Celeste Elle, Author at MoneyDigest.sg

7 red flags that show you’re spending way too much money

Do you believe that one of the foundations of achieving wealth is saving as much money as you can? A highly effective method of building your savings is to live below your means, and we can’t emphasise that enough in our articles.

Just in case you get us wrong, this doesn’t mean taking a vow of poverty and selling all your possessions away. It just means actively monitoring your spending and watching for ways to spend less.

Watch out for these red flags that may indicate you’re spending way too much money.

#1: Spending above your salary

Spending more money than you make is a bad habit. Overspending can put you in debt, which is incompatible with your aim for financial freedom.

To better evaluate your spending, make a list of all your monthly expenses – housing, food, bills, memberships, and subscriptions – and compare it to your monthly income. If your expenditure exceeds your salary, you must find ways to increase your earnings or decrease your spending.

For freelancers with variable incomes, this can be challenging. One strategy is to calculate your average monthly payment over a rolling 12-month period and use that number to budget. You may also use a more conservative approach by taking your lowest-earning month as a baseline to account from.

#2: Budgeting based on your pre-tax income

Image Credits: wincofoam.com

Constructing your budget on your pre-tax earnings can be a huge mistake. If you’re a Singapore Citizen (SC), Singapore Permanent Resident (SPR), or a foreigner who has stayed for 183 days or more, you would be well aware of Singapore’s income tax requirements.

The more money you earn, the more you pay in taxes. This means our take-home pay is less than our hourly rate or our salary would suggest. It is, therefore, unwise to craft your budget on your pre-tax income since you do not get to keep everything you earn.

Build your budget around your take-home pay minus the taxes for a more accurate financial review.

#3: Oustanding balances on your credit accounts

Having credit cards to supplement your income can be highly attractive. However, unpaid debt on your credit lines is detrimental to your financial health.

According to some local findings, the average interest rate on a credit card on our sunny island is about 25%. If you do not pay off your credit card in full every month, the remaining balance will begin accruing interest, and this may grow out of hand if not kept in check.

Debt can increase rapidly even before you realise it. Be sure to pay off your credit balances in full at the end of each month, and if you can’t, at least go past the minimum sum required to “get by’. This is because merely making minimum payments every month is a dangerous practice.

Should you find yourself unable to do so, it means you are spending too much on credit.

#4: Having a negative net worth

Image Credits: corporatefinanceinstitute.com

Investopedia defines net worth as the value of all of your assets minus your liabilities. If your net worth is negative, you owe more money than you own. Makes sense? If not, read that again.

This is not a desirable state of affairs for sure. To know your net worth, you can calculate it using Moneysense’s Net Worth Calculator. The numbers will help you take stock of your current financial situation.

For those who are severely indebted, with a net worth of – S$15,000 or less, you may wish to consider examining Singapore’s bankruptcy laws to help you repair your finances and start afresh.

#5: Housing expenses over 40% of your gross income

Experts suggest that your housing expenses should not exceed 30% to 40% of your monthly income. For example, if you bring home S$4,000 a month, your monthly housing budget should be somewhere between S$1,200 and S$1,600.

To find out your ideal housing expenses, simply multiply your monthly income by 0.3 or 0.4 to see what your monthly budget for housing expenses should be. If your rent exceeds this number, you may need to try and find a less expensive apartment and not survive just on your savings.

#6: Spending to keep up with social influences

Image Credits: motors.hongsehgroup.com

In our current age of Instagram and TikTok, it is easy to get swirled into the world’s neverending wants. We may see influencers, friends, or family members buying new items or taking expensive staycations and begin to wonder if we should do the same.

But before we buy that latest device or spend money on an extravagant restaurant date, we must ask if we’re doing this for ourselves or to impress someone else on the worldwide web? Is it worth finding money in the budget to keep up with appearances?

Spend your money wisely and avoid the trap of wanting the latest of everything because that will only lead you down the point of no return.

#7: Your savings are literally zero

An absence of savings is a common-sense indicator of excessive spending.

A healthy savings account can help you survive unexpected expenses medically related and help you prepare for significant life events like starting a family or even early retirement.

