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5 Proven Ways to Save Money

While you may not have control over the economy, you do possess the power to influence your financial destiny through deliberate actions. With that in mind, here are five effective strategies for managing your finances:

1. EMBRACE THE POWER OF YOUR CHANGE

Begin a nightly ritual of counting your coins and bills, setting aside your loose change with dedication. As these seemingly insignificant amounts accumulate, deposit them into your savings account. Witness the gradual growth of your savings, knowing that these seemingly trivial contributions will amass into a substantial sum over time. Moreover, utilizing cash for daily expenses can foster mindful spending habits, making it more challenging to part with physical currency. While this method won’t yield instant savings, it represents a steady and reliable approach to financial growth.

2. PREPARE OF GROCERY SHOPPING

Achieving substantial savings at the grocery store requires a bit of proactive planning. Prior to your shopping expedition, assess your pantry and create a well-thought-out shopping list to fend off impulsive purchases. Learn the art of coupon hunting and enroll in loyalty programs at your local store to maximize your cost-cutting potential. Many stores offer additional discounts in exchange for contact information through their loyalty programs.

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If you possess a cash-back credit card, you could earn extra cash back on your grocery purchases. Some cards offer generous cash-back percentages, ranging from 5% to 8%. However, it’s imperative to pay off your credit card bill in full each month to avoid incurring interest and fees. Noteworthy credit cards for this purpose include the Citi Cash Back Card (providing 8% cashback at all supermarkets), HSBC Visa Platinum Credit Card (offering 5% cashback at all supermarkets), and DBS Live Fresh Card (delivering 5% cashback for online and payWave transactions).

3. IMPLEMENT THE 30-DAY RULE

Guard against impulse spending by introducing a cooling-off period between the moment you desire an item and the point at which you actually make the purchase. If you find yourself shopping online, consider placing the desired item in your cart and stepping away for an extended period, allowing time for thoughtful consideration.

If waiting for 30 days feels impractical, experiment with shorter intervals like 24 or 48 hours for smaller purchases. I, for one, have an online cart filled with 5 items that I am contemplating on buying. I will give myself a month before I start to remove items from the cart.

4. OPTIMIZE YOUR CABLE AND TELECOM SERVICES

Explore cost-effective alternatives for your cable and telecom services. This might entail downgrading your cable package or opting for a more affordable telecom plan. Additionally, consider eliminating your landline or trimming down on excess streaming services and premium subscriptions to curtail unnecessary expenses.

5. CONQUER HIGH-INTEREST DEBTS

Liberating yourself from the shackles of high-interest debts can significantly relieve financial strain. Expedite your debt repayment process by adopting the snowball or avalanche methods, enabling you to minimize the total interest accrued and free yourself from debt’s burden sooner.

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Once you’ve conquered your debts, redirect the money you would have allocated to debt payments into your savings. If your disposable income doesn’t permit extra debt payments, contemplate engaging in a side hustle to generate additional income that can be channeled toward debt reduction.

Sources: 1 & 2

Make A Personal Budget In 6 Easy Steps

A personal budget is a financial summary that tracks your income and expenses for a certain period, which is typically a month. The word “budget” is often associated with limited spending, but a budget does not have to be restrictive to be effective.

Having a personal budget that you can review on a regular basis enables you to prevent overspending. Start with these six simple steps.

#1: GATHER ALL YOUR FINANCIAL STATEMENTS

Get a bird’s-eye view of your financial situation by gathering all your financial statements. Include your bank statements, investment accounts, recent utility bills, credit card statements, receipts from the previous months, loan statements, and other receipts. The more information you can retrieve, the better.

#2: DETERMINE YOUR MONTHLY INCOME

Determine how much you make in a month. If you have a fixed salary, you will find information in your pay slip. If you get paid bi-monthly, you simply need to multiply your pay slip into two.

If you have more than one job or you are self-employed, you must determine your net income differently. Calculate your net income by examining your two most recently filed tax accounts. Add the two figures of your net profit together. Then, divide the total by twenty-four. The definitive answer is your average monthly income.

#3: CREATE A LIST OF YOUR MONTHLY EXPENSES

There are two types of monthly expenses – fixed and variable expenses. Fixed expenses are expenses that you encounter every month such as rent, car payments, and utility bills. While variable expenses change from month to month. Variable expenses include groceries, gifts, and shopping.

Write down a list of all the expenses you expect to have during a month. Do not forget about the childcare, transportation, and entertainment costs.

#4: TOTAL YOUR MONTHLY INCOME AND EXPENSES

Get the total of your monthly income and monthly expenses. If your income is higher than your expenses, you are off to a good start. You will have extra funds that you can put aside for retirement savings or debt repayments.

