Last Updated on March 22, 2023 by Chin Yi Xuan

The new year is here and it is helpful for us to take this opportunity to plan our finances for 2023.

That said, how does one review and plan his/her finances? While there is no one standard approach, I’ve designed a review routine that is easy to follow.

In this post, I’d like to share the 8 steps that I follow to review my finances and prepare for the new year. I will also introduce how the sponsor of this post, KDI can help in streamlining our savings and investing routine.

I encourage you to spare some time over the weekend, go through the action steps and get a clearer direction of your finances for the new year!

OK, let’s get started!


Part 1: Find out where I am now:

Step 1: Calculate my net worth

I’ll begin this step by calculating the value of assets that I own. Assets are things you owned that can be converted into money.

  • Examples of assets: Cash, investment properties, stocks, savings, EPF & PRS (or retirement fund equivalents).

Next, I find out how much is my liabilities. Liabilities are usually your financial commitments and debts.

  • Examples of liabilities: Mortgages, car loans, and any other form of debts.

With the value of my assets and liabilities available now, I can calculate my net worth:

  • My net worth = Total value of assets – Total liabilities

[Action Plan]

Find out the value of assets & liabilities that you own. Then, calculate your net worth by taking the difference between assets and liabilities.

KDI Content 2 Infograph pg2

Step 2: Find out my expenses & commitments

The previous year was a busy year for me. With so many things going on in life, it is inevitable that there might be new expenses/commitments that popped up throughout the year.

Hence, it is helpful to update how much, in average, am I spending every month.

To make things easier, I break down my expenses into 11 key categories:

  1. Food
  2. Groceries
  3. Insurance
  4. Travel (Petrol, Toll, Parking, Maintenance)
  5. Family
  6. Utilities (Phone bill, internet, electricity & water bill)
  7. Rent/Mortgage/Loans
  8. Entertainment (eg. Sports, Netflix, or Spotify subscription)
  9. Education
  10. Personal Care
  11. Others

[Action Plan]

List down the expenses & commitments that you have right now. Don’t worry if you do not have a record – an estimation is usually good enough.

Step 3: Figure out my overall cashflow:

Cashflow is what you have left after deducting your income from your expenses, and how much you need to save and/or invest:

  • Cashflow = Earnings (Salary or Income) – Savings & Investing Routine – Monthly expenses & commitments

Positive cashflow indicates that you have a surplus after taking into account of your commitments.

Meanwhile, a negative cashflow means that your income is not enough to sustain your current commitments.

[Action plan]

Find out your current cashflow condition.

If you encounter negative cashflow, try accommodating by adjusting your budget or seek to increase your income. Follow Part 2 as a guide.

Part 2: Adjustment & Action Plan + Questions to ask

After identifying the figures in the previous sections, I proceed to see if there are any adjustments required for 5 key aspects of my finances.

These 5 aspects are:

  • Budget & Expenses
  • Savings & Emergency Funds
  • Insurance Coverage
  • Investment
  • Estate Planning (will-writing)

As we go through the steps, I’ll guide you with several key questions so you can best reflect on your finances:

Step 4: Budget & Expenses

As we grow older, our life circumstances and priorities may change. Hence, it is helpful to explore if there is a need to adjust our budget for the new year.

Questions to ask:

Are there any changes to my daily/monthly spending this year? (Tips: Consider the impact of inflation on your everyday groceries.)

Are there any new priorities in the coming year? (Getting married? Starting a family? Taking a loan?)

Are there any unnecessary expenses & financial commitments that can be reduced/removed? (eg. Youtube or Spotify Premium)

Personal examples:

  • Utilities: For the past 3 years during the lockdown, I’ve been using a 1GB data plan – now I require a larger data plan as I am going out more often.
  • Health: This year, I am getting a 1-on-1 personal trainer to guide me in my workout. As a result, I have to adjust my budget to accommodate to the increase in expenses.
  • Traveling cost: With the reopening, I am out more often. This also means an increase in money spent on petrol/toll/parking fees.

[Action Plan & Reference]

Update/adjust your budget according to your lifestyle and/or income changes.

