Tarik Gaji – Are you wasting your time and money?

5th February 2020
visualisation of "tarik gaji" concept

A while ago, I heard of this thing people are doing called “tarik gaji” but the explanation sounded convoluted so I paid no mind to it. It wasn’t until recently I tried to comprehend what it was. And to my surprise, this tarik gaji thing was something that many people seem to get involved in!

What is Tarik Gaji?

Tarik gaji is basically an informal agreement between a group of people, usually colleagues to pool money together; somewhat like a monthly savings plan of sorts. The funds are collected and kept by one nominee from the group. And each month, members would reap the “payout” where they “withdraw” their share from the pool.

For example, Jim agrees to save with 11 other friends at $100 per month starting January for one year. It’s also agreed that Jim will get his full amount of $1,200 in August, which he can do whatever he wants with it. And from there, the cycle continues until the end of the year. After which, depends if the group want to start another cycle.

So in this scenario this would be how it works out for Jim:

  1. Jan – Pay $100
  2. Feb – Pay $100
  3. Mar – Pay $100
  4. Apr – Pay $100
  5. May – Pay $100
  6. Jun – Pay $100
  7. Jul – Pay $100
  8. Aug – Pay $100 + Withdraws $1,200
  9. Sep – Pay $100
  10. Oct – Pay $100
  11. Nov – Pay $100
  12. Dec – Pay $100

Sounds good, right?

So in the example it’s pretty obvious that Jim “saved” $1,200 over the course of the year. Now, it’s a pretty good system because it cultivates a few things:

1. Actually able to save money

How many times have you heard a friend say, “I need to save money” and never actually doing it? Well, with this system it’s pretty easy to see that you would have saved some money in one year.

2. Savings habit

Not only do you get money at the end, it conditions our minds to “lose” the money temporarily. I found people don’t usually save because they think it’s subtracting from their budgets. That mindset is challenged once you use this scheme but it seems acceptable for some.

So what’s bad about it?

Ah, you seem to have read my pessimistic mind. As with plans and ideas, there are pros and cons (like how BIBD Aspirasi has its strengths and weaknesses. Safe to say, tarik-ing your gaji has a few weaknesses you should know.

1. Fully trusting the group “banker”

The group nominee can be anyone. That being said, how much can you trust the person? If worst case scenario the “banker” runs away with everyone’s money, would you be financially ok? (Especially if you have not gotten your payout)

2. No gains from saving

Now, you’ve been saving quite a bit. But unlike traditional methods like bank accounts or investments, there’s no return on investment. Even banks give you a (although paltry) 0.15% return for parking your money with them.

3. No protection from loss of money

If you deposit your savings into a bank account in Brunei, up to $50,000 is actually protected by a Deposit Protection Scheme. This scheme basically guarantees that in the off chance a bank closes down, you’ll be refunded up to $50,000 of your savings. But savings with Mr. X and it disappears? Your money is lost and it’s probably a police report.

4. Doesn’t cultivate disipline

I’ve heard of a few people groaning and moaning “siuk eh, Ms. Y gets her payout this month”. Well, it’s part of the process right? Sadly for some, it simply relinquishes any control they should have while waiting for “their turn”. So while you may technically be saving money, you’re really at the mercy of the group.


I’m not saying tarik gaji is a waste of your time. On the contrary, I believe you can use this to cultivate a sense of saving and discipline. But only if you have a good mindset to do so. Otherwise, you’ll simply be following the pack, taking on unnecessary risk and at the end of the day, can’t hope to save a dime without the group.

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