Expenses You Must Never Swipe On Your Credit Card

I have to admit! Credit cards are convenient, especially at this time. However, swiping your plastic card often costs you more money than other payment options. Regular charges from interest rates and annual fees are coupled by hidden surcharges. The latter are transaction-based fees that can add up!

You must maximize your savings and use your debit card as much as possible. On that note, here are the expenses that you must avoid charging into your credit cards.

#1: EDUCATION EXPENSES

Most schools and universities accept credit cards as a form of payment nowadays. Some even offer attractive interest rates. Just because it is available does not mean you have to use it. During my time, a diploma course in a private institution costs S$10,000 a year. Imagine paying a 3.5% interest per month? This will accumulate to about 51.11% interest in an annum. This is too much, if you ask me.

#2: GAMBLING EXPENSES

Gambling addiction is inside the Psychological manual of Psychologists and therapists. Gambling is there for a reason! It poses an uncontrollable damage on one’s finances and relationships. If you are thinking of using your credit card to cover your gambling-related costs, you are in deep trouble. Go home!

Contemplate on the monthly interest rates you will have to pay on the top of hidden fees. The interest rate will shoot up continuously until you pay your balance in full amount.

#3: MEDICAL EXPENSES

Many experts agree that you must use your Government medical allowance, non-retirement savings, and available cash to pay for medical expenses. If the COVID-19 situation is tough for you, you may get a low-cost loan option too. Medical expenses can immediately put you in a mountain of debt. You cannot simply turn to your credit card to pay for your entire hospital bill!

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As you take in all the above information, it is important to know how to avoid surcharges. Follow these tips.

a. Use a debit card to pay for your retail expense as it directly deducts from your bank account. Another electronic service that rarely incurs fees is NETS.
b. Book your flights using travel points. Use your travel points or air miles when you book for a flight overseas.
c. Use vouchers when institutions do not accept credit card points or rewards.
d. Link your credit card to PayPal. PayPal allows you to link your bank accounts in one place. This way, you will be able to pay the merchant free of extra fees.
e. Search for other businesses that offer zero interest rates on credit card transactions.

May these tips help you shop around!

Sources: 1 & 2

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Creating A Budget During Extraordinary Times

With non-essential establishments on closure and the economic crisis we are under, how can you employ a system to arrange your cash-flow better? The answer is strict BUDGETING.

A budget estimates your revenue and expenses over a period of time. By listing your sources of income beside your monthly expenditures, you will get an idea on where your money goes. This way, you can make smart financial choices and prioritize your obligations to reach your financial goals.

Creating a budget for the first time is like learning how to ride a bike. At first you are scared to ride the bike without training wheels. Eventually, you will be able to ride a bike on your own without qualms. Although you know cycling is healthy for you, you cannot just ride and go! You must learn about the basics of coordination and road safety. Creating a budget during a pandemic involves steps too. Here are the vital steps to create a working budget:

1. COLLECT YOUR DATA

Gather all the previous salary invoices, credit card statements, utility bills, bank statements, and receipts. Estimate how much you make and spend each month by using these necessary resources. Take note of the changes in the expenses due to the Circuit Breaker (CB) period and allow yourself to incorporate Government allowances too.

Start your budget by calculating your revenue since the CB. Add all your sources of income both from your part-time and full-time jobs (if any). Use your minimum monthly wage as a basis for your budget.

2. SET YOUR GOALS

Set S.M.A.R.T. goals and examine how you will be able to achieve each one. This acronym stands for Specific, Measurable, Attainable, Realistic, and Timely. I want to highlight that you must not make unrealistic and unattainable goals at this time. After satisfying S-R goals, you must budget according to your time-frame. List all your financial goals and divide them into short-term and long-term goals.

For goals to be specific and measurable, you must quantify what you want. For example, your goal is to increase the number of clients that will view your website. You may allot money to Facebook promotion or to hire a freelancer that will create your web design. I suggest that you focus on Marketing as it is more feasible given the limited physical movements that you can make during CB.

3. IDENTIFY YOUR FIXED EXPENSES

For many of us, lessors have postponed the payment of the April rent. You can only imagine the increase in your utility bills as you are mainly staying at home. These essential expenditures are called fixed expenses. Come May, you are looking at a wider range of fixed expenses.

Fixed expenses include rent, utility bill, and insurance. As they are stable each month, allocate a portion of your income to this category first.

4. ALLOT MONEY FOR EMERGENCIES

There should always be a budget for savings, especially for your emergency fund. Savings are your gateway to long-term financial goals and your safeguard against unforeseen events such as COVID-19. Set aside at a certain percentage of your revenue each month to help build a nice nest for your future. I personally recommend at least 10% but you have to give a percentage that you can maintain for the months to come.