Meanwhile, consider using the 50/30/20 budget rule as a reference while building your budget. (50% on Needs, 30% on expenses, 20% on savings & investing)

Lastly, consider building a habit of tracking your key expenses in the new year. My go-to expenses tracking & budgeting app is MoneyLover, which I’ve been using for many years.

Consider using the 50/30/20 Budgeting Rule while designing your budget. (Image source: Kenanga Digital Investing Blog)

RELATED: The 50/30/20 budgeting rule from Kenanga Digital Investing (KDI) blogpost

Step 5: Savings & Emergency Fund

Having a healthy amount of savings and an emergency fund in place is a crucial part of personal finance.

In my financial review, I want to see if I have enough liquidity – ie. Cash (or savings products that can be turned into cash quickly should I need them).

Questions to ask:

Do I have enough savings & emergency fund in place?

How I approach my emergency fund & savings:

  • Emergency Fund: Ideally 6 months of monthly expenses (or more). (ie. 6 x Monthly Expenses)
  • Savings: Additional cash put aside for different purposes/expenses outside of my monthly commitments. (Holiday, Presents for family & friends, Down payment for future home/car, Education/books/courses)

[Action Plan & Reference]

If you are starting from nothing, focus on building your 6-month emergency fund first. Then, consider allocating extra savings for different purposes in life. Ideally, I’d like to keep my savings rate at about 20% of my income (or more).

KDI Save on everyday personal finance

Best place to save your emergency fund: Get 3.50% Effective Annual Rate (EAR)* with KDI Save! (*T&C applies)

When it comes to my savings and emergency fund, my preference goes to low-risk cash management funds such as KDI Save from Kenanga.

KDI Save Highlights
KDI Save offers a flexible option to save your money at a highly competitive rate. (Image source: Kenanga Digital Investing)

Why so? This is because:

  • Flexible: Unlike FD, there is no lock-in period for KDI Save. This means I can deposit & withdraw my funds anytime without penalties.
  • Attractive returns: KDI Save offers a fixed 3.50% Effective Annual Rate (EAR)*. This is on par with most FD offerings, yet without the restrictive lock-in period. [*T&C applies]
  • Free: KDI Save is FREE to use. This means zero management fees and no hidden expense ratio fees for KDI Save.
  • Fast withdrawal: Withdrawals from KDI Save will be reflected in your bank account within 1 – 2 working days.

KDI Save 3.5% EAR rate

RELATED: My KDI Save Review!

Step 6: Insurance 

Our requirement for insurance changes with life circumstances, so we need to constantly review our insurance coverage.

Questions to ask:

How much is my insurance coverage?

Is my insurance coverage sufficient?

Am I paying too much for my insurance plans?

3 key types of insurance plans + things to consider:

  • #1 Life insurance

Life insurance usually pays a lump sum of money to your beneficiaries when you pass away.

It is especially important if you have dependants in life that could not sustain themselves.

Considerations: Are you anticipating any changes in life circumstances? Consider getting/increasing your life insurance coverage especially when you have dependents/start your own family.

  • #2 Medical insurance 

Medical insurance (or medical card) usually covers the cost if you are hospitalized. 

Considerations: How long have you been holding your medical card? Is your coverage enough to cover the rising medical cost? Consider reviewing your medical card coverage on a routine basis as medical costs tend to increase with time.

  • #3 Critical illness coverage

Critical illness coverage usually helps in supplementing your income, should you encounter illnesses such as cancer and loses your ability to earn an income during recovery.

It is crucial to have critical illness coverage that is on par with your expenses. Personally, my benchmark for critical illness coverage is about 3 – 5 years of my yearly expenses.

Considerations: Have your life expenses increased over the years? If yes, consider increasing your critical illness coverage accordingly. (Ideally, 3 to 5 years of your yearly expenses)

[Action Plan & Reference]

Insurance terms and products can be overwhelming to deal with. I’d recommend getting help from a licensed financial planner to review your policies. As a benchmark, I suggest keeping your monthly insurance payment at <15% of your income.

RELATED: My experience with a licensed financial planner in Malaysia

Step 7: Investment review

Investment review is an important step in my annual financial review & planning.

Investing ensures that my hard-earned money works for me while I am focusing on my everyday life.

