money management Archives | Page 6 of 17

Dangerous Misconceptions That Singaporeans Have About Money

Being trapped into the majority’s preconceived beliefs about money is easy. However, debunking these misconceptions will help you to reach your financial goals.

#1: ALL THE SHOPPING MALLS IN SINGAPORE ARE EXPENSIVE

Potential Danger: Risk of diving into debt as you only frequent the high-end shopping centers.

Because of the harmony between the East and West, Singapore offers endless shopping opportunities for its inhabitants. There is a wide array of products sold at the stores. There is a place for traditional and contemporary tastes as well as for foreign luxury and locally-manufactured goods. You can find just about anything in Singapore.

If your perception of shopping was boxed in the hefty category then, you must be frequenting the Orchard Road a lot! Consider heading to the funky flea markets that are starting to boom in the recent years. One of its most popular markets is the MAAD: Market of Artists and Designers.

Image Credits: museum.red-dot.sg/maad

MAAD houses pet-friendly and budget-friendly items for the whole family. Their innovative creators are from independent and are known for artsy fashion and artisan stationary pieces. Here you will find plush toys, handmade jewelry, and paintings. The price range starts from S$10 to S$50.

#2: START WITH A HUGE EMERGENCY FUND

Potential Danger: Risk of setting yourself up for failure.

Emergency fund is an account utilized to set aside money in the event of personal financial dilemma such as unemployment or theft. Most financial planners suggest to build an emergency fund worth at least 6 months of your income. This is tough to accomplish if you are living from paycheck to paycheck.

For instance, your household spends S$5,000 each month. You managed to eliminate 10% of your expenses. Building a 6-month stash can set you back by nearly 5 years. This is too long! A better route is to start small by aiming for an emergency fund of S$1,000. This will help you cover minor financial hiccups. Once you are on track with your debts and retirement account, focus on growing your emergency fund.

#3: ONE’S CPF SAVINGS IS ENOUGH TO COVER RETIREMENT

Potential Danger: Risk of enduring an insufficient fund due to the over-reliance on a single welfare system.

Contrary to the popular belief, your Central Provident Fund (CPF) savings may not be enough to sustain the lifestyle you envision during retirement. Your CPF account is essentially a basic safety net to cushion the minimum standard of living during your golden years. Aim for other streams of income that can help grow your nest. Why?

For starters, your CPF savings depends on how much you earn during your working years. If your income is relatively low throughout the years then, you can expect to receive lesser payouts than your “higher earning” colleagues.
Furthermore, you may use your CPF savings to pay for your present necessities. If you exhausted your account to purchase an HDB flat then, you shall expect to receive lesser payouts.

Image Credits: pixabay.com

Stop making excuses! Plan strategically for retirement, now.

Surefire Ways To Waste Your Money As A Parent

Many parents, including my own, are guilty of spoiling their children with affection and attention. They spend money on the things that would make their child happy. Do not get me wrong! This is a normal reaction. However, excessively giving in to these impulses can lead to serious monetary consequences.

Awareness is the first step!

Repair your spending habits by knowing the “Four Ways To Waste Money As A Parent”:

ELECTRONIC ENTERTAINMENT

Back when I was a child, coloring books and sticker albums were all the rage. My friends and I used to compare each other’s collections and artworks. Let us fast forward to the present age. The children of today are utterly obsessed with Smartphone apps and video game consoles. Downloading no-cost gaming apps are okay, but its extras come with costly price-tags. Furthermore, the unit upgrades of video game consoles are insanely rapid.

For instance, the Xbox One may potentially be the last generational console from Microsoft. The renowned brand is looking forward to re-imagining consoles by combining its features with a Windows-operated PC.

DESIGNER CLOTHING FOR CHILDREN

Children can have sudden growth spurts. Thus, it is unnecessary to purchase loads of baby or toddler clothes. This holds true for shoes and socks as well. Instead, you may ask your friends and family members if they still have their kid’s outgrown clothes.

