A lot of money advice sucks, not because it’s wrong, but because it’s impractical.
Maybe it’s because people who’re good at math/finance tend to not be great with people. So we can understand how compounding interest across decades is an unstoppable force, but struggle to persuade a fresh graduate to save a hundred bucks.
Personal finance is also highly contextual: a poor student has very different needs (and goals) than a middle-class mother of two. This makes it all very confusing. It’s near impossible to give one-size-fits-all advice.
This doesn’t stop people from trying though. Here are some examples:
1. Monitor your spending, then stop buying unnecessary s***
Figuring out what you’re spending on, then reducing unimportant expenses is sound advice. In the corporate world, companies hire teams of people to do this. So you know it’s the right thing.
But correct doesn’t mean easy.
On the scale of 1-10 of money geekiness (1 being “So confusing, I’ll just let my father figure it out” 🤷 and 10 being “Warren Buffett is my idol”), I’m probably a 9. Even then, I struggled with tracking my expenses. It was such a chore to write down every expense; not to mention I was scared of what my friends would think.
The other difficult part is removing unnecessary s***.
Because we’re all different, what’s “unnecessary” for one person is another person’s must-have. My wife saves money on groceries but loves her lattes. Nothing wrong with that. I drive an old second-hand car, but dream about Rolexes. Nothing wrong with that either.
The key is to remember people aren’t robots. We’re not 100% rational — making decisions based on spreadsheets and algorithms. Instead, we want things that don’t make financial sense. We get tired, moody and impulsive.
“Ditch the lattes” is noob advice.
2. Save & invest 20% of your income
Saving money is like eating your fruits and veges. Everyone knows you should do it, but many struggle.
One big reason: It’s hard to save money when you’re not making enough money. Sure, you could try to cut your expenses (Point 1), but there comes a point where you can’t practically cut any more.
This is especially true for people with low-income jobs, fresh graduates and the hardcore poor. Most personal finance advice is actually written for the middle class. If you’re not in that group, or near it, financial benchmarks can seem like a faraway fantasy.
It can also be depressing when you compare yourself to others:
“I’m struggling to save even 6% of my RM 3,000 salary, while that famous FIRE guru is saving 60%. I’m a failureee…”
3. Do your own research
For most of my adult life, I’ve been a DIY investor. I prided myself on reading lots of articles, fund fact sheets and prospectuses. (Yes that’s a word.) I thought I could pick the best funds and monitor everything on my own.
However, as I’ve gotten older with more responsibilities, I simply don’t have time anymore. Not only that, despite my best efforts, my track record of picking unit trusts has been abysmal. I recently sold a bunch that had given me just ~2% returns a year.
Lesson learned: I’ve greatly underestimated how much time and mental energy you need to manage a complex portfolio.
What would you rather do at the end of a long work day? Review your investment portfolio, or eat ice cream with your family?
I don’t mean to oversimplify and say you should 100% follow your most basic desires. Yes, often the “right” things to do aren’t comfortable. I’m just saying, for something to be sustainable — whether it’s money management, investments, or your side hustle — it’s gotta be practical. It’s gotta suit your lifestyle.
Here are some practical ways to get better with money:
Getting better with money, in a reasonable way
1. Use money to buy happiness
Stop judging yourself for buying stuff you like. Go ahead. Indulge yourself.
How to do it in a responsible way?
Instead of making your monthly budget all about restrictions, set aside money to “blow” every month. After you save money, remember to spend some fun money. Might seem like wasteful spending, but it’s actually going to make you happier, and more likely you’ll stick to your budget.
The exact amount depends on your unique situation, but Internet consensus says fun money should be somewhere between 10-30% of your monthly salary.
Once you’ve determined the amount, force yourself to spend it. Plan a trip. Buy a latte tower if you want. Even if you’re unwilling to blow it on yourself, you can always buy something to make your wife/husband/parents/kids/friends smile.
What good is all the savings in the world if it doesn’t make you or your loved ones happier?
2. Let your interests guide you
Going back to my earlier story about struggling to track my expenses. What really saved me was money tracking apps. It’s become like a game now — it’s fun, so I automatically do it. I now have a detailed record of my spending from the last five years.
Earlier in my journey, I was fascinated with “hacking” things like credit card benefits and loyalty points to save money. So I dived in and became good at it. Today, I’m interested in investing, mainly crypto. I wouldn’t claim I’m great, but at least I’m doing much better than my horrific unit trust picks.
