Your Ultimate Guide To Financial Literacy: What It Is & How To Improve It

DEFINITION

Financial literacy is the ability to understand and efficiently use various financial skills including financial management, investing, and budgeting. Financially literate consumers not only manage their money with confidence, but also have a better chance of handling the inevitable ups and downs of their financial lives.

It is the foundation of your relationship with money, which enables you to create a lifelong journey of learning. It will help you understand how to prevent and manage financial issues as they arise. The earlier you start, the better off you will be.

On that note, here are the advantages of financial literacy.

UNDERSTAND HOW MUCH YOU SPEND & EARN

When cultivating financial literacy, establishing a budget can give you a clear understanding of your expenses and income. Once you have a budget in place, you will be able to track your spending and revisit your spending plan regularly. With the variety of budgeting methods such as 50/30/20 plan, you can choose one that suits you best.

PAY OFF & AVOID DEBTS

Searching for the lowest interest rates when comparing loan terms can help you save a substantial amount of money over time. If you already have debt, financial literacy can help you select the best methods to eliminate your debt. You can pay off your credit card balances each month, so you do not get trapped by the interest charges. You can look for a credible expert such as a credit counselor if necessary.

WORK TOWARDS FINANCIAL SECURITY

Saving for retirement will enable you to secure your future. As you become more financially literate, you will be able to examine how much you need to save to obtain your retirement plan. You will be able to carve your action plan too.

WAYS TO BOOST YOUR FINANCIAL LITERACY

1. SET A BUDGET

Track your earnings and expenses each month by using an Excel Spreadsheet, a ledger, or a budgeting application. Your budget should include your incomes (e.g., investments and paychecks), fixed expenses (e.g., rent and utilities), variable expenses (e.g., shopping and travel), and your savings.

2. PAY YOUR BILLS ON TIME

Stay on top of your monthly bills by making sure that payments arrive on time. Consider taking advantage of automatic payments or signing-up for payment reminders (i.e., by email, SMS, or phone call).

Image Credits: unsplash.com

3. BUILD YOUR SAVINGS

Building your savings will help you reach your financial goals. Decide how much you want to contribute each month and stick to it.

4. CHECK YOUR CREDIT SCORE

You can request your credit report from Singapore’s credit bureaus. Companies assess your creditworthiness by looking at the credit score. Having a good credit score has its perks such as helping you obtain the best interest rates on loans and credit cards.

5. MANAGE YOUR DEBTS

Utilize your budget to manage your debt. You can devise a plan to reduce your monthly spending and increase your monthly repayment. Develop a debt-reduction plan such as paying for the loan with the highest interest rate first. If your debt is excessive and overwhelming, you can contact lenders to re-negotiate repayment or find a debt-counselling program.

Sources: 1 & 2

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Endowus Singapore Retirement Report 2021: Almost 50% of Singaporeans have not started retirement planning

Singapore residents crossing the road

Do you know that though CPF members’ total balance has increased from roughly S$125 billion in 2006 to S$474 billion in March 2021, only 63.6% of active CPF members who turned 55 could set aside their Full Retirement Sum (FRS) or Basic Retirement Sum last year?

Hence, to better understand Singaporeans’ attitudes towards retirement, Endowus has worked with YouGov Singapore to develop the Endowus Singapore Retirement Report 2021. The survey took place in May this year with a sample size of 1099 adults, reflecting our tiny red dot’s adult profile population.

Here are its findings.

39% of Singaporeans are worried about retirement inadequacy

The survey revealed that about 1 in 3 Singaporeans are worried about retirement inadequacy. However, the results varied between the genders. Twice as many men than women confidently agreed that they hold sufficient money for retirement.

Almost 50% of people have not started planning for retirement

While 53% of Singaporeans are planning to use or are currently using CPF to fund their retirement, almost 50% of people have not started retirement planning. This is especially true for the younger age group under 35.

Lower-incomers are less likely to plan for their retirement with CPF
younger Singapore residents

Image Credits: The Jakarta Post

Another worrying factor is that those earning below S$3,000 are less likely to plan for their retirement with CPF when compared to those with incomes above S$6,000 per month. This thus also means that lower-incomers are not making full use of their CPF. It also lowers their chances of achieving the FRS for financial stability at retirement.

Only 25% are currently investing their CPF

The report also showed that close to 70% lack confidence in investing their own CPF monies. That is why only 25% are currently investing their CPF. However, most Singaporeans seek higher returns and ranked it as the most critical criteria for CPF investing.

30% are asking for tools on CPF investing knowledge

There seems to be a gap in using CPF around financial decisions; as such, a third of Singaporeans are requesting tools to help them understand the impact of their financial decisions around their CPF. Some are also appealing for resources to aid them in estimating retirement income from their CPF.

