5 Smart Financial Tips for Those Who’ve Just Started Working

Many students can’t wait to graduate from college or university and enter the working force. They see this as the moment they can earn their own money and start living on their own terms. Although this is a good life goal to have, in reality, the road to financial freedom isn’t normally an easy one. This rings particularly true for the first few years of employment. 

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First of all, the hunt for a job doesn’t come as easy as most expect it to be. A 2016 report estimated that there were around 200,000 unemployed graduates in Malaysia. Worse, this number does not include those who have just completed their diplomas, certificate programmes, and Sijil Pelajaran Malaysia (SPM).

The problem doesn’t seem to stop once these graduates manage to secure a job either. Failure to plan finances properly during the early years of employment has caused Malaysia’s youth to form the biggest group of bankrupts in the country. In fact, according to the Insolvency Department, 60% of bankruptcy cases involved those aged between 25 and 44. But hey, don’t stress out too much over these stats. Instead, keep calm and follow our 5 important financial tips for those who have just started working.

1. Start setting financial goals

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Just like you set up KRAs in your job, apply the same rule while setting your financial goals — because only if you have clear plans in place you will be able to achieve them.

We agree that you might not have complete clarity on all your financial objectives if you’ve just started working, but you’ll be well-advised to at least start the process and get into the habit of planning and goal setting.

Begin with short-term goals like building an emergency fund, or boosting your savings for a big ticket purchase or a vacation, chalk them down and set a target. For example, set a goal to save up RM1000 in 12 months (apart from your basic savings or emergency fund) which you may want to invest in a fixed deposit.

Also remember, financial planning is an integral part of the goal-setting process, and it all starts with how well you understand your monthly spending patterns. Start with jotting down all your expenses so that you’re able to identify wasteful or excess spends. Because only when you control these wasteful or excess spends you’ll be able to allocate money for your savings and other financial goals. You can take help of any online budgeting calculator as well.

2. Start building an emergency fund

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Last year, Bank Negara made the shocking revelation that three out of four Malaysians found it difficult to raise even RM1,000 during an emergency. Furthermore, they also revealed that only 18% of people in the country could survive for up to three months if they lost their main source of income.

This is why it is imperative that you start allocating a portion of your salary into an emergency savings fund as soon as possible to. Not only will the emergency fund consolidate your finances, it will come to your rescue when you face any unanticipated event that may drain your finances dry or bury you in debt. You will also not have to depend on your family members or friends to bail you out of a sudden situation.

You can set the savings bar as high as your budget permits, but it would be wise to place the minimum number at 10% of your income. Ideally, your emergency savings fund should at least consist of three to six months of your total monthly expenses. 

Also, keep your emergency fund accessible at all times by parking it in a normal savings account. For a more detailed guide on how to build one, check out our blog post here.

3. Control your spending and try to resist lifestyle inflation

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Lifestyle inflation occurs when your spending increases as your income grows. Even if it is your first job and paycheck, it means that you are earning more money compared to your student life. With extra cash now available, you start to spend it on unnecessary lifestyle expenses. Although they may seem minor spends, they all add up to a huge chunk over time.

One of the best ways to control your spending is by maintaining your student lifestyle as long as possible. Resist the temptation to live in expensive areas, frequently eat at fancy places, or own stuff that you previously couldn’t afford.

It’s understandable that you will once in a while give in to certain temptations, and that’s fine. But the key is to moderate them as much as possible. So even when you decide to finally leave behind that student lifestyle, let the financial transformation be gradual. 

It is best to keep your budget aligned to the classic 50/30/20 method:
50% of your income for funding necessities going towards living expenses and essentials (rent, utilities, food, transportation, etc.).
30% of your income for flexible spending (things you want but don’t necessarily need such as going to a movie or travelling).
20% of your income to fund your financial goals (savings, investments, debt repayment, etc.).

4. Get rid of debt

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If you’ve only recently started working, it’s highly likely that your source of debt will be limited to a student loan. Even if the loan has a low-interest rate, such as the PTPTN, it would be wise to pay it off as quickly as possible.

Make sure any new loans or bills are paid on time and cut out any that you can do without. Missing any payments will usually result in penalties and extra interests and that takes away money that could have been spent elsewhere. 

5. Learn to invest

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Renowned financial author Robert Kiyosaki once said: “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for”.
His quote was used to describe investing and that is something everyone should start doing. 

Other than putting aside some money in the Private Retirement Scheme, you can also consider investing in fixed deposits (low risk), unit trusts like ASB, mutual funds (low to medium risks), property (medium risks), and blue-chip stocks (high risks). Going forward you’ll realise that you must gradually aim to diversify your investments to grow your money minimising the combined risks.

However, before making any investment, be sure that you’ve made ample research and fully understand the risks involved, growth history, fees and charges, and other factors of your chosen investment instruments.

.: Peace Out :.


  1. For sure there are a lot of traps and temptations once you start working, thinking that you have a lot at your disposal to enjoy life after struggling for such a long time being tortured by books. LOL

    1. Yeah~ I think it's better to make ourselves busy with work in order to keep away from the temptations! :D

  2. After getting their first pay checks they must refrain from debt traps in the forms of credit card and installment plans for snazzy iphone etc. :p

    1. I guess it's alright to spend some of the income for entertainment here and there since work life can be quite stressful for some. Definitely need to have a savings plan and always learn to only spend what we have by not to burden ourselves with credit card debts! Haha...

  3. Replies
    1. That's good... I think debt free is quite hard to do but it can happen for those who settle it accordingly


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