If your savings account is empty or underfunded, you are spending too much and saving too little. Finding small opportunities to save money will help get your spending under control and your savings back on track.

FairPrice: Save up to 50% with discounted items from now till 17 March 2021

Is it just me, or is time passing at a much faster rate than before? It’s Thursday again, and this means we’re just a day to the weekend! Folks struggling with school or at work, hang on tight.

This week, we’re looking at a set of brand new deals at FairPrice. Loyal shoppers tuning in every Thursday can look forward to some savings on Häagen-Dazs mini ice cream cups, Hai Di Lao self-heating hotpots, and more.

Let’s get started!

#1: Haagen-Dazs Mini Cups Ice Cream – Favourite Selection

Price: 2 for S$27.90

Usual Price: S$17.90

Savings: S$7.90

We’re spotlighting the Favourite Selection from Häagen-Dazs. It’s made up of coffee, macadamia nut, matcha green tea, and caramel biscuit & cream. If those are not your favourites, how about giving Chocoholic Moments or Fruit Fantasy a chance to impress your taste buds? Each box comes with 4 x 100ml mini cups, so with this ongoing deal, each serving is yours to bring home at only S$3.49 (usual price: S$4.48).

#2: Hai Di Lao Self-Heating Beef Hotpot – Spicy

Price: S$7.95

Usual Price: S$10.90

Savings: S$2.95

Hai Di Lao fans, where art thou? Your self-heating hotpots are on sale! Most of us are used to the tomato beef or the spicy vegetable selections from FairPrice. Apparently, there are new additions to our go-to supermarket. Get your fill on spicy beef and tomato vegetables (sale price: S$6.50) from now onwards.

#3: I’m Kimchi Cabbage Kimchi

Price: S$6.50

Usual Price: S$7.20

Savings: S$0.70

Kimchi isn’t the cheapest side dish to have daily, but there are many health benefits tagged to the national food of South Korea. It’s packed with vitamins, minerals, and antioxidants, including choline and vitamin K. It’s also a good source of probiotics that can help facilitate digestion. Check your refrigerator right now and see if you’ve finished up all your kimchi. If yes, you will want to take advantage of this promotion to get your new batch of kimchi. Just be mindful not to store it past six months after opening.

#4: Farmpride Stone Baked & Frozen Pizza – Truffle

Price: 2 for S$7.75

Usual Price: S$5.35

Savings: S$2.95

Did someone mention truffle? Yes! In fact, it’s not just truffle but savoury truffle sauce and chewy mozzarella cheese. No matter how busy work gets, don’t forget to take a quick bite during lunchtime or tea break. For peeps who don’t fancy truffle (but why?!), you can go for these instead:

Margherita
Rocket & Tomato
Fungi Champignon

This particular promotion will last till 24 March.

#5: Lifebuoy Antibacterial Handwash – Activ Fresh (Menthol)

Price: 2 for S$2.90

Usual Price: S$2.90

Savings: S$2.90

Singapore has seen significant progress in COVID-19 numbers in recent months. Our Health Minister Gan Kim Yong shared that Singapore is making “steady progress” in its COVID-19 vaccination programme last week too. But still, the sneaky virus can strike back anytime if we aren’t careful with our hygiene habits. Keep up with frequent handwashing with the 1-for-1 Lifebuoy Antibacterial Handwash assorted products this week at FairPrice!

Shop online or check in-stores for the latest deals.

Must-buy items from now till 17 March 2021

Fresh picks at FairPrice till 17 March 2021

FairPrice’s weekly saver deals till 17 March 2021

8 questions to ask yourself before getting a personal loan

Are you in need of quick cash for an emergency? One of the most important factors when considering applying for a personal loan is the interest rate.

Whether you’re planning to go for the Standard Chartered CashOne Personal Loan (as low as 3.48% p.a.) or CIMB CashLite (3.5% p.a.), pause for a moment to think it through.

Ask yourself these questions before getting a personal loan.

#1: Why do you need the money?

There are many reasons you may wish to borrow money. Maybe you’re faced with medical bills or unexpected home renovations.

For those looking to pay off high-interest debt, applying for a personal loan would make sense too. For example, if you have a credit card debt at a 25% interest rate per year, it would be wise to take up a personal loan with a 7% interest rate to consolidate your debts and pay it off first.

