How to travel Europe on a shoestring budget

“When preparing to travel, lay out all your clothes and all your money. Then take half the clothes and twice the money” –Susan Heller

Travelling to Europe is a dream destination for most people. With its rich cultural heritage from castle to prehistoric landscapes, it is obvious why Europe is the most travelled place in the world.

However, for many the cost of air ticket alone is going to put away the idea of travelling aside.

If you are willing to get a bit out of your comfort zone and do some planning, there are a few simple ways for you to travel without breaking the bank. Try these methods and you will be bringing half the money. Here are our tips:

1. Look out for cheap airfares

First and foremost, you’ll need a flight to bring you to Europe and that’s when airfares could contribute up to 20% of your budget should be bought with careful planing and research. There are many flights comparison website, and you will be shortchanging yourself if you do not utilise them.

2. Plan your mode of transports

Once you reached your dream destination, you will not be sticking your butt at the Eiffel Tower for the entire week. Find out the cheapest way to bring you to The Louvre or the Notre Dame de Paris. If you stay within the district, walk and embraces the place like a tourist. If not there is bus, metro and RER at your service. If Google is not your best friend, make it yours.

If you are travelling to other parts of Europe, besides taking a flight all the time which may bust your budget, your next best alternative would be train. Countries in Europe are connected by high-speed trains which could take you between destinations in hours. Consider buying a Eurail pass if you plan to hop around different countries. Work the number out using the trip planner by RailEurope and see if it is more worthwhile to purchase individual tickets or a rail pass. Do note that for certain trains (night and scenic train) might need additional reservation fee to make a reservation.

Good news (and good excuse) for those under 26. They have a youth pass which you can to enjoy up to 35% discount off its Eurail Pass.

3. Plan your accommodation

The next item on your list would be accommodation which contributes to a significant amount of cost to your budget. You don’t need to stay in five star hotels to enjoy your Europe trip. Most of the time should be spent exploring the scenic and tourist attractions rather than having a spa in your bathroom or a view from your balcony that overlook the entire cityscape.

If you are a student with not much budget, hostels and backpackers would do just fine. You can also rent someone’s room temporarily using airbnb.

Otherwise, budget hotels and motels such as IBIS or Formule 1 could be in your consideration.

Again, this requires careful planning and your best friend would be more than willing to help.

There are aggregators sites like Trivago, Agoda and Booking.com which will compare and show you the available accommodation at your check in and out date and you can filter and sort them according to your budget.

If you want to further save on your accommodation, you can consider booking an overnight train and sleep while you travel to your next destination. You not only save on hotel cost, you save valuable time.

4. Food

Eat like a local. If you visit touristy areas, expect yourself to dig deep into your wallet. Follow the locals’ lead for cheap eats. Ask around to find out affordable restaurants. Of course, there are times when you should indulge in their delicacies, so occasionally pamper yourself a bit.

As a Singaporeans, we are not used to tipping, but in Europe if you plan to tip, around 10 percent is the norm.

Some of your accommodation may include breakfast, so take advantage of it. Croissant and Coffee? I will take that.

5. Entertainment

Find free entertainment. Visit the parks, concerts and cathedrals and you can’t deny that exploring Europe by foot together with a camera is by itself – entertaining. It don’t cost much to have a photograph with an Eiffel Tower or the Colosseum in the background. Visit their national heritage sites and immerse in their culture and diversity without busting your budget.

How to invest in STI ETF?

The Straits Time Index (STI) is a market-weighted index that tracks the top 30 stocks in Singapore. It comprises of some of the large and well established companies in Singapore such as Singtel, DBS, UOB, and OCBC. As such, it is a general indicator of the performance of the Singapore stock market. Think of it as a basket of 30 eggs.

The STI ETF is designed to track the index and replicate the performance of the STI. There are two different fund managers managing the STI ETF, namely SPDR STI ETF (managed by State Street Global Advisors) and the Nikko AM Singapore STI ETF. Both let you trade the STI at a fraction of the cost than owning each stocks individually.

Besides the similarity of both funds tracking the STI ETF listed on SGX, there are a few differences.

	SPDR STI ETF (ES3.SI)	Nikko AM STI ETF (G3B.SI)
Managed by	State Street Global Advisors	Nikko Asset Management
Inception date	11 April 2002	24 February 2009
Expense Ratio	0.3% of NAV	0.39% of NAV
Lot Size	1000* (100 in January 2015)	100
Fund Size	SGD 425.95M	SGD111.14M
Tracking Error	0.07% (1y)	0.27% (3y)
Dividend Yield	2.63%	2.68%

What does these differences tell you? If you are looking to invest for a longer term, go for SPDR STI ETF as it has a lower expense ratio than Nikko AM. However, currently it is sold in lot of 1000 and could be out of reach for some. You can purchase in lot of 100 from Nikko AM, though you can buy the same from SPDR ETF in 2015.