If your expenses are higher than your income, you need to make some changes. Find out which categories you are overspending on.

#5: EVALUATE YOUR SPENDING HABITS

Add up your total spending per expense category. Which category do you overspend on? You can get the percentages per category to understand how much of your income is going where.

#6: MAKE NECESSARY ADJUSTMENTS

After covering steps one to five, you will be able to highlight the spending areas that you need to eliminate or reduce. For instance, you can cancel your gym membership or lower your handphone’s postpaid plan.

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Amend your budget and align these changes to your financial goals.

Sources: 1 & 2

What Is Debt Check And How Do You Make It Healthy?

Debt is the amount of money borrowers by an individual or a corporation used to make huge purchases that they cannot afford under the normal circumstances. Pay this debt in a later date and you would get fined with interest! As of June 2015, the total card billings in Singapore amount to S$3,980,000.40 million! If you do not owe anybody now then, good job! You can start browsing our other articles and enjoy your debtless life. For the rest of you, there is an easy way to check if your debt is not healthy and it is called: the debt check.

DEBT CHECK

The debt check gives you 4 warning signs that you are heading to a troubled path. Awareness of this will come a long way later on. Check if these apply to you:

1. You do not know exactly how much you owe. This shows that you are not in control over your debts.

2. You are usually paying late for bills and sometimes, you go over your credit limit. This could only pile up the debt even more.

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3. You use your credit card as you would use a debit card just to get by. You can be charged with a higher rate of interest.

4. You are borrowing money to pay your debts. In a sense, you are currently borrowing money to pay the money that you previously borrowed. This vicious cycle is how most people get into trouble.

MAKING YOUR DEBTS HEALTHIER

If all or any of the warning signs apply to you then, you need to take action – now! Take control of your debt and live a happier life by:

1. GATHER DATA

The first step is to gather date of where you are financially. It is important that you are aware of your current debt situation by knowing: how much you owe, to whom you owe these to, how often do you need to repay the amounts, and what interest rates are attached to these.

2. PRIORITIZE DEBTS

The consequences of not paying off some debts are more serious than others so, you must divide your debts into categories. The categories are priority and non-priority debts. Priority debts include mortgage, rent, government tax, loans, utility bills, and child maintenance (if applicable). These are priority debts because you do not want to lose your home, to be bankrupt, to have your electricity cut off, and to be summoned in court. The rest of the debts are non-priority debts.

3. ESTABLISH A BUDGET

Establish a budget to track your spending and savings. Keep track by having an online or physical journal where you log your cash flow every month. By doing so, you will get a fuller picture of where you spend too much and where to cut down costs. You can get out of debt faster if you prioritize paying it.

4. STICK TO YOUR BUDGET

Here are some helpful tips to ensure that you stick to your budget:

Sources: 1 , 2, & 3

How And Why You Should Save For Retirement Before Your Mid-30s

When you are young, in your 20s or 30s, retirement feels like a looooong way ahead.

Typically in your 20s, the only person you have to spend for is yourself. In your 30s, you will have new financial priorities such as the wedding, child’s schooling, house loans, etc.

If you consider all the aspects of your finances and fast-paced life today however, you will realize that it is the best time to start saving for retirement before you hit 35. Even the strategies to save for retirement are in-lined with the ideal to start saving while you are young.

Here are the 4 strategies to save for your retirement before your mid-30s…

1. PAY OFF YOUR DEBTS

It makes sense to pay off your debts or at least your high-interest debts before you save for your retirement. Since not all debts are equal, pay off your high-interest debts first followed by the lower ones.

2. SET UP A BUDGET

Systematically allocate your income onto different categories and stick to that budget. Do not spend beyond what your budget is for that month. This allows you to save regularly rather than arbitrarily.

3. SEEK FOR AN EMPLOYER THAT SUPPORTS YOUR GOALS

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As much as possible, look for an employer that supports your long-term goals. If your employer offers Retirement or Pension Plan then embrace this company benefit.

4. TRACK YOUR RETIREMENT SAVINGS

During your…

a. 20s

It is best to start saving at least 5% of your income or sign up for your employer’s Retirement Plan. Avoid debt as much as possible and get educated about your finances.

b. 30s

Invest your money and check whether it is in lined with your goals. Increase your contribution to your Retirement Savings while preparing for your child’s school fees.

c. 40s

Make thought-through decisions about your expenses and cut down the unnecessary. This is when you hit your savings to the maximum. By this time you should have at least S$80, 000 to your Retirement Savings.

d. 50s

During your 50s, you must prepare for the unexpected. Seek the financial experts’ help if you must. Then, plan your exit with glee because you are well prepared for it.

Note: This is just an ideal time frame for your Retirement Savings. Contemplate and reconsider the realistic measures that are suited for you.

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