money management and financial planning assoc. prof. dr. nik maheran nik muhammad (cfp, citm, ibbm)...

MONEY MANAGEMENTAND

FINANCIAL PLANNING

ASSOC. PROF. DR. NIK MAHERAN NIK MUHAMMAD (CFP, CITM, IBBM)

Faculty Business Management

UiTM Kelantan

WHAT IS MONEY TO YOU? Social status? Opportunity? Security? Accomplishment? Stress? Peace of mind?

MONEY MANAGEMENT What are your goal in life? How you should pursue them? What type of account should you used? What are the type implication? What should you be doing now in order to

continue supporting love ones after you are gone?

MONEY MANAGEMENT Strategic vision of your household

financial situation Goal Time frame Budgeting

Keeping track of your spending Build financial discipline

Money Management

Saving InvestingInvestingSpending

LifestyleNecessary

Contingency Protection

RetirementRetirement Extra incomeExtra income

ZAKATTAX

FINANCIAL PLANNING

financial planning is the process of meeting your life goals through the proper management of your finances.

Life goals can include buying a home, saving for your child's education or planning for retirement.

Financial Planning Process1. Identifying and setting short, intermediate and long-

term goals. Ideally, each goal will have a date and dollar amount attached to it. 

2. Evaluating your current situation – cash flow analysis and calculating your net worth. You need to honestly assess your current financial status, including positives and negatives. 

Financial Planning Process…cont

3. Review your insurance coverage, including life, disability, home, auto, umbrella liability and long-term care. 

4. If you have children, develop a college funding plan to help cover higher education expenses.

Financial Planning Process…cont4. Review your current tax situation to identify

tax-saving opportunities and potential deductions durable power of attorney are up-to-date and valid. 

5. Develop a retirement funding plan that covers when you plan to retire and how much you will need to support your retirement lifestyle.

Financial Planning Process…cont

6. Develop an overall investment plan with proper investment portfolio that supports your goals, while staying within your investment time horizon and risk tolerance.

CASHFLOW PLANNING Spending pattern Budgeting

Asset accumulation Borrowings/liabilities Net worth

BUDGETING WORKSHEET Household spending

Mortgage/rent Insurance Transportation Groceries Food at work Work supplies Education Phone/utilies Debt repayment Medical Clothing Hobies/leisure Books Others

Take home pay_____

Spending total______ Do you have EXTRA or

DISAVING??

WHERE TO KEEP YOUR EXTRA MONEY??

Emergency saving account Do your best to forget the account exist !!

Interest earnings or investment earning??

NET WORTHASSETS Liquid Asset Lifestyle Asset Investment Asset

LIABILITIES Current Liability Non-current Liability

IS YOUR ASSETS MORE THAN LIABILITIES?????

BORROWINGS Good borrowings

Borrowing to achieve some goals can actually be smart investment in a household long term future

Bad/dangerous borrowings You’re using cash advance from one credit card to make a minimum

monthly payment on another credit card

You can’t afford to make all of your minimum payments every month

You’re forced to skip payments on routine household expenses in order to make you debt payment

Your application for new credit are rejected

Creditors are calling you to arrange payment of outstanding bills.

INVESTMENT PLANNING For education/career advancement For retirement For protection For contingency For leisure spending/extra income

INVESTING INSIGHT Intension of seeing it ‘grow’ overtime

Property Gold Unit trust Insurance Investment link Money market Bond Stock

FINANCIAL PLANNING AND LIFE CYCLE STRATEGIESThe amount of money to be invested in various assets depends on:

Your goals and needs – to buy a house, travel or retirement needs, education, children etc.

Your age at the time of investment – this will decide how much risk you can take. For instance, if you are young, you can invest in relatively riskier investments

Your income at the time of investment – if you earn more, you will have more money to invest. The level of wealth will also influence the types investments you can hold

FINANCIAL PLANNING AND LIFE CYCLE STRATEGIES…cont Your occupation – if your job provides retirement plans,

you may not want to have a separate retirement plan

Time horizon – when do you want to sell your assets?

Liquidity – how fast can you convert your assets into cash?

Tolerance for risk – how much risk are you willing to take?

RISK MANAGEMENT AND INSURANCE PLANNING

Premature death – life insurance Health and disability Children education Property insurance Retirement

TAX PLANNING Minimizing your tax payment prudently

Join/separate assessment Relief Rebate Zakat/fitrah

RETIREMENT PLANNING

How much income should you plan on needing when you retire? A financial planning rule of thumb is to figure on needing 70% to 80% of your pre-retirement income. That income is the income you'll be earning at the time you retire, not the amount you're earning now. 

ESTATE PLANNING Will Hibah Wakaf/contribution to charitable

organization Trust and custodial account Naming and updating beneficiaries

CONCLUSION We need a LIFE BALANCE

Monetary return Mentally return Spiritual return

THANK YOU

Open for discussion

ABOUT THE SPEAKERAssoc. Prof. Dr. Nik Maheran is a Certified FinancialPlanner and Chartered Institute of Taxation Malaysia Associate member. She is currently a lecturer at UiTMKelantan teaching financial planning, Investment analysisand various finance subject. Prior to joining UiTM, she was a remisier at KLSE and later joined Inland Revenue Boardof Malaysia in 1995 as tax assessment officer.

She has conducted more than 50 training and consultancies in the area of financial planning, investment planning, Leadership, decision making and Image building for many private and public organizations.