There are different ways which you can invest in STI ETF. Let’s look at the popular ones.

	OCBC BCIP	POSB Invest-Saver	POEMS SBP	DIY using SCB
Underlying ETF	Nikko AM STI ETF	Nikko AM STI ETF	SPDR STI ETF	Both
Fees	0.3% or $5 (whichever is higher)	1%	For amount less than $1,000, $6. Otherwise 0.2%/$10 (Whichever is higher)	No Min Commission, 0.2%
Buying	Automatic	Automatic	Automatic	Manual
Selling	Odd lot	Full redemption	Odd lot	Odd lot
Divindend Reinvestment	No	No	Yes	No

From the table, you can see that SCB has the lowest fees, albeit having to dollar cost average manually.

If you are those who don’t have the discipline to do it manually every month, OCBC seems like a good alternative if you can set away more than $500 monthly. For amount lesser than $500, POSB Invest Saver will be more cost-efficient. Do note that, however, if you want to sell your holdings, POSB requires you to do a full redemption where you do not have the flexibility to redeem partial like the others.

POEMS Sharebuilder plan, a more costly option, reinvest your dividend automatically as compared to the rest where you have to do it manually.

In short, to decide which is the best option for you:

Step 1: Decide if you are a discipline investor who can regularly buy into the STI ETF manually

If Yes, go for the DIY option under SCB. If not, go to step 2.

Step 2: Decide the amount you can set away monthly

Less than $500: POSB Invest Saver is cheaper
$500-$3,333: OCBC BCIP
More than $3,333: POEMS SBP

Do note that, however, POEMS SBP has other charges such as a 1% net dividend charge subject to min $1 capped at $50.

Make your own decision and decide which is the best plan for you to invest in STI ETF!

How To Pay Zero Income Tax, Legally?

When the year is coming to a close, the taxman dress up as Santa Claus and comes knocking on your door. If you have earned at least $22,000 in a year, you will receive a notification from IRAS to file your tax return between February and March.

Nobody like to pay tax. Let’s admit it.

Fortunately, there is a way to not pay it or reduce the total tax liability payable. No and this guide is not going to teach you how to evade tax which is illegal in Singapore.

First thing first, before you learn the various ways on how to reduce your income tax, you need to know how the taxman calculate your taxable income.

There is a nifty calculator in Excel on IRAS website that you can download. There is also an iPhone App call IRAS SG that you can use to calculate your income tax payable.

In short, your chargeable income is calculated as (Employment Income – Employment Expenses) + (Other Income) – (Approved Donations) – (Personal Reliefs). If you are a parent, you can further reduce the tax by claiming Parenthood Tax Rebate (PTR).

From the equation, it is obvious that besides being poor, there are three things you can work on – approved donations, personal reliefs and rebates to reduce or eliminate your income tax payable.

1. Approved Donations

If you are not aware, you can claim 2.5 times the donated amount. For example, if you have made donation of $10,000 to an approved Institutions of Public Character (IPC). Your tax deduction would be $25,000. You can check if an organisation is an IPC here.

Things that you can donate are cash, shares, computer peripherals, artefacts, public art, land and building.

2. Personal Reliefs

There are many reliefs which you can claim to reduce your income tax payable. Let’s take a look at the various reliefs.

a. Earned Income Relief

This is basically a relief to recognise individuals who receive income from work. This will be automatically deducted if you are eligible up to a certain cap. You do not need to claim for this.

b. Spouse/handicapped spouse relief

You can claim for this if your spouse is earning less than or equal to $4,000 a year. You can claim $2,000 for spouse relief and $3,500 if your spouse is handicapped. (From YA2015, you can claim $5,500 for handicapped spouse)

c. Qualifying/handicapped child relief (QCR/HCR)

Likewise, if you have kids you can claim $4,000 per child or $5,500 for handicapped child. (From YA2015, you can claim $7,500 for handicapped child)

d. Working mother’s child relief

This relief is to encourage women to remain in the workforce after having children. The amount you can claim ranges from 15-25% depending on the number and order of children. Please note that there is a cap of $50,000 per child, which includes QCR/HCR.

e. Parent/handicapped parent relief

This relief is to promote filial piety and you can claim for this if the dependant shared the same roof as you. If the dependant is staying in a different household, you must have incurred at least $2,000 in supporting him/her to be eligible for a claim.