Questions to ask:

Am I investing consistently?

How much am I investing? If I am going to have a pay raise in the new year, should I contribute more to my portfolio?

How I invest:

Personally, I suggest treating investment as a routine.

By investing regularly (a.k.a. ‘Dollar-Cost Average) every month, I adopt a passive, long-term buy & hold strategy that allows me to focus on other important priorities in life.

Want to know why investing on a regular basis work in the long run instead of timing the market? Check out this blogpost from KDI for more info!

KDI Invest DCA vs Timing the market
Investing regularly vs timing the market – which one is better? (Image source: Kenanga Digital Investing blog)

[Action Plan & Reference]

Consider setting an amount aside for your monthly investing routine. Ideally, you’d want to invest at least 10% of your income (but feel free to adjust according to your own circumstance!).

Where and how to invest?

It is very easy to get started with investing, even if you are totally new to investing.

Consider checking out KDI Invest, a 100% AI-powered robo-advisor from Kenanga that manages your investments on your behalf while you can focus on important priorities in life.

Why KDI Invest?

  • 100% AI-Powered: KDI Invest is a 100% AI-powered robo-advisor that manages investments & risk on behalf of users. As such, there are zero human emotions (eg. fear, doubt) involved as all decisions are made based on pre-determined rules.
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  • Low barrier of entry: Start investing with KDI Invest with just RM250 (and RM100 for subsequent deposits).
  • Regulated: Kenanga Digital Investing (KDI) is a financial initiative from Kenanga Investment Bank. It is regulated by the Securities Commission Malaysia (SC). This means KDI has to adhere to the best practices set by the local authority.
KDI Invest AI model
KDI Invest AI model adapts to market risks & volatility by rebalancing users’ portfolio. (Source: KDI)

RELATED: Check out my real-life review on KDI Invest HERE.

Step 8: Estate Planning (Will-writing)

Estate planning such as will-writing is an important financial planning process.

Essentially, through a will, you get to legally appoint someone as an executor of your will to ensure that your assets go to the appropriate people when you pass away. Writing a will is especially important once you start your own family and/or own assets.

Questions to ask:

What would happen to all the assets (eg. stocks, properties) that I own if something were to happen to me?

[Action Plan]

Consider planning for your own will, especially when you begin to accumulate assets (eg. stocks, properties, cars).

RELATED: My will-writing experience – Writing my will at 28!

Other questions to consider:

Am I anticipating any additional changes in income and/or expenses in the new year?

Should I consider a side hustle? Am I expecting a salary increment?

Any new expenses coming up in the new year? (eg. Wedding preparation, family expenses)

Should I allocate some cash to travel, now that the world is reopening?

The best financial app to manage your savings & investments: Kenanga Digital Investing (KDI)

This post is sponsored by Kenanga Digital Investing (KDI).

Kenanga Digital Investing (KDI) is a powerful financial app built with both savings and investment features in mind.

  • KDI Invest is a 100% AI-powered robo-advisor that manages investments & risk on behalf of users. As such, there are zero human emotions (eg. fear, doubt) involved as all decisions are made based on pre-determined rules.
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Now, with the KDI app, you can streamline your savings and investment routine in one single app – making your financial routine super easy to manage in the new year!

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No Money Lah’s Verdict

So, there you have it: my 8-step routine to review and plan for my finances!

I hope this guide has been helpful in giving you a big-picture view of your finances, and a direction as we step into the new year.

As always, the best financial routine is the one that fits into your everyday life – one that you can consistently follow.

With that, I wish you the very best in the new year!


This post is sponsored by Kenanga Digital Investing (KDI). 

Visual disclaimer:

This advertisement has not been reviewed by the Securities Commission Malaysia. This advertisement is for general information purposes only.

Content disclaimer:

This advertisement has not been reviewed by the Securities Commission Malaysia. This advertisement is for general information purposes only. It is not intended to constitute professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. Please also consider our risk warning and investment terms before investing with us.


Chin Yi Xuan

Hi there! I am Yi Xuan. I am a writer, personal finance & REIT enthusiast, and a developing trader with the goal to become a full-time funded trader. Every week, I write about my personal learnings & discovery about life, money, and the market.

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