Yes its official. Paypal now allows those in Malaysia to withdraw their USD funds into their Malaysian Bank Accounts! Happy day!

There are some guidelines here for linking your Paypal account to your Malaysia bank account. Basically, most banks in Malaysia are accepted and Paypal has even provided the bank’s MEPS code so you don’t have to go hunting for it

If you are wondering, yes there is a fee of RM3 if you withdraw amounts below RM400 but for RM400 and above withdrawal is free.

Also, do ensure that your name is correct and matches your bank account name and account number because there will be charges if the bank refuses to accept your payment – Paypal’s charges will be RM15 and who knows how much the banks will charge!

The upshot of this too is that you might now be able to fund your online or ebay purchases with your bank account instead of having to use a credit or debit card. Since there is now a RM50 service tax on credit cards, some people might be thinking of cutting up most of their cards.

I’ve done a test withdrawal with a small amount – I prefer to incur a small charge to see if it works well, rather than have RM400 floating in cyberspace somewhere! Will update on how it goes.

Sometimes financial advice are found in the most unexpected places and seem so obvious we wonder why we did not have the foresight to market it ourselves first!

I happened to pick up a magazine last weekend and came across this interesting financial management method using Jars. Read on below to learn how it helps you manage your money better!

JARS System From The Secrets From The Millionaire’s Mind

Basically, this simple method popularised by T. Harv Eker’s “The Secret’s of the Millionaire Mind” involves managing your money in a very visual and effective method. Based on this method, your monthly income should be split into 6 different jars:

1. Necessity Account (NEC) – for everyday expenses and bills including utilities, rental, loans, etc.
2. Financial Freedom Account (FFA) – for investments and passive stream incomes. Never dip into this jar and do not spend the principal!
3. Education Account (EDU) - for investment in yourself, purchase of books and education through seminars and talks.
4. Long Term Saving For Spending Account (LTSSA) - for nice to have purchases, e.g. a nice luxurious holiday or a luxury handbag or shoes.
5. Play Account (PLAY) - for purchases you don’t really need but would like to spend on.
6. Give Account (GIVE)  – for charity or foundations you subscribe to

The article I read recommended splitting 50% into your necessity account and the remaining 50% into equal portions into the other 5 jars. However, the percentage you put is entirely up to you. What is most important is that you make the effort to distribute your monthly income into the above categories.

Personally, I found it quite an interesting read and something worth exploring into as it definitely helps manage your money better and you will know exactly where all your money is going. If you’ve tried this method before, do share if it worked well for you!

Do you find yourself arguing more with your partner over money in this financial crisis? Even if you can both continue to meet your commitments and keep your jobs, the crisis has heightened people’s sensitivities about money and suddenly, you realise that perhaps your spouse’s financial goals and yours are not aligned at all!

If you find that your spouse is a spendthrift and you is a tightwad, don’t worry. Opposites attract and as much as the tightwad would hate to admit, they do admire the frivolousness of the spendthrift as much as the latter admires the former’s discipine to money. However, don’t let money stress affect your marriage. Instead, learn some good tips to manage money in your marriage below.

Create Financial Goals Together

It is one of the hardest thing to do but take some time to sit together when you are both in a good mood to discuss your financial goals. It isn’t easy especially if both have conflicting attitudes to money but try to keep an open and objective mind. Think of short term and long term goals from 1 to 10 years, taking into account any children or additional commitments you might have in the period of time.

Financial Aspects To Consider

When discussing your financial goals, think about whether you are both working, how much each other is making and how much will each of you contribute to the family spending. Be open about your long term plans, e.g. a wife who intends to quit when she has a child should discuss it with her husband to ensure he is prepared financially for it when the time comes.

Talk About Your Spending Habits

Tightwads hate spending a cent of their hard-earned money while spendthrifts don’t think twice about forking out the cash for something they like. It isn’t easy to understand what brings joy to your spouse if you don’t have similar spending behaviors but it helps to start talking about how you will approach joint financial decisions or large financial commitments such as a property or investments.

“I don’t care whether you’re thrifty or you’re silly with your money, or waste money, the important to thing is to get that out on the table right from the beginning,” said Jeff Yeager, author of “The Ultimate Cheapskate: Road Map to True Riches.” Yeager, who believes being a cheapskate is “a real virtue,” has been married to his wife, who shares his frugality, for 26 years. (link)

Talking about money is not an easy subject especially when it is with your spouse who might have a totally different view from you. Nevertheless, it is important to start these financial discussions, however painful they are, to ensure your marriage starts on the right foot financially.

Marriage is the start of a journey together not only as man and wife but a shared life in the form of joint expenses and joint financial decisions.

Money can be an extremely sensitive topic so how do you decide who should pay the bills and marriage expenses without starting World War 3 even before the wedding? Read on for some tips on how you can ease into married life finances!