Meanwhile, I switched my career into crypto several years ago, so my primary income comes from there too. (Yes, I know I’m blessed to work full time in something I’m passionate about.)
The point here isn’t that I’m smart or successful. The point is you’re likelier to be good at something you’re interested in. You’ll be much more motivated to learn, and resilient even when things get tough. This is as true in careers as it is in personal finance and learning.
Too much is focused on the negative “Don’t do this, don’t buy that” aspects of money. Let’s flip the narrative. Personal finance should be fun. Positive. If there’s just one thing that interests you about money today, don’t stress the ten other angles that bore you.
Explore the topic you like first, and build from there. If you haven’t found that yet, keep exploring. There are so many angles to personal finance, so many different sources of content, and so many interesting personalities to follow nowadays.
You’re bound to discover something you like.
3. Automate everything
What about the money stuff that’s important but you don’t like?
We’re all overworked; it’s hard enough to make time for things you love. There’s no practical way you’ll consistently do stuff you dislike. Maybe you find investing as scary as a trip to the dentist. Fine, instead of anxiously staring at your bank account every month, set up a sensible plan that auto-invests your salary.
Get through the pain once, then forget about it. Wake up one day 10 years later and have a wonderful surprise when you see how much your investments have grown.
Fortunately, there’s an app for almost everything nowadays. It’s easier and cheaper than ever to use technology to help. Some of my favorites are Monefy for expense tracking, and StashAway and Akru for robo-advisor investing.
Another personal story: I talk about investing a lot. But you know which investment dominates my portfolio? My EPF retirement funds. Yeah, investments that I’ve never touched. I still remember checking my EPF statement at the beginning of my career — lamenting it contained so little. Fast forward 14 years, and the magic of compounding has made it the largest portion of my investment portfolio.
All my energy and effort over the years thinking about investing, and something automated beats it all.
4. Accumulate small wins (so it’s not intimidating)
Learning things you’re interested in is a good motivator. Winning is an even greater one.
It’s one thing to visualize saving three months of expenses. It’s another to actually see that amount in your bank balance. The feeling of financial security is priceless.
Use goals and systems to help. Goals are to set direction — where you want to go. Systems are the practical routines to get there.
For example, let’s consider the standard “20% for savings and investments” target. This might sound crazy, if you’re struggling to save even 5%. “Why even bother anymore? I’m never getting out of this mess.” That’s what unrealistic goals do — they kill motivation.
Instead, start with a smaller goal: Increase savings by just 2%. Use a system to get there: Set monthly deductions in your bank account, and spend one hour daily on a side hustle.
The important thing here isn’t the exact amount. The important thing is improvement. Growth. Every small win gives you strength to tackle a bigger challenge tomorrow.
5. Prioritize the big things
Your biggest expenses are likely housing, transportation and food. If you keep these under control, you should be okay.
What does “under control” mean? My favorite budget — especially for beginners — is the 50-30-20 budget. 50% of your salary for needs (e.g. rent, groceries), 30% for wants (e.g. eating out, hobbies), and 20% for savings and investments. Something like this is elegant: it’s easy to remember, and practical for most middle-class people.
Are there more theoretically-sound ways? Sure. Maybe a rigorous peer-reviewed paper will come out tomorrow saying the 42.0-28.1-23.0-6.9 budget is actually the optimal way to manage your money. But who’d be able to remember a budgeting system like that?
Instead of getting caught up in too much detail, most people would do better focusing on the three main priorities. Then carrying on with their merry lives. Again, as true in personal finance as it is in work.
Once you get past a certain level, paying an extra RM 1 for a toll gate, RM 10 for a nice drink or even RM 100 for a nice donation won’t make a difference.
Don’t sweat the small stuff.
6. Keep learning, keep growing
No, there’s no end state where you can claim to be the master of all things money. Rather, things change. You have to continue growing over the years.
Reflection helps: Looking at data on how you’re doing, adjusting your routine, then seeing how the changes affect your life. A continuous feedback loop of getting better and better.
You can think about this in two ways: Maybe it’s depressing to think we’re on a constant treadmill; that the goalposts are constantly shifting, and you’ll never end up in the winner’s circle.
On the other hand, if you look at life as an endless journey of growth, it can be one of the most motivating things ever. There’s no need to feel bad if you suck at certain money things. No need to be jealous of your classmate and his shiny new car. No more pressure to be perfect at money, or have it all figured out before you’re 35.
It’s adventure. It’s freedom.