Go ahead and get that personal loan if you know it’s for a good cause, such as reducing the interest.

#2: What is the interest rate?

Image Credits: Investopedia

Speaking of interest, here’s our next point.

Before you borrow money, understand that the lender will make a profit by charging you interest. According to Investopedia, interest is a charge applied to you, expressed as a principal percentage. And, of course, a lower interest rate is better for you as the borrower.

However, it’s not as simple as it seems. There are two rates to consider: Applied Rate (AR) and Effective Interest Rate (EIR). In short, AR keeps the loan principal as a constant over the life of the loan. In contrast, EIR calculates the reduction in principal as you pay down the sum.

Do more research if you are unsure of the terms.

#3: Are there other charges?

In addition to interest, there may be additional fees.

Possible charges include a fixed annual fee tagged to borrowing, a late payment fee if you miss a payment, or a change fee if you need to renegotiate your loan terms.

Some banks even charge an early repayment fee as early repayments affect a portion of their predicted profits. Be aware of these possible charges before you move forward with the application.

#4: Can you manage the loan repayments?

Image Credits: The Economic Times

When considering whether to take up a personal loan, you must decide if you can handle the repayments.

Once you know the interest rate, extra fees, and anticipated monthly repayment amount, make necessary calculations from your income to see if you can afford to pay it back.

To do so, you want to write out a detailed budget including your spending needs on groceries, household bills, and miscellaneous expenses. From the breakdown, see if you have enough leftovers to weather an unforeseen financial storm.

Yes, that’s for your rainy days.

#5: How will it affect your credit score?

Lenders use credit scores to decide whether to issue you a loan. Credit scores affect loan terms such as interest rates, tenure, and principal limits.

Your payment history, the ratio of debt to credit, the age and quantity of your accounts you own, and any derogatory reports such as loan defaults can affect your credit score.

If you think you can do without a personal loan this time around, then skip it. Ensuring that your credit is in good shape will help you get a better loan in the future when you seriously need it.

#6: What is your borrowing limit?

Image Credits: Yahoo Finance

Are you aware that The Monetary Authority of Singapore (MAS) has established a Credit Limit Management Measure (CLMM)?

It prevents financial institutions from lending new credit facilities to borrowers with debts greater than six times their monthly income. This credit limit helps to protect borrowers from getting into high debts too much to bear.

And of course, other than CLMM implemented by the authorities, other factors will also affect your borrowing limit. This includes your credit score, monthly salary, and the relationship you have with the bank.

#7: How reliable is the lender?

Be mindful that some people and institutions may not be worth your time and transaction in any situation involving money.

If a lender fails to run a credit check, seems disorganised, or cannot answer basic questions, be wary. You want to deal with a reputable banking institution and not one that agrees to a loan without reviewing your credit history.

#8: When will you get the funds?

Image Credits: Jmc Accounts

Most people seeking personal loans are racing against time. If that is a factor, you want to find out how long is the approval process. From approval to disbursement of the loan, speeds will vary from bank to bank.

Here are three personal loans promising instant processing times:

Final thoughts

The decision to borrow money should be considered carefully. Evaluating and understanding your loan’s reasons, the interest rates, loan repayments, and more mentioned in this article can help you make the best decision possible when seeking a personal loan.

What to do if you’re a victim of gaslighting

Emotional conversations and confrontations are never easy for people to manage. Whether it be angry partners or challenging parents, often when things get tough, it seems easier to shrink away and accept what the other person is saying even if you know it’s not true.

There’s a name for this type of manipulation, and it’s called gaslighting.

Not sure if you’re a victim of gaslighting? See if you can identify with these phrases:

“You must be imagining things.”
“Why so serious? I was just pulling your leg.”
“You have no idea what you’re talking about.”
“Are you insane? You know that’s not what happened.”

According to The Sociology of Gaslighting, a journal written by the American Sociological Review, gaslighting is defined as a type of psychological abuse aimed at making individuals feel crazy. It forces the victim to doubt their sense of reality and judgment after repeated psychological attacks from the abuser in question.