To that, Samuel Rhee, Chairman and Chief Investment Officer of Endowus, agrees. He said, “Considering these shifting time horizons and other uncertainties, more education may be needed to help Singaporeans make better use of their CPF, especially earlier in life, when savers have more time to take advantage of asset growth.”

What about you? Have you started retirement planning? Ponder over these things if you want to be on track to building your retirement fund. For the full Endowus Singapore Retirement Report 2021, please head to endowus.com/insights/singapore-retirement-report-2021.

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6 Tried & Tested Tips To Save Money On Shopee Singapore

E-commerce became a staple part of our lives due to the aftermath of the global pandemic. Personally, I only understood the Shopee craze in the recent months. Shopee is a Singaporean multinational technology company, which focuses on e-commerce.

For those who are not familiar with Shopee, it is an online marketplace that can be accessed through their website or their app. What separates it from the rest of the e-commerce websites is its interactive platform.

Save more money on your next Shopee shopping by following these tips.

#1: TAKE ADVANTAGE OF SHOPEEPAY

Sometimes, Shopee vouchers may require you to use its digital wallet called ShopeePay. ShopeePay often offers a higher percentage of cashback compared to non-ShopeePay vouchers.

If you are skeptical about using ShopeePay, you can simply transfer the exact amount you need for payment. ShopeePay lets you withdraw the leftover cash back into your bank account directly in case there are leftover funds.

#2: SHOP DURING EVENT SALES LIKE 8.8

For those who are not familiar with the event sales, online marketplaces have monthly sales on dates like 8.8 or 11.11. On top of the regular sales during occasions such as Christmas, you can enjoy discounted items with additional cashback in the form of exclusive Shopee vouchers.

Not to mention, Flash deals also occur during this period. It is up to you to make the best purchase for your family. The August sale is on 8.8, which is Shopee’s National Day sale.

#3: CHECK OUT THE SHOPEE MALL

If you want to invest on authentic products from your favorite brands such as Olay, adidas, or Samsung, you can go to the Shopee Mall. The Mall is a dedicated space that allows its users to request for a free return of product within its allowed period. It has a free shipping option too, which you can get if you meet the shop’s minimum spending requirements.

#4: DO NOT MISS THE FLASH DEALS

Look out for the Flash deals that happen throughout the day. These deals offer incredible discounts with products costing as low as S$0.50. As these are usually hourly sales, you can set reminders within the Shopee app.

Several stores (including big name brands) have constant deals too. Just click the dedicated deals section on the stores’ pages.

#5: APPLY VOUCHERS BEFORE CHECKING OUT

Vouchers replenish daily. Claim your vouchers to your heart’s content. Brands offer exclusive vouchers such as free delivery with a minimum amount of spending. You can follow these shops to get updated. Just remember to avail and apply the free delivery vouchers.

Best of all? Users are allowed to apply multiple vouchers upon check out. Enjoy more discounts when you apply the vouchers. You can claim as early as 12 AM.

#6: COMPARE THE TOTAL PRICES

As I was looking for an arts and crafts activity online, I was mesmerized with the colorful beads in the Diamond painting. Diamond painting is a new arts and crafts activity that fuses the dynamics of Paint By Numbers and Cross-stitch. It uses beads that correspond to numbers or symbols on the canvas. Since I am a beginner, I opt to search for affordable practice kits on Shopee. Two shops offer the cheapest prices. I decided to compare these two by clicking the “Add to Cart” button.

Image credits: pixabay.com

When you sort your results by price, the lower priced items will appear on top. Naturally, you will gravitate towards the cheapest ones. However, you must include the costs of shipping fee. The product price may be cheaper, but it could end up more expensive when you factor in the shipping fee. For instance, I can buy a cheaper Diamond painting kit in an overseas shop, but it will cost me more due to international shipping rates. Some merchants offer lower shipping fee or provide free shipping so, get the total cost of the purchase.

Sources: 1 & 2

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Here’s how single-income families can cope with financial anxieties

a woman facing financial anxiety

Every family out there is different, and we ought not to compare ourselves to others. But truth be told, single-income families can lead to a heightened amount of pressure on that sole breadwinner.

Carrie Casden, financial wellness coach and president of Summit Financial Management, said, “Quite often, feelings of fear and anxiety stem from… simply perceiving that we’re out of control of our circumstances, and these sentiments can be particularly prevalent when it comes to single-income families.”

Want to take better control of your mind and financials? Here’s how single-income families can cope with financial anxieties, according to the experts.

Reorder your priorities

Casden noted that families usually have quite a few financial goals they’re aiming for, and that’s okay. However, if there isn’t enough income to put a checkmark beside the various aims, one must learn how to make changes.