If dependant is staying in your household, you can claim up to $7,000 per dependant (or $11,000 for handicapped parents). If dependant is not staying in your household, you can claim up to $4,500 per dependant (or $8,000 for handicapped)

f. Grandparent caregiver relief

This relief is for mother who are working and have engaged their parents/grandparents or in-laws to look after the children. The amount claimable is $3,000 on one parents/grandparents/in-laws.

g. Handicapped brother/sister relief

If your siblings are handicapped and you are supporting them, you can eligible to claim $3,500 for each sibling. (From YA2015, you can claim up to $5,500) Note: If your parents have claimed HCR on your brother/sister, you cannot claim for this relief.

h. CPF Relief

CPF relief is given to encourage individuals to save for their retirement. You can claim on your compulsory employee CPF contribution and any voluntary contributions to your Medisave account. If your employer is in the Auto-Inclusion Scheme then this will be automatically calculated. If not, you will need to claim this yourself. Please note that you can only claim if your employee CPF contributions has not exceeded the Ordinary and Additional Wage Ceiling. OW is currently $5,000 a month. Additional wage refers to annual bonus and leave pay and the formula used to computer AW ceiling for 1 Jan 12 – 31 Dec 13 is $85,000 minus total OW. AW is subject to a cap of $37,000.

For more details on the calculation, refer to IRAS website.

i. Life Insurance Relief

You can claim for this if you have bought insurance for yourself and your wife. If you are a married female and satisfy the various conditions, you can only claim for your own life policies and not your husband’s. The amount claimable is the lower of $5,000 less your CPF Contrition or up to 7% of the insured value. Note: If you contributes more than $5,000 for CPF, you are not eligible for this.

j. Course Fee Relief

The government wants the workforce to be equipped with the necessary skills and encourages individuals to constantly upgrade themselves through course so as to enhance employability. You can claim up to a maximum of $5,500 per year.

k. Foreign Maid Levy Relief

Foreign Maid Levy (FML) relief is given to encourage married women to continue to be in the workforce. Thus, if your household has employed a maid, you are eligible for this levy. You can claim twice the amount of levy on one domestic worker paid in the previous year.

l. CPF Cash Top Up relief

This relief is to encourage individuals to top up their Retirement or Special Account under the CPF Minimum Sum Topping Up Scheme. You are also entitled to the relief if your employer made the top-up for you. You can claim up to a cap of $7,000 for self and an additional $7,000 if you top up the account of your spouse, siblings, parents, grandparents and your in-laws.

m. Supplementary Retirement Scheme (SRS) Relief

If you have contributed to SRS, you can claim the amount up to the maximum cap of SRS contribution of $12,750 if you are a Singaporean/PR or $29,750 if you are a foreigner.

n. NSman (Self/Wife/Parent) Relief

For the guys, here’s another bonus for you if you have completed your national service. The general population can claim up to $3,000 if you have performed NS activities in the preceding years or $1,500 if you haven’t. For key appointment holders, you can claim up to $3,500 and $5,000 respectively.

For the ladies and parents of Neman, you can claim a deduction for $750 for the support you have given to your husband/son.

3. Parenthood Tax Rebate (PTR)

Lastly, you can claim a rebate from your tax payable if you qualify for PTR. This should be differentiated from tax relief which reduce your chargeable income. It is offered to married Singapore tax residents as an incentive to encourage them to have more children. You can claim up to $5,000 for the 1st child, $10,000 for the second and $20,000 for the 3rd and beyond. This amount can be shared between you and your spouse to offset the tax payable.

How much does it costs for a wedding? Let’s do the maths

“A wedding is a party, not a performance. If at the end of the day, you are married to the one you love, then everything went perfectly.”

After going through thick and thin together with your significant other, both of you decided that the time is right and it’s time to hear the wedding bell. Whilst this could be exciting for most but could be daunting for some.

With increased cost of living in Singapore, it would be wise to plan your wedding ahead.

Let’s breakdown the costs

Engagement Ring

For the guys, you will need to set aside this budget for an engagement ring. Ask De Beers and you’ll be looking at setting away with 2 months of your salary. Let’s set the figure as $2,000 for now.

Pre-wedding photography

This is optional but for those who are interested, it costs around $2,000 per package.

Bridal Packages

This could range from anywhere from $2,500-$5,000 and it will usually include gown for the bride and suit for the groom, bridal cars and make-up services.

Photographer and Videographer

If you are looking at professional photographers/videographers, $3,000-4000 should be quite reasonable. Look around and see if you have any friends who are professional photographers and that should help you save a few grands.

