It can be immensely frustrating to feel stuck in a financial rut with no means out. You may think that you earn decent money, but still struggle each month. Whether you are overspending or not making enough money, these problems can lead to big trouble!
Consider these financial issues and how to solve them.
#1: CONSTANT FINANCIAL WORRIES
There is a difference between worrying about covering your necessities and worrying about unexpected car repairs. Constant worries about money can keep you up at night.
Put these worries to rest by creating a realistic plan. A budget allows you to plan out your purchases within a certain period. Moreover, an emergency fund can help you cover unexpected costs.
#2: RELIANCE ON CREDIT CARDS
One of the surefire signs that you are having financial problems is your reliance on credit cards to cover all your finances. If you need the help of credit cards to manage between paychecks, your balance can trap you. The solution is easier said than done – stop using your credit cards and leave within your means.
#3: UNABLE TO COVER BILLS
It is important to act quickly when you are not able to pay the bills on a monthly basis. Look for ways to reduce your bills and increase your income.
Start by cutting down your unnecessary costs. Trimming back luxuries across the board such as bringing your mobile plan down and canceling your cable television can help. Instead of eating out, you can cook at home to follow your meal plan.
#4: INABILITY TO HANDLE EMERGENCIES
It is difficult to grow your savings when you are stretched tight each month. However, the inability to create an emergency fund can lead to reliance on credit cards. Eventually, your credit card payments will grow detrimentally.
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Set up an emergency fund by starting slow. You can put aside an extra S$50 per pay period and build from there.
Accounting is a highly technical matter. The laws governing accounting changes from time to time. Furthermore, the accountants have specialized knowledge about areas that you cannot compete with. Hiring a third-party accountant for your business has its advantages.
On that note, here are the top advantages of putting up a budget for a good accountant to assist your business.
#1: SAVES YOU TIME
Every ounce of time is precious when you intend to grow your business. However, keeping up with the fast-paced economy can cause a lack in time. Choosing a trusted accountant can help you save valuable time. Thus, you can focus on the core competencies of the business.
#2: REDUCES THE RISK OF INTERNAL FRAUD
The absence of robust internal control may lead to the increasing numbers of fraudulent businesses. Due to internal fraud, your company may lose money. Engaging in a third-party accounting firm can help you keep tabs with the financial trail. Experts of these accounting firms are highly capable of identifying the discrepancies.
#3: MINIMIZES ADDITIONAL COSTS
When you outsource the accounting services, you will be able to save the costs of having an in-house employee. You do not need to pay monthly salary, benefits, and so on. You do not need to worry about the issues related to hiring, maintaining, or firing employees.
#4: GIVES SOUND ADVICE
By hiring the services of a good accountant, you are assured that the advice you are getting are both informed and authentic. You will be able to get sound advice that ensures your business is on the right track. Experts follow professional development standards to ensure that their skills and knowledge are up-to-date.
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#5: HELPS WITH BOOKKEEPING
For small businesses, bookkeeping is essential. An accountant can help you record regular expenses, bank balances, sales, and other financial matters related to your business. It would be difficult for you to anticipate future gains and losses without accurate bookkeeping.
#6: REDUCES TAX LIABILITY
Accountants are knowledgeable when it comes to helping you save your taxes and avail tax deductions. They look at your monetary capacity and financial transactions. A good accountant can give you advice on the most tax efficient way of running your business.
#7: EXPANDS YOUR NETWORK
An accountant can grant you access to other industries related to your business. This gives you greater chances of meeting new people who can be a part of your network. Who knows? These people can help you with other aspects of your business.
As I receive my annual bank statements and credit card summaries, I realize how my financial year went by. January is a fantastic time to review your financial strengths and weaknesses. Where did you fall short? Not only is it a good way to reflect on your spending habits, but it is also a good way to craft your financial goals.
Use your year-end resources to establish your financial resolutions for the year 2020!
1: IDENTIFY YOUR FINANCIAL GOALS
Several articles from Money Digest highlighted how helpful it is to determine your financial goals. Start your journey by identifying both your short-term and your long-term financial goals. Are you hoping to earn a degree or to expand your retirement fund? Do you see yourself purchasing a new flat with your spouse? Or, do you want a to lead a different career?
To illustrate your path in a detailed manner, you may create a Financial Vision Board. Take some time to think about how to achieve your financial goals this year. Consider your outlook before your plan of attack.
2: SAVE MORE MONEY
How many times have you heard about “saving more money” as a resolution? This is a common financial resolution for many Singaporeans. However, most people do not know how to start. It is recommended to be specific to increase the chances of success. Increase the percentage of your monthly income that goes into your savings.
Save at least 15% or your monthly income and increase the percentage whenever you feel more comfortable. If you are already saving 20% of your income then, you are in good place. A person who is earning S$4,000 per month can reap the benefits of having S$9,600 by the end of the year. Raising the percentage to 30% will equate to having S$14,400 by December 2020. Saving more money gets you closer to achieving your financial goals.
3: PAY OFF YOUR DEBTS IN FULL
Two years ago, MAS estimated that there are 9 million credit cards in circulation in Singapore, with Singaporeans charging an average of S$555 per card. Imagine how much these numbers have grown since? Credit card debt is rising in the country as convenience is hard to resist.
Many credit card holders enjoy the attractive benefits or the good rewards programs of several issuers. While there is nothing wrong with paying using cashless methods, you need to be responsible with paying the hefty interest rates and balances. Commit to paying the full amount of your monthly debts this 2020!
4: GROW YOUR INVESTMENTS
Aside from increasing your savings, you can make your money work for you by investing each month. There are many ways to invest your money such as putting it in high-interest savings account. This can increase your earnings by 2% per annum.