Discuss Financial Expectations

We live in an equal world but sometimes when it concerns money, women still prefer for the man to be paying the bills. After all, the man’s historical role is to provide for his family. If you believe that to be so, be sure to discuss this expectation with your spouse as he may have been expecting you to contribute partially to the wedding or household expenses if you are also working.

Should You Have A Joint Bank Account?

A joint account is one where both parties can contribute and draw from. Having a joint account requires a high level of trust between husband and wife to ensure the money is not wrongly used by one party without the other’s knowledge. While marriages should always be built on trust, don’t fel obliged to have a joint account until you are both comfortable with the idea. Alternatively, maintain separate accounts but have a small joint account just for household expenses.

Don’t Control Finances

It is important to remember that you were both separate individuals with different spending habits before you got married. She may be used to buying designer handbags or going for weekend spas when she was single or he may have enjoyed going for golf games or spending on little gadgets. Whatever the indulgence, try not to immediately control your spouse’s spending habits if it is not similar to yours. Instead, talk about it and align your common financial goals but still maintain a percentage of your salary as separate “indulgence accounts” so each of you may spend without having the guilt factor!

So, do share.

Ladies, do you expect men to pay for everything or will you contribute if you are a working woman?

Men, will you expect your wife to contribute to some of the household expenses or will you be a man to shoulder all financial expenses? Men, will you mind if your wife wants to buy a branded handbag?

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The global financial crisis that sent the world economies into a downward spiral has almost been forgotten in the wake of the recent A(H1N1) flu virus sweeping across the world.

However, rich learnings have come out of that crisis and lest we forget, read below for the most important lessons from the financial crisis highlighted by billionaire Warren Buffet and Charlie Munger.

Important Lessons From The Financial Crisis By Warren Buffet

• Companies should borrow less.
• Banks should be performance driven by having severe disincentives for failures and proper incentives for success.
• Intense regulation may not always help as Fannie Mae and Freddie Mac were heavily regulated before their collapse.
• There should be reforms in the accounting profession to avoid the wrong message of high profits presented before a company collapses.
• People should leverage less and own less debt – that includes your credit card and loans.
• People should educate themselves to avoid buying financial instruments they do not understand.

Will these lessons help prevent another financial crisis in the future? Its hard to say, as long as human beings continue to be greedy in their pursuit of money.

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I received this email from a reader seeking for financial advice. In these current times of financial difficulties any form of savings, however little, is a great way to start. However, with interest rates at an all time low and threatening to dip further, a good investment vehicle to grow your funds in are currently a little hard to find.

As I am no financial expert, I would like to post this email here for any comments or financial advise from all of you out there!

I am a student myself, thus saving money is really difficult seeing that the economy doesn’t favour us to do so. Besides, I already have debts i.e. education loan which costs about RM22,000 in hand. The future scares me for not having a back-up plan never mind the fact that I am covered by insurance yet. Despite the fact that I have little knowledge in investment and financial plannings, I plan to throw in RM1000 from my meager savings in unit trust and start saving RM100 each month after that, for as long as I can.

Money from my scholarship will be coming in soon so, I need advice on how to save and grow them in small scale. What can I do with as little as RM300-RM500 monthly to spare in order to assure myself financially in the years to come (to buy my own car, support my parents, to splurge on personal wants etc).

What do you experienced adults suggest to a young adult with limited fund in planning his/her financial future?

Please feel free to drop your advice in my comments box below.

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For those who have just started working or are in the early years of their career, retirement is probably something very distant. However, it is never too early to start building your nest egg and working towards a successful retirement. Here are some tips on how you can start building your retirement funds early, especially if you are in your 20s or 30s.

Start Saving Your First Paycheck

Getting your first paycheck is a wonderful experience and it is only too easy to splurge it all on shopping, fine dining and travel. A recent article I read featured female shopaholics who spend an average of RM1,000 a month just on shopping! Shop and treat yourself, if you want to, but before you do that put aside just 10% of your pay into a savings account and increase that percentage over time as your salary grows. Don’t be like Becky Bloomwood in “Confessions of a Shopaholic”!

More retirement saving tips below.

Contribute Regularly To Your Pension Fund

In Malaysia, the EPF contribution rate was recently reduced to 8% from its previous 11%. If you can, don’t opt for the reduction in your EPF funds as it will form the bulk of your retirement nest egg 30 years down the road. If you can, look also for employers who pay more than the requisite 12% employer’s contribution into the fund. Some multinationals in the market pay up to 16% for each employee’s fund which is a substantial monthly contribution.

Start Investing Early

Being at the early stages of your life and career gives you the valuable gift of time. You have at least another 25 years to go before your retirement and hence, many good years of investing opportunities. So take advantage of the current economic downturn to identify undervalued stocks and investment opportunities to help you grow your retirement fund.