A kid’s wardrobe is both temporary and cluttered. This is why you must not purchase designer or boutique apparel.

SPECIAL BATHROOM PRODUCTS

The people behind children’s bathroom products lure you with the vibrant array of cartoon characters in their packaging. Barbie bath bombs and Angry Birds toothpaste sounds attractive in theory. However, they may contain chemicals that are harmful to your beloved child. Look at the ingredients rather than focusing on the pictures.

If you really care for the well-being of your child, you will take care of his or her health first.

INFANT FORMULA

Breastfeeding is among the most empowering gifts that women can offer to their babies. As much as you can, opt for breastfeeding because it will not only be healthy but also be able to save you as low as S$1,500 per year.

You may also borrow a breast pump from your friends or family members, but ensure that you change the plastic attachments. You can buy those for far less than a brand new pump.

Image Credits: pixabay.com

Whether you want to throw an extravagant birthday party or to purchase a domestic pet for your child, there are different ways to flush your money down the drain. It is time to make better choices for your family and your finances!

Sources: 1 & 2

Start 2017 Right By Creating A Year-End Financial Checklist

As we reach the end of the year, there are several things that you need to pay attention to.

DETOXIFY YOUR WALLET WITH THE DEBT DIET

The Yuletide season is all about merriment and festivities. Due to the overall positive spirit that it exudes, you may want to shy away from the looming shadows of your debt. I suggest that you pause for a moment. Now is a good time to acknowledge your credit score and to cut back on your spending.

Debt takes a toll on your relationships, your family, and your future. It is only hurting your financial health. You do not want this suffering to roll over the next year. This is why you must consider to go on the “debt diet”. The debt diet uses practical ways to help you get back on the right track. Read about it, here.

OPT FOR GROWING YOUR WEALTH

It comes as no surprise that the newbie investors are apprehensive when it comes to the timing of their initial stock purchases. However, it is important to realize that time is your ally whenever you first invest.

The compound interests of your strategic investments will add up despite the current condition of the market. You will most likely have time to recover. This idea may seem like common sense to you, but there are many Singaporeans who wish that they started investing earlier on.

KEEP YOUR INSURANCE POLICIES IN ONE PLACE

Insurance is your safeguard against unforeseen and unpleasant events. It is a way to minimize your risks and cushion your potential losses. If you are a client of several insurance companies, it is a chore to hold all the policy documents. This is where PolicyPal app comes in. It is an app that allows you to keep all your insurance policies in one place.

After collating your policies, get a summary of your overall coverage. This will help you to decide if you have too much or too little policies. For example, you may avail the AIA GLOW OF LIFE (Critical Illness Insurance) instead of adding a special rider to cover female-focused diseases.

AUTOMATE THE PAYMENT OF YOUR BILLS

December is a hectic month! To save valuable time and effort, consider automating the payment of your bills. Schedule electronic transfers thru your internet banking feature.

You may also set up a bank GIRO. GIRO payments take a substantial amount of time. This is why your money must be available at least 3 working days before the bill’s due date.

Image Credits: pixabay.com

Doing an annual review of your finances can help you spend and invest wisely for the upcoming year. Take the pro-active route to financial wealth!

Sources:1, 2, & 3

Confronting Singapore’s Baby Bust With The Baby Bonus Scheme

It does not take a genius to understand how money greatly affects the Singaporeans’ approach to marriage and parenthood. The leading reasons why most Singaporeans are hesitant to make immediate marital or child-rearing plans are related to finances. The country’s population is affected due to these circumstances.

Related Article: Why Many Singaporeans Are Not Tying The Knot

Although last year’s Golden Jubilee ushered about 33,793 babies, our fertility rate remains below the replacement rate of 2.1 (i.e., the rate to maintain the population levels). This is why the Government introduces different incentives to encourage couples to have more children.