Another approach is to sign-up for investment-linked insurance policy where a portion of your premiums will be invested in specific investment funds. Review your insurance policies and ask your financial adviser about this option.
5: GO ON A CASH-ONLY DIET
You have endured the back-to-back expenses brought by the Holiday season. Chances are, your credit card got exhausted due to the year-end sales and other Christmastime delights you spent for your beloved ones.
Cushion these expenses by going on a “cash-only” diet for a few weeks or a couple of months. Begin by allocating a monthly budget based on the money you have. Give yourself a specific cash amount per week and work your way around it. Doing this will challenge your self-control and your resourcefulness.
6: AUTOMATE YOUR SAVINGS
Transform your new year enthusiasm into something productive by automating your savings. Commit to this new habit by researching on the available services of the local bank institutions. For instance, I recently came across with the UOB Stash Account.
UOB Stash Account allows you to accumulate your savings for up up to 1% p.a. interest, simply by maintaining or increasing your previous month’s Monthly Average Balance. An initial deposit of S$1,000 is needed to open the account, which is open for all. You can apply for your Stash Account and get an approval within minutes by simply going to the website. Terms and conditions apply.
For the longest time, moonlighting was seen as a means to take on extra work in order to supplement one’s full-time employment. It was exclusively for underpaid employees or those who are severely strapped for cash. Nowadays, moonlighting and having a second job are seen as acceptable means to expand one’s income without the weight of stereotypes.
Having a second job does not only expand your wallet, but also maximize your skills and talents. Many employers are open to the idea of giving their employees the freedom and flexibility to take on other jobs to keep up with the rising cost of living. To illustrate, combining your full-time job with a 20-hour per week sideline can pull in a greater income. You may also combine two part-time positions to get an income that will equate to a full-time position while working for less hours per week.
That is just the beginning. The following are other benefits of having a second job.
LESSENING YOUR TRANSPORTATION COSTS
Four years ago, I juggled my work as an enrichment teacher and as a freelance writer. As a teacher, I needed to travel three to four times per week around Singapore. While, my job as a freelance writer brought me to the comforts of my own home.
If your second job is either at a home office or at a place near you, you will be able to save more money on transportation costs. This situational advantage can help you shave dollars on monthly petrol consumption or EZ-Link top-up.
OPENING NEW JOB OPPORTUNITIES
We cannot fully guarantee that the economy will stay the same in a few years time. Say you lost your job. If you are running out of full-time job options, you may try your luck in several part-time employment positions that can eventually turn into a coveted full-time slot. After all, it is more cost-efficient for an employer to hire individuals who are already trained than to hire individuals who are unfamiliar with the field.
When given the chance to partake in a team as a part-timer, show how eager you are to know the tricks of the trade. Volunteer your time and exhaust your energy as much as possible. Do not waste the opportunities given to you.
GIVING MORE MEANS TO PURSUE OTHER ACTIVITIES
Freedom – is easier said than acquired. Experts say that people who have second jobs or second careers have a higher sense of freedom such as the feeling of not being shackled to one company. Furthermore, practicing in a different field gives you a financial cushion in case the economy becomes sour towards your other career.
Having a second job gives you more freedom to pursue other activities that will showcase your skills. If you are thinking of switching careers and want to minimize the risk, take on a part-time position that will enable you to test the waters. For those people who lack prerequisites or academic credentials to pursue their dream job, a part-time position may serve as a stepping stone that provides free training and meaningful experiences. While, others may use part-time positions as a means to climb the ladder within an existing field. For instance, a teacher may obtain an entry-level part-time work in order to finance his graduate studies. Further education will land him a more lucrative job in the field.
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It is up to you to find ways to maximize your income and make the most out of your second job.
Inflation is a sign of a healthy economy as it shows that the country’s wealth is growing. During inflation, you will experience periods of price surge. This is the perfect time to be more conscious of your spending. Do not worry! Inflation rates will eventually taper after several months. When this happens, your wallets can have the sigh of relief!
Ultimately, here are some strategies that you can employ to beat the inflation.
LET YOUR MONEY WORK FOR YOU
Let’s face it! To outpace inflation, having a high-interest savings account or long-term time deposit is not enough. Consider sparing some of your money to investment options that are safe to grow in spite of inflation. I am referring to asset classes such as mutual funds or pooled investments. Nowadays, many financial institutions in Singapore offer mutual funds at friendly rates. Read this article to learn more.
SLASH YOUR TRANSPORT COSTS
The Singapore government has declared this year as the Year of Climate Action. Take a page out of this initiative by getting on board with the public transport. You will not only save money by taking the bus or the MRT, but you will also minimize the carbon footprints.
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People who own cars spend around S$2,600 per year on petrol. Not to mention, there are other accompanying costs of car ownership such as parking and road tax. Taking public transport could diminish your costs significantly! Use your extra money to combat the price surge due to inflation.
CULTIVATE YOUR EMERGENCY FUND
An emergency fund is an account for funds set aside in case of events brewing from personal financial dilemma (e.g., loss of a job or having critical illness). When inflation rates elevates, your emergency fund becomes an added cushion to cover the sudden increase in the prices of goods.
It will keep you secured until you can adjust your budget. Experts recommend that you build an emergency fund covering your expenses for at least six months. If you have a family, then covering nine months’ worth of expenses would be a better target.
HUNT FOR GROCERY DEALS
A major chunk of our expenses is allocated to food. Whether you like it or not, inflation affects all goods differently. For instance, the cost of food rose faster than the general rate of inflation between September and October 2017. This price hike held across all types of food, from dairy products to vegetables.
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To get the best prices on food, you may use price comparison websites (e.g., diffmarts.com) or use online coupons. Spot the latest deals to bring down the cost of your basket!
