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No matter what point you are at in your working life, saving money should be a part of it from the very beginning. There are some who are already enjoying the fruits of their labour, while others may still be climbing their respective career ladders. Regardless of your current status, saving should be a constant priority.


Without appropriate savings, emergencies can become unmanageable, and retirement becomes a period that’s fraught with anxiety instead of the relaxation that we all envision. Before jumping into specific savings techniques and the mindset changes that would help, let’s look at the different types of savings.


Emergency savings1

This type of savings is exactly as it sounds – the money that you put into your emergency fund should be used for emergencies only. It acts as a cushion in case you lose your job, become ill, or have a large unexpected expense. Generally, you should have enough savings to cover your expense for 6-9 months should any of these emergencies occur. This type of savings is important for a few reasons – it prevents you from falling into debt during hard times, and it also provides you the peace of mind to make other life decisions.


Short-term savings2

Short-term savings are targeted towards the things that you want to do within the next 1 to 3 years. Are you planning to take a big family vacation in 2 years? How about getting a new car within the next 3 years? It could also be something smaller like putting aside some money for Christmas gifts for your friends and family. Short-term goals are not things that you should borrow money or go into debt to achieve, and allocating some money for this category allows you to spend when you need it. Furthermore, instead of putting your money in a regular savings account, a time deposit account may be a better option as it allows you to potentially earn higher interest.


Long-term savings1

The money that you put in here goes into building your future. Putting a down payment for a home, planning your dream wedding, or saving to start your own business all falls into this category. Not surprisingly, so does retirement, even though it is often overlooked. Depending on how far away you are from these goals, you might want to save for them in a (fixed deposit account) or you can invest some of this money into a strategic portfolio which may grow your money2. Your current risk appetite also contributes to determine the best savings plan for you.


By differentiating these 3 types of savings, you can save appropriately and avoid dipping into the wrong fund for short-term purposes.


Now that we understand the various types of savings that we may consider having, we can dive deeper into the psychology of saving. The thought of saving can elicit many different responses and emotions within people that may be positive, negative, or simply neutral. Some people are really big savers already while others may try but fail to save as much as they would like to. No matter which camp you fall into, these simple methods to change your mindset about saving may improve your attitude towards savings.


Stop equating saving with self-deprivation3

Rationally, we all know that saving is a good practice that should be encouraged in our lives. Unfortunately, sometimes it can be difficult to see its immediate effects, especially when all the things that we want to buy are staring us in the face. It can feel like a huge sacrifice to turn away from our wants and instead focus on the big picture. Instead of feeding into this mindset, think of saving as buying yourself something even more important than that new toy – your financial freedom. Having savings for the future helps you ensure financial freedom, and if you choose to view it this way, it can turn saving from a chore into an awesome investment.



Set specific goals4

Goal setting is an important part of success in every arena, and it’s no different for your finances. Having specific and realistic goals helps you to visualise what you actually need to do to achieve what you want. Keep each goal simple, and assign a time frame and amount to it. For example, if you’re planning on taking a long vacation at the end of the year, start budgeting many months in advance so you know how much you have to save. Once you have a specific figure, start depositing money into your account for this purpose on a bimonthly or monthly basis. In addition, remember to review your goals periodically on a set date so you can judge if you are accomplishing what you have set out to do. If you are, great! If you’re not, it’s ok to go back to the first step and try again.


Do you really need this?5

When it comes to saving, it really does boil down to your priorities. It is advisable to constantly ask ourselves if the things we spend on are indeed things that we need. A simple example would be cable TV. Let’s say the average cost per month for a basic package is RM170. If we take that figure and multiply it by 12 months, that’s already RM2,040. Do you really need cable TV, or can you save more by subscribing to online streaming services?


An even simpler example would be spending on coffee on a daily basis. If you spend an average of RM13/working day on a brand name frappuccino, you would be spending RM260/month, which becomes RM3,120/year. These figures might not seem very much, but it’s important to remember that these are only 2 examples of the many little things that we choose to spend on instead of saving or investing. It is true that we work hard to afford these little luxuries, but we must also remember that not spending wisely will cost us in the future.

You keep upgrading your lifestyle6

It’s great to get a promotion, or have your business do well for that year, and it’s natural for you to want to start spending more after you receive an income jump. That new smartphone is suddenly affordable, along with those branded clothes you’ve been eyeing for some time. However, if you keep upgrading your lifestyle whenever your income increases, the net effect is that you are not really saving more money. A more expensive lifestyle could jeopardise your savings behaviour, and instead of spending more, change your mindset to view a pay raise as an effortless way to speed up your savings. Continue to live modestly, and put any extra income into your savings account or long-term investments. The more you save, the more you can actually do what you want with your money whenever you want.


Find friends with your values3

Everything is easier when you’re in good company. Having friends who subscribe to the same goals as you do makes encouraging good savings behaviour much more convenient. Instead of going out to an expensive bar or restaurant every time you meet up, friends who are supportive would be more than willing to do a dinner party at your place. Instead of pressuring you to buy a new car on credit, they would understand why you’re choosing to keep your old one to remain debt-free. On the contrary, having friends that constantly pressure you to spend more would make it a lot easier to fall into the trap of overspending. If all your friends fall into the latter category, maybe you could be the first to encourage them to spend more wisely, and as an added bonus, save more.



Saving doesn’t come naturally to a lot of people, and it can be a difficult behaviour to cultivate at any age. Thankfully, there are many tips and tricks that can cast saving in a positive light. Changing your mindset and perception on saving is only one method, but it’s a good place to get you started on reevaluating your priorities when it comes to saving. With some time and effort, everyone can become the savings superstar that they deserve to be.

1, “3 Ways to Think Differently About Savings”, April 23, 2015.
2, “Savings Strategies for Different Goals”, April 18, 2015.
3, “7 Tips To Think Differently About Your Money And Become An Everyday Financial Superstar”, December 4, 2015.
4, “Setting Goals”, October 15, 2012.
5, “Want To Save Money? Change Your Mindset”, March 19, 2015
6, “3 Tips to Stay in the Money-Saving Mindset”, December 14, 2015.