experiment with changes.