Wedding Band

Wedding ring can go from $500 to $4,000. Again, let’s set it at $2,000.

Wedding Banquet

If you want a lavish weekend dinner at a five-stars hotel, be prepare to set away around $1,500/table. 30 tables would cost you $45,000. If everyone gives you a red packet at $100 each, you’ll be looking at recouping $30,000. That will then cost you $15,000.

Honeymoon

This is highly variable and it depends on the places you plan to go and how long the trip will be. For a one to two week trip to a neighbouring Asian country, you will be looking at around $5,000. If you are planing to go for a Europe trip, be expected to spend more than $10,000.

The table below sums it up which include other miscellaneous costs.

	BRIDE	GROOM	TOTAL
Engagement ring		$2,000	$2,000
Pre-Wedding Photography	$1,000	$1,000	$2,000
Bridal Package	$2,000	$2,000	$4,000
Photographer/Videographer	$1,500	$1,500	$3,000
Wedding Band	$2,000	$2,000	$4,000
Wedding Banquet	$20,000	$20,000	$40,000
Honeymoon	$5,000	$5,000	$10,000
Lunch Catering	$1,000		$1,000
Emcee & Coordinator	$88	$88	$176
Bridesmaid/Groomsmen Dress	$200	$200	$400
Red packets for Bridesmaid/Groomsmen	$500	$500	$1,000
Bridal Car		$500	$500
Bouquet & Corsages	$75	$75	$150
Gatecrash Red Packets		$500	$500
Total	$33,363	$35,363	$68,726

Don’t forget that you will be recouping some of your costs from the red packets you received from your guests. For a setting with 300 guests, and assume $100/red packet and equal share between the bride and groom, you will be getting back $15,000 each.

The figures above are estimated and feel free to adjust the figures according to your budget!

6 tips to save on your air ticket

Planning for a getaway? It’s never too early to start planning for the trip. Before you get excited over your dream destination, it pays to start scouting for the cheapest tickets.

There are many factors that affect the price of the ticket. The price of a ticket may fluctuate and differs across different airlines and the route taken. Ultimately, it depends on the basics of economics of supply and demand which explains for the variation in pricing.

Here we share with you 6 tips to save on your air ticket:

1. Choose your departure and arrival date wisely

Airlines segment their market to increase their profitability. In other words, they charge different travellers different price for the same route. How do they do that? Business travellers usually travel on a Monday and return on Thursday and Friday, and flying on these days would usually be more expensive than if you travel on mid-week, say Tuesday and Wednesday. Avoid these dates if your travelling plan is flexible.

2. Buying early on the right day

While it is ideal to purchase your ticket when airlines launches a sale, you can also enjoy up savings if you make your purchase on the right day. According to flight comparison website Skycanner, it would be the cheapest to book as early as possible for budget and short-haul flights. The best time to book is 28-29 weeks ahead of your travelling date from Singapore. Whereas for full service and long-haul flight, it may be cheaper to wait, but not too long from your flight date. A general benchmark would be between 17-22 weeks ahead of scheduled flight.

3. Flying on less peak hours

If you are flexible with your travelling plan, flying on less popular hours will get you cheaper ticket. Most people do not want to reach their destination late in the evening or depart early in the morning, but as long as public transport is available to bring you to and fro from airport-accommodation, why not?

4. Use flight comparison websites

With advent of technology, the introduction of flight comparison websites have helped many individuals compare prices of different airlines at their selected date. There are many sites like SkyScanner, Kayak, Zuji and Expedia which does the job for you. Use at least 2 to make sure that you are getting a bargain for your air ticket.

5. Credit Card Perks

Before you book your next flight, check if your credit card is eligible for rebates, air miles or free travel insurance. Many banks are offering travelling credit card to chalk up your mile points which can be used to offset your next ticket or upgrade your seats. If you are a frequent traveller, you may even redeem for free tickets. If not there are also rebates and free travel insurance as an icing to the cake.

6. Shop for Travel Vouchers

You can search for travel vouchers that are up for sale on classified sites like Gumtree and STClassified. These vouchers are usually offered by individuals who have won them in lucky draws and gifts and do not intend to travel. These vouchers are usually being offered at 10-20% cheaper off its value.

7. Use our Hotels Search Engine (*Updated 9 March 2015)

Have you heard of Trivago, Expedia, Hotel.com? Yes, these hotels aggregators search thousands of hotels to find you the best deals but which one to use? Use our hotels search engine (http://hotels.moneydigest.sg) as we search these aggregators to bring you the best price guaranteed hotels.