Reorder your priorities by keeping in view the items lowest on the list. You can always come back and reassess your financials every quarter of the year.

Be aware of your money views
Singapore money

Image Credits: internations.org

To review your financial anxieties, it’s essential that you’re aware of your views towards money. Here are some questions to ask yourself:

  • Are you cripplingly frugal or overzealous with spending?
  • Does a “spend too much” or “don’t make enough” mindset bother you?
  • Do you tend to avoid talking about money because they make you uneasy?

“There are different ways to reduce anxiety based on the actual issues at hand, which is why I work with clients to help them identify their specific money archetypes to understand the origin of their anxieties and behaviours around money,” said Casden.

Develop a spending plan and track your outputs

Ann James, an accredited financial counsellor and CEO of Financial Freedom Battle Buddies, recommends single-income families develop a spending plan. This will allow individuals to have a sense of control over their money and, in turn, reduce frustrations associated with the unknown.

When it comes to tracking outputs, some of us are experts with the excel sheet. But Dr Elizabeth Dunn, PhD, a happiness researcher, advises us to focus on how purchases make one feel.

“What purchases bring your family joy and which lead to feelings of regret or sadness? Maybe a long and expensive dinner out did not end up saving anyone time, and the regret over spending all of that money on one meal was not worth the spend. But your Hulu or Netflix subscription means the entire family can have a movie night together once a week, and that brings joy to the entire family,” she added.

If you’ve tried the above methods but can’t seem to get around the stress from worrying about money, ask for help.

“Seeking assistance from accredited financial counsellors, credit or housing counsellors, or financial therapists can help alleviate feelings of shame and ultimately reframe an individual’s thoughts and relationships with money,” advised James.

Do you know that the Singapore Counselling Centre offers Financial & Debt Counselling? Or you can also book a 1-to-1 Credit Counselling Session with Credit Counselling Singapore. Click through the links to find out more.

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6 Tried & Tested Tips To Save Money On Lazada Singapore

E-commerce became a staple part of our lives due to the aftermath of the global pandemic. Lazada has always been my go-to online marketplace because of its user-friendly interface and its variety of payment options. Lazada Group is a Singaporean multinational technology company, which centers on e-commerce.

Founded by Maximilian Bittner with the backing of Rocket Internet in 2012, Lazada Group is currently owned by the Alibaba Group after its acquisition in 2016.

Save more money on your next Lazada shopping by following these tips.

#1: SUBSCRIBE TO THE NEWSLETTER

Are you new to Lazada? Subscribe to its newsletter to receive instant discount on the site. As a new subscriber, you will be welcomed with a coupon for your first purchase. You can also get access to the latest promotions and receive news of the trendiest products in the site.

#2: SHOP DURING EVENT SALES LIKE 8.8

For those who are not familiar with the event sales, online marketplaces have monthly sales on dates like 8.8 or 11.11. On top of the regular sales during occasions such as Christmas, you can enjoy discounted items during this time.

Not to mention, Flash deals also occur during this period. It is up to you to make the best purchase for your family. The August sale is on 8.8 (August 8 to 10), which is Lazada’s National Day sale.

#3: CHECK OUT THE LAZMALL

If you want to invest on authentic products from your favorite brands such as Philips, Casio, or Lysol, you can go to the LazMall. The Mall is a dedicated space that allows its users to request for a free return of product within its allowed period. You are expected to get 100% authentic products, or you can get your money back. Get two times money back if you get a non-authentic product from the LazMall (T&Cs apply).

#4: DO NOT MISS THE FLASH DEALS

Look out for the Flash deals that happen throughout the day. These deals offer incredible discounts with products costing as low as S$0.50. As these are timed sales, you can set reminders.

Image Credits: pixabay.com

Several stores have constant deals too. Just click on the brands that you love.

#5: APPLY VOUCHERS BEFORE CHECKING OUT

Vouchers replenish daily. Claim your vouchers to your heart’s content. Brands offer exclusive vouchers such as free delivery with a minimum amount of spending. You can follow these shops to get updated. Just remember to avail and apply the free delivery vouchers.

Best of all? Lazada partners with different merchants and credit card issuers such as Citibank. You can spend S$250 to get S$250 back in the form of Lazada and RedMart vouchers when you apply for the Citi Lazada Credit Card (T&Cs apply).

#6: SHOP AROUND

It is important to do your research before purchasing anything from Lazada. Read up on the product you intend to buy to prevent buyer’s remorse. This is especially vital when you are making huge purchases such as home appliances or gadgets.

Please read the product description thoroughly and access the warranty and the customer reviews.

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