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Uncertain economic environment is expected to persist for some time. How will
the bitter medicine affect the man in the street?
Heavy duties slapped on imported luxury motor vehicles - people who have been contemplating
a new imported vehicle will need to rethink. Not only do they have to contend with
higher costs, they require more financing. A locally produced car would be the logical
choice now.
Import duties in some consumer durables up 5% to 30%. Again the effect of currency
and tax should induce the public to buy local.
Tax relief for child studying abroad withdrawn - Parents who are supporting their
children's education abroad will have to keep up with the higher costs involved due
to the weaker Ringgit against most major foreign currencies and the withdrawal of
tax relief for parents of children studying abroad. Parents who have budgeted a fixed
amount to send to their children will have to reduce expenditure from some where
to meet the extra costs.
At time of writing, the Ringgit has shed more than 30 percent of its value since
the start of the "tequila" crisis triggered somewhere in the middle of
the year.
Increase in travel document fees - travelers who frequently visit foreign countries
will also have to think twice now. Less overseas trips and travel locally, maybe
even reduction in number of holidays.
For those planning to buy a home PC - a little incentive to you comes in the form
of RM400 tax rebate for each family every five years. For those with extra money
and have been pondering the issue "to buy or not to buy a PC" - now is
your chance. Not only do you get a rebate - you can now join the race for technology
with the rest of the world.
In the short-term, stocks and property are not likely to glitter due to economic
concerns . Until the economy stabilizes, sentiment will be weak. Investors are not
likely to make all the money they used to make - people will likely spend less as
they will have less wealth. In fact, the tumbling local stockmaket over the past
few months has taken its tolls on many who were heavily involved.
Although the budget is generally perceived as a "painless" one, people
should prepare and cut spending and increase savings. Prudent money management should
be adopted in anticipating rocky times ahead. Prepare a budget for yourself - list
down all your income sources and your expenses. Analyze your expenses and see where
you can cut down. Take a slice of money from your paycheck and put the extra money
away. Set aside your extras such as bonus or income from your part-time jobs. Save
all you can get - nothing is too small to save - as the saying goes "little
drops of water make a mighty ocean".
The more you earn, the more you should set aside. If you do not have the discipline
to save, open a separate savings account and transfer a fixed amount of money into
the account on a regular basis.
Reduce the number of credit cards you have. Most Malaysians tend to have more than
one credit card particularly younger people. Cut down your spending habits. Before
you buy anything, ask yourself - "do I really need this?" "Can I survive
without it?" Quite often you spend for the sake of spending. How many times
have you bought something only to find it again months later in your cupboard still
unused and probably won't be used at all.
For people who have been living comfortably over the past few years spending lavishly
on branded items, consider local products. They could be just as good if not better.
With the economy at the crossroads, it is important for us to be prudent with our
hard-earned money. Prepare enough cushions around you so that when you do fall it
will be a soft landing.
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