Pay Off Credit Card Debt

This is constantly repeated everywhere yet there are some who still do not pay off their credit cards and continue to max them out. It is expensive debt as the interest charges on them are high. Let us also not forget that it was ballooning debt that triggered the economic downturn. So, do not spend more than what you can afford and make it a habit to pay off your credit cards every month.

Start saving and investing wisely early and you will be glad for it in your retirement years!

In yet another move to help the public, the Government has called upon the Association of Banks to cut installment payments for their mortgage owners.

With the reduction, the association said all commercial banks had agreed to cut loan repayment amounts across the board and maintain the original repayment period. However, it said borrowers also had the option of maintaining their monthly instalment amounts and have a shorter repayment period. (source)

It sounds almost too good to be true so should you opt for reducing your loan repayments? Find out below.

Should You Reduce Your Loan Repayments?

This move to reduce housing loan repayments has been made possible only because of the reduction in the Overnight Policy Rate by Bank Negara on Tuesday. However, what will happen when the rate increases in the next few years and you have been making reduced payments on your loan? Your mortgage will naturally increase again with the rise of interest rates resulting in heftier monthly repayments or possibly a prolonged loan period. This is definitely not something you will want to experience as you should be looking at increasing your retirement funds as you move down your career path instead of increasing your liabilities.

Take Advantage of Reduced Interest Rates

If you can still afford it, do check with your bank or mortgage financier how you can maintain your monthly repayments. It works to your advantage as well if you have spare cash as putting in higher monthly repayments when interest rates are low will reduce your principal mortgage faster. Putting in large sums of savings into your loan account will also offset portions of your principal sum to reduce your future interest payments and shortern your loan tenure.

There money saving tips will help you towards your debt free target faster and within a shorter period! Someone once said that banks are always the first to remove the umbrella in times of heavy rain and hence, one should be careful of the umbrella offer in the first place.

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It is sometimes interesting to see how fast situations change. When oil was hitting over US$150 a barrel, the world economy braced itself for soaring inflation rates but with the crisis, inflation seems to be on a downward trend with the Government now telling restaurants to decrease their prices of Milo!

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad said that since Nestle (Malaysia) has lowered the price of Milo and Milo UHT promotion packs by between 6.4% and 8.6% from Feb 16, restaurant operators should follow suit. (source)

Do you think its a good move? Read below on how you can save on drinks outside instead!

Personally, I think this is a positive move as coffeeshops and restaurants everywhere tend to jack up their drinks prices, charging even up to RM2 or more for a cup of iced Milo! And since a tin of Milo does not cost all that much, imagine their profit margins on every cup of Milo sold!

Do you think coffeeshops and restaurants should reduce their Milo prices! Have your say below!

However, if you really want savings the next time you eat out, take advantage of these smart tips for saving on drinks outside!

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A recent survey by Citibank revealed some scary facts – That Malaysians do not save enough and many do not have enough to buffer them in the event of a job retrenchment!

According to the latest findings from Citi’s Financial Quotient (Fin-Q) 2008 survey, only two in five (39%) Malaysians actually save and less than one-in-three (28%) make and stick to a monthly budget.

In the event of a job loss but with continued regular expenses, one-in-five indicated their savings would last for only four weeks. On average, Malaysians reported having 11 weeks of savings in reserve. (source)

It is scary statistics indeed especially with job retrenchments looming and Asia set to lose 23 million jobs. So, beat the statistics with these great saving tips!

Set A Monthly Budget

Sit down and draw up a monthly budget. If you are married, sit with your spouse and discuss together how you should spend your monthly expenses. Planning is one, execution is another and you have to discipline yourselves to stick to your financial plans.

Pay Yourself First

Your budget should always include payment to yourself. It is a form of forced savings and a prudent target to begin with is at least 10% of your take-home salary. However, do try to increase this savings as your salary and expenditure adjusts.

Teach Children To Save

Start your children on the savings path from an early age with these tips to teach your children to save. Make it an enjoyable family event and you will have given them one of life’s best financial lessons.

Keep Going

Don’t give up on saving. Sometimes some months may be a little tight due to high insurance payments or unexpected events. Try to save whatever little you can and make up for it in the following months. Every little bit helps.

Spend Your Bonus Wisely

Bonuses now are far and few in between with many companies cutting costs and laying off staff. However, if you are lucky to get one, spend it wisely by saving and investing. Of course you should still reward yourself with a small portion of it but do save most of it to build up your emergency funds.

Previously, employees were advised to keep at least 3 months of their salary in cash to provide a sufficient buffer in the event of layoffs. Today, with inflation on the rise and the economic crisis, it will be wise to have at least 6 to 8 months buffer in cash to ensure you can ride out this storm.

Remember, it isn’t about how much you earn but how much you can save.