Responding to gaslighting can be both triggering and exhausting, depending on the intensity of the abuse you’re enduring. The issue has drawn attention across the years and even portrayed in the early years of cinema.

While there is still an ongoing debate on the proper response to gaslighting and how to prevent it, we’ve put together some ways to counter unfair manipulation from a friend, loved one, or even a colleague.

#1: Take a breather

Gaslighting usually brings on extreme emotions from both the abuser and the victim. If you’re suffering from its effects, you might cycle through an entire round of emotions including anger, fear, worry, and pain.

To not let those feelings overwhelm you, focus instead on giving yourself some space to calm down and take a breather. To regain focus at the moment, go ahead and take a short walk. Do whatever it takes to give you the strength to push back against those emotions.

#2: Gather proof along the way

Image Credits: abc.net.au

Collecting records or data of the times and things the person who’s often gaslighting you is a great way to help validate your feelings during and after the experience.

Begin by keeping pictures, screenshots, texts, emails, and even any property your partner damages while they’re with you. Keep a note of your conversations with gaslighters so you can look back as evidence when the situation calls for it.

In severe cases, you may even want to consider using your phone to record them talking so you can have something concrete to back you up where necessary.

#3: Voice your concerns calmly

For the Chinese-educated peeps, we’re sure you’ve come across this phrase – “老虎不发威，你当我是病猫”. It is an apt phrase to demonstrate how gaslighters might step all over you if you don’t speak up.

Voicing your concerns openly and calmly is a great way to let others know that you’re not going to put up with their abuse or disguised insults anymore. Don’t allow such people to confuse you or shake up your confidence.

#4: Trust your memory

Image Credits: unsplash.com

If your partner is labelling you as crazy or unstable for remembering a particular encounter clearly, trust your memory. Misremembering typically involves smaller details, not larger ones. Thus, learn to trust your gut and responses before you trust anyone else.

But it would be wise not to get drawn into the conflict. Instead of saying “I know I’m right” and get whirled up in the argument, say, “It seems like we recalled things differently, but I don’t want to bicker over it.”

#5: Practice self-care

Constantly being in the loop of gaslighting scenarios can significantly affect your nervous system. Give yourself a break by sleeping it off or focusing on overall self-care.

Engage in activities that can help you establish a good routine that prioritises your needs and makes you comfortable, so you can ready yourself to stand up against gaslighting.

Here are some general ways to improve well-being:

Journal down your feelings
Include positive self-talk or daily affirmations
Spend some quality time with your loved ones
Try aromatherapy yoga or attend a meditation session
Do something you enjoy (e.g. ice skating, crossword puzzles etc.)

#6: Talk to someone

Image Credits: unsplash.com

As a victim of non-stop gaslighting, you might be too emotional to view things objectively. As such, it would be wise to seek a second opinion. Talk to someone you trust and seek their insight or input on the situation.

Since they aren’t directly involved in the problem at hand, the chances are that they can offer you an unbiased perspective. Even if they aren’t able to provide any advice, having someone there for you physically or emotionally can help a bunch.

For those facing gaslighting at work, it’s best not to meet with the person alone. If time permits, invite a neutral and trustworthy coworker alongside the meeting to just sit-in and listen to the conversation. Limit your contact with the gaslighter as much as possible.

Final thoughts

Gaslighting can be tough to bear. Don’t face it alone! Besides heeding the above tips to help ease the situation, it’s also advisable that you seek a professional opinion. You can speak to a counsellor or a therapist about your issue and gain insights from the psychologically trained.

All will be well again! Take heart.

Do these 10 things if you want to achieve financial freedom

It is fair to say that most of us want to achieve financial freedom. To have enough savings and solid investments to afford the lifestyle you wish to can sound really attractive. Unfortunately, finding that freedom can be challenging.

Many people hold debt, overspend, or encounter challenges that make financial freedom challenging to achieve. However, all hope is not lost. Develop and maintain these simple financial habits if you want to attain financial freedom.

#1: Set specific goals

A goal like “I am going to be rich one day” is vague. A better way to set targets is to use the SMART technique. They should be Specific, Measurable, Achievable, Realistic, and Time-focused.

