Personal Finance 101: No rate increase means no cold sweat?
Every time interest rate does up by 1%, many are worried
Two calculations below. One with 4.25% interest, the other with 5.25%. Everything else stays the same.
We can see if the interest rate goes up by 1%, the increase in the monthly mortgage amount is RM283. This can be a big sum for anyone who’s at their ceiling limit every month when it comes to expenses and mortgage payments. What about you? Are you worried or it’s okay. RM283 is not that much. If you are worried, then can stop worrying for now because it seems like the interest will not be rising anytime soon.
Some latest headlines about Overnight Policy Rate (OPR) in Malaysia
Earn More or Spend Less. Period.
Worried or not worried, we have to manage all these uncertainties which are out of our influence. Within our influence would be to earn more or to spend less. Earning more can be via a higher paying job. Of course our skills have to be improved as well. Spending less meanwhile can be done via eating cheaper every day. It could be buying a cheaper shoe brand. It could also be buying a lower priced watch. It could also be to stay at 3-star hotels versus 5-star ones and more.
Remember the difference of RM283 per month above? That’s just RM9.50 per day. Just reducing the total food expenses could already be enough. Else, RM283 x 12 months is RM3,396. Just choosing to holiday in a cheaper country versus a further and more expensive one would have allowed us to save RM3,396 per year too. It’s a choice for many people. Question is always what are we going to do about it? Happy deciding.
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