Attractive incentives include the parental leave, childcare subsidizes, and baby bonus. This article is going to focus on the beaming Baby Bonus Scheme! It was started in 2001 to provide financial assistance and support Singaporean couples in their decision to raise more children. The scheme is part of the “Marriage and Parenthood Package”, which includes a cash gift and (or) contributions to the Child Development Account (CDA).

You are welcome to avail the Baby Bonus Scheme if your child:

a. is a Singapore citizen,
b. was born alive,
c. was born from lawfully married parents, and
d. was born on or after September 1, 2016 from unwed parents.

After careful examination, you found out that you eligible to reap the benefits of the Baby Bonus Scheme. Congratulations! Remember that it has two distinct forms – the cash gift and the CDA.

The cash gift, as the name suggests, is given in the form of tangible dollars. The purchasing power belongs to you as you can do anything you desire with it. Use it responsibly to cushion the hefty newborn costs. You shall receive a cash gift of S$8,000 for your 1st and 2nd child. While, your 3rd and 4th child shall receive S$10,000 each. This only pertains to babies born on or after January 1, 2015. The cash gift will be given to you within 7-10 working days or after completing the online form.

CDA is a special savings account that can only be opened at the government approved banks. You may use it to shoulder the costs of childcare, kindergartens, medical procedures, and private integrated shield plans. Upon opening the CDA, you will receive the Dollar-for-Dollar matching contributions and CDA First Step grant.

Image Credits: pixabay.com

The ultimate purpose of the BBS is to provide financial assistance to parents who will help build a brighter future for Singapore. For more information, go to the official website at babybonus.msf.gov.sg.

Sources: 1 & 2

Why I Failed At Budgeting

Making New Year’s Resolution is synonymous to crafting a new budget plan. Creating these two signifies an act of self-improvement. However, no plan is entirely foolproof!

These are just some of the reasons why I previously failed at budgeting:

I FOCUSED HEAVILY ON THE PRICE

Before purchasing a new laptop for work, I inspected some of the contenders from the well-known brands. My new laptop must not only fit my physical preferences, but also my financial limit of up to S$1,000. I searched vigilantly through the store and found a 14-inch HP laptop as well as a 14-inch Dell laptop. These two devices have the same processors and operating system. However, the main memory of the former is 8GB and the latter is 4GB. An important fact is that only the Dell laptop was within my budget.

Which one did I chose? The one with better specifications. Although it retailed for S$1,099, I still taught that it was a smarter investment.

According to a 2012 study published in the pages of the “Journal of Marketing Research”, people fail to follow their budget because they are more likely to spend more than they planned. You must not always beam too much focus on the price. Instead, compare the value (e.g., which has laptop optimal screen size and RAM) of what you are getting before committing to a sale.

MY BUDGET WAS TOO STRICT

Upon getting my first full-time job, I started to restrict myself. My goal was to make enough money to save up for my graduate studies and to help my parents in the household expenses. I did so. I gave about 10% of my salary to my parents and 50% would go to my savings account. I removed my trips to the spa and the cinema. A hefty savings greeted me at the end of every month. But, I felt burnout as there was no room for pleasure. This is when my budget failed me.

To turn things around, I started to make money on the side. I became a blogger that solicits money for endorsements. Eliminating unnecessary expenses is a good idea, but you must reward yourself (from time to time).

I FELT EXHAUSTED WHILE TRACKING MY SPENDING

You need discipline to track your own spending. I realized this firsthand. I used to compile all my receipts and banks statements. But, it got too exhausting! I started with a willpower to succeed until the constant vigilance took a toll on me.

A study supports my statement as it was found that self-control and intelligent decision making involves one’s energy supply. Once this energy runs out, you are more likely to go on a spree.

Image Credits: pixabay.com

Get things by following thru your plan. Practice is the key! Improved decision making and control will become second nature to you as time passes.

Sources: 1, 2, & 3

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