Tax Yourself

When it comes to personal finance, one of the most basic (yet overlooked) rules of saving is the pay yourself rule.

I asked the question "What is the best way to start saving for those who don't have the habit of saving?"

The answer that stood out the most was the pay yourself first rule.

Made popular by the book, The Richest Man in Babylon, the rule simply means that whatever income you make - take 10% of it and park it in a separate account as a tax for your future self.

I would make it easier for my Malaysian brothers and sisters.

When you login into your online banking account, take 10% of your credit ledger (could be your salary, or the money you made by selling your used books, or freelance gigs)... And instant transfer it to another bank account.

Instant transfers are now free in Malaysia. So, go ahead and do it.

The trick is to do it in a such a way that you forgot that you did it in the first place.

That way, your mind thinks that you only have the actual amount left in your current bank account.

Go ahead, give it a try. Even if you sold your books for RM121.30, just transfet RM12 to your other account today.

Sounds small, but you would be surprised by how much you save by the end of the year.