You should be working towards a SMART aim like “I am going to increase my savings by 1% a month for twelve months.” Write your desire down in a journal, and make it your mantra. Specific goals lead to accurate results, so cut out that fluff thinking.

#2: Write a budget

Image Credits: pixabay.com

Budgeting is essential for wise money management. Instead of squandering money away and realising reason why i’m broke, it’s better to start analysing your spending habits.

Ensure your bills are promptly paid and your savings are funded before allocating money to luxury expenses or feed your lifestyle inflation. Understanding where your money goes each day is the best way to control your urge to splurge.

#3: Clear your debts

With existing debts looming over your life, financial freedom seems like a faraway dream. When you owe financial institutions money, don’t forget that the interests are rolling.

To eliminate debt, you may want to try the pyramid strategy. Pay off your smallest debt first, then allocate that money to your next-smallest bill, and so on until you have paid your debts off altogether.

You may also be interested in reading our recent article on “top tips on how to pay off credit card debt quickly”.

#4: Automate your savings

Image Credits: Medium

We can’t emphasise enough because it’s one of the stablest ways to grow your savings. If you have a direct salary deposit from your employer to your bank account on payday, ensure a percentage of your income goes into savings right away.

It’s easy to set up recurring transfers to send money to a specific saving account every time you get paid, so you shouldn’t be giving any lame excuses. Once the automation is in, the routine will ease you into saving, so resist the urge to withdraw.

#5: Educate yourself on finances

We may be mistaken, but many of us do not have a good understanding of personal finances. Well, we can’t blame ourselves since it’s not taught in schools?

Wrong.

Take ownership to have at least a basic understanding of how money works – be it in the topic of debt or investments. Read books written by experts or consider taking some courses to develop your knowledge of money.

Speaking of which, do you know that Seedly is organising a Personal Finance Festival 2021? The most extensive personal finance event in Singapore is happening on Saturday, 10 April 2021, from 10am to 5pm. Read more about it here.

#6: Invest when you’re ready

Image Credits: Forbes

Investing in the stock market can seem scary, and it’s no wonder why some people have analysis paralysis.

Yes, the market is volatile and can occasionally crash. Unforeseen circumstances can cause even the most robust markets to shrink. But without risk, there is no return. As such, the stock market is one of the greatest ways to grow your wealth.

If you know not where to get started, how about beginning your journey through Robo-advisors? From OCBC RoboInvest to DBS digiPortfolio and Stashaway, there are several local options for Singapore investors.

#7: Monitor your credit scores

Your credit score is the first thing lenders will examine when you wish to make a major purchase, such as a car or a house.

Do you know how to grab hold of your credit report? You can get a copy from the Credit Bureau (Singapore). Each CBS Credit Report is chargeable at S$6.42 (inclusive of GST). Simply make a purchase online, at any SingPost branches, at the Credit Bureau office, or CrimsonLogic Service Bureaus.

Read up more information on credit scores and why they matter here.

#8: Maintain your health and assets

Image Credits: Medium

If you achieve financial freedom but then neglect your health, your hard work could go to waste due to unexpected healthcare costs. Constant exercise, eating right, and avoiding unhealthy lifestyle choices will benefit you in the long run.

While you take of your health, don’t forget to keep an eye on your things. Making sure that they last longer can help you save money.

This is true for everything, from mobile phones to laptops and cars. Keeping them well-maintained is likely to increase their lifespan and save you money on costly repairs or replacements down the road.

#9: Don’t exceed your means

Frugality is frequently on our radar, and you might have read about it in several money-themed blogs too. But you know what? It is an excellent trait for achieving financial freedom, and we’re going to play it like a broken record.

The ideal way to live within your means is to distinguish between things you want and the things you need. Just because you can afford something does not mean you need to buy it. If there’s a cheaper option out there, go for it.

#10: Talk to an expert

Image Credits: Great Eastern

Once you have accumulated some savings, talk to a professional about how to manage your money. Picking the right financial advisor who is legally obligated to act in your best interest instead of theirs is vital.

Final thoughts

While financial freedom may seem like a daunting goal to reach, it is well within your means to achieve it! Taking a disciplined approach and developing the abovementioned habits over time will help you get to your desired state of financial freedom in no time.