5. USE A CLEAR SYSTEM

Help yourself navigate through the waves of budgeting by keeping a money journal or by downloading a digital budgeting tool. Supplement your budget with a calculator that enables you to know your cash-flow. It is called the Budget Calculator.

Then, download free apps that enable you to track your spending. Some of these apps are Mint and Spendee.

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No one knows how long this pandemic will last. Hence, you must be frugal with your expenses and eliminate unnecessary luxuries. Moreover, you may look for other ways to expand your income!

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Will Mixing Other Brands Of Petrol Harm Your Car?

As you may know, petrol prices in Singapore remain unchanged despite the plunge in oil prices. According to Bloomberg, a barrel of West Texas Intermediate crude was at a record low of US$1.69 last Monday (April 20). While, Brent crude was at US$25.92 compared to the US$74 usual price 12 months ago.

If you are happy with the performance of your usual petrol, that is great! You can stay loyal to that brand. However, unsatisfied customers may still search for another brand. To save money during tough economic crisis, will mixing other brands of petrol harm your car?

A short answer – it will not. Usually, any commercially available gasoline that passes industry standards would suffice for almost any gasoline-powered vehicle. Putting a higher-octane petrol into your car will neither help nor hurt your car’s performance despite the variations among engines.

The answer may vary from person to person, even among drivers who own the same vehicular models. You see, some people are strictly following the required octane fuel that their vehicles need. This is often due to the engine incompatibility with additive packages in premium fuels. Nonetheless, the brand that will give you the best fuel economy for your driving habits is the best one for your car.

To determine this, you need to monitor your fuel consumption over two to four full tanks. How often do you have to refill your car’s petrol on a monthly basis? Throughout this time, make the conscious effort to note down any driving conditions that you may encounter. The objective is to establish an average of your fuel consumption. The next step is to factor the cost per liter of your chosen fuel and switch to the other brand. Consider significant differences between the two.

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For safety purposes, please do not let your fuel run down the manufacturer’s recommended rating for your car. Check your owner’s manual thoroughly beforehand to cover all your bases. At the end of the day, it is all about choosing the petrol that will best suit your car and your needs. Most of the time, brands have very little to do with it.

Sources: 1 & 2

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Why Working From Home Mashes Dark And Light Sides

Ever wondered what it was like to work from home (WFH)? Wish granted! In line with the social distancing measures posed by the Government, most of the Singaporeans are now working from home. It allows you to earn Singaporean dollars despite being in your pajamas. However, what most people do not know is that this perk come with a price.

Your ability to glide through the setbacks of the home office depends on your personality. For instance, people who are disciplined or conscientious can easily work through the domestic tides. While, people who are procrastinators or crammers may have a hard time fighting the distractions at home. On that note, here are the light and dark sides of WFH.

LIGHT SIDE

It goes without saying that WFH enables you to become your own boss. Without a manager in sight, your deeply rooted passion will motivate you to be creative and productive. You make your own schedule and rules. To illustrate this, a 2014 Stanford University study allowed call-center employees to WFH.

Graduate student James Liang and his Economics professor allowed Ctrip’s employees the opportunity to work from home in a period of 9 months. Ctrip is a travel website owned by Liang himself. The study found that the remote employees had higher productivity levels (13.5%) and lower chances of quitting (50%) compared to their counterparts. Moreover, these remote employees reported that they are happier with their job. Imagine the output that satisfied employees produce!

According to Liang and his professor, the positive results may be attributed to the quieter space that the employees created for themselves. You are free to paint the walls blue or to have classical music on the background as you freshen up your own working environment.

Apart from that, setting your own work hours enables you to do more of the things you want such as baking or teaching your children how to read. You may also initiate a video conference with your workmates whom you miss.

DARK SIDE

As with everything, there are two sides of a coin. A pervasive drawback of WFH is the vulnerability to distractions such as noisy family members, accessible electronic devices, and abundant chores. Chores do not seem to end for some reason!

There is a considerable lack of separation between work and home during the initial stages of having a home office. Based on personal experience, there were days when I worked beyond my designated hours. The absence of a management enforcing strict working time may add to the pressure of grinding endlessly. Case and point, I work on weekends too.

Higher utility costs is inevitable if you barely leave your house. Lastly, you may experience negative states as you were plucked from the “interpersonal office environment”. I am referring to feelings of isolation, depression, and loneliness. This can be prevented if you stay in touch with your co-workers.

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The current situation opens our eyes to the wonders and the unpleasantness of working from home. Comparisons aside, accepting the reality and working with your at-home environment will enable you to embrace the work-from-home structure.

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