How financially secure do you think you are? Would your funds hold up if your career or life took an unexpected turn? What do you suppose will happen to the money you've earned and saved after you’re gone? These are huge questions, and most people won't be able to answer as soon as they'd like. It might help to think about some factors in your financial life.

Future planning for retirement

Are you saving approximately 15% of your income for retirement? That's a good target. You're probably already saving that much money each year without putting your lifestyle in jeopardy. Monthly EPF contributions, SOCSO and incremental salary deferrals into a workplace retirement plan will certainly get you there. Because those earnings are being invested as well as saved, they have the potential to grow tax-free – and if your employer is matching your contributions to your retirement account along the way, you have even more reason to smile.

Plan for emergencies

Do you have a stash of cash set up in case of an emergency? A solid emergency fund contains enough money worth six months of a person’s expenses. If you're the head of a family, your emergency fund should ideally be greater — enough to cover a year's worth of expenses. At first glance, accumulating such a large cash reserve may appear difficult, if not impossible – yet households have done it before, particularly those who have cleared or reduced debt. If you've completed it, pat yourself on the back knowing that you've prepared well for the unknown.

Insurance coverage  

Are you covered by insurance? Most Malaysians fail to fulfill their responsibilities of purchasing a life insurance policy as soon as they are able. This critical step in ensuring our loved ones' long-term survival is frequently ignored for a number of reasons. In 2017, just 12.6 million Malaysians were protected by life insurance plans, according to the Life Insurance Association of Malaysia (LIAM). Why? They simply cannot afford it. That is how it appears. In reality, life insurance is much cheaper now than it was decades ago. The majority of people believe it is three times as expensive as it actually is. How much money do you need? A handy tip is to invest ten times your income. Hopefully, you have enough, if not better, insurance coverage.

Determine your credit score meter

Do you have a credit score of 700 or higher? A FICO score of 685 is now considered average. If you fall below 650, your life may get more expensive. Hopefully, you pay your bills on time and without fail, and your credit score is in the 700s. Bank Negara Malaysia’s (BNM) Central Credit Reference Information System (CCRIS) generates credit reports for individuals. You may obtain your CCRIS report in person from any BNM service counter, or download it from the eCCRIS portal.

Recognize and manage your finance

Are you worth far more than what you owe? You want to pay off your major debts and have enough money to last a lifetime. You'll almost certainly always have some debt, and you can't rule out concerns about your net worth tomorrow – but if your financial situation is improving and your bottom line shows it, you're making progress toward financial independence.

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