MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

Why Do People Think That You’re Poor?

Whether it is the way you dress up or the way you carry yourself, people are usually quick to judge whether you are wealthy or not.

I vividly recall the time when my university friend asked me hangout. In our tight group, she announced that I should be given the opportunity to choose the restaurant that night. I was flattered at first until she stressed that I was the “poorest” one. I soon realized that the girl was not a genuine friend. True friends support each other no matter what.

Her perception was influenced by the fact that I did not have a job at that time and was only relying on my parents’ allowance. Knowing how much money an individual makes can completely change your perception of them. As much as you want to deny that money makes no difference in your perceptions, it definitely does!

Image Credits: pixabay.com

People can judge your worth in a variety of ways including these:

#1: WHAT YOU WEAR

It goes without saying that your clothing leaves a lasting impression. In a snap of a finger, a person can determine whether you are a successful businessman or an unemployed student. Flashing your designer bags and watches can give you a heads up!

#2: HOW YOU TRAVEL

In some cases, your form of transportation can send a message about how much you make. People who travel via car are seen as more successful than those people who take public transportation. The same goes for people who travel via business class as supposed to travelling via economy class.

#3: WHERE YOU LIVE

Singapore’s land scarcity has led to living situations such as government housing, landed estates, and condominiums. The last two options are perceived as more lavish than living in HDB flats. Size and location matters!

#4: HOW YOU SPEND

Being frugal may be seen as a poor man’s strategy to survive. Some people feel the need to fly under the radar when couponing. While, others are ready to open their coupon binder and shop. A stranger may perceive your fondness for coupons as a desperate move.

#5: WHAT YOUR FACIAL CUES ARE

A study once compared the faces of different groups that vary per gender and race. As it turns out, the other factors mattered less. People carried a “wealthy appearance” due to their facial cues. Some faces seem to be more experienced and are deemed to belong to the poorer group.

According to Psychologist Thora Bjornsdottir, a PhD candidate at the University of Toronto, “the signals in your face about your social class can actually then perpetuate it”. People with a wealthy apperance are more likely to be hired for the job as it creates a self-fulling prophecy, which influences your interactions and opportunities.

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Whether someone seems poor or not, it is important to know that our feelings should be tied up with how people act with their money. Are they greedy or generous? Are they willing to loan to a relative or not?

5 Important Queries To Ask Before Getting A Credit Card

1. WHICH ONE DO I NEED TO APPLY FOR?

Like a tempting box of chocolates, all credit cards are not made the same. Be sure to shop around and to compare cards of similar types. You must know the necessary requirements, sign-up offers, rewards program, and other perks that come with it. Some cards may offer free airport luggage, while others may offer car rental insurance. Choose the benefits that suit your needs.

2. ARE YOU ELIGIBLE?

Applying for a credit card is a straightforward process that requires basic information such as your NRIC and primary address. Know which information and documents are needed to apply for said credit card. For security purposes, some institutions may extend their research by knowing your mother’s maiden name.

3. IS IT BETTER TO APPLY FOR A CREDIT OR DEBIT CARD?

The most significant difference between debit and credit cards is protection against fraud. If someone makes a fraudulent charge with your debit card, the money is directly deducted out of your bank account. It may take weeks to get a refund. When it comes to a credit card, you can dispute that the charges never left your account.

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Other benefits offered by credit cards include extended warranties, rewards programs, and return guarantees.

4. WHAT ON EARTH IS A CASH BACK?

Credit card companies offer different programs for redemption. When a credit card company gives you a certain percentage of what you put into your card then, that is called a cash back. You may be able to use this as a credit toward your current statement, to purchase gift cards, to get discounts when you shop online, or to deposit the money back to your bank account.

5. WHAT IS A STATEMENT CREDIT?

The positive amount on your credit card bill is called a statement credit. If you unintentionally overpay, many credit cards will apply a statement credit toward your future purchases. The act of applying for a cash back to a statement credit may lower your balance.

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Sources: 1, 2, & 3

Considerations On Travel Insurance Singapore When Traveling Internationally

You’re planning to travel to Singapore next month. Since most of your friends recommended you to visit this country, you obliged. You think that traveling can do wonders for your mind, body, and soul. And because of the stress you’re getting from home and work, you’re looking forward to this trip as your reward to yourself. After all, everyone needs to have a break once in a while, right? However, your expectations of stress-free and convenient travel can become the complete opposite if you experience emergencies along the way. How would you feel when your car had trouble on the way to the airport? Or when the weather suddenly changed after booking your tickets? Or when a family member has to be rushed to the hospital while you were traveling? If you’re traveling intentionally, it’s best if you do it with travel insurance.

Travel insurance is one kind of insurance which is intended to cover emergencies during your trip. These emergencies can include trip cancellation, lost luggage, medical expenses, flight accident and even other losses which you might have experienced while traveling. There are many companies which can offer travel insurance, but you should consider the following before deciding which travel insurance to pay for:

1. The type of coverage: Many companies offer travel insurance, but these companies have different types of coverage. As a customer, this information is something which you should carefully look into. For starters, consider the medical, trip cancellation and baggage loss policy of the travel insurance. You should also assess the default coverage and medical evacuation assistance of the travel insurance. These policies can extend your local medical care when you’re traveling to another country and can help you get home when you need additional medical assistance.

2. Determine what you need: If you’re eyeing to pay for travel insurance, determining what you need is key. Before you decide which travel insurance to get, consider your existing auto, homeowner and medical policies first. If you have health insurance, but your policy doesn’t cover you once you’re traveling overseas, it might be best if you also avail of a medical travel insurance. Comparing policies from your existing insurance and travel insurance can help you save from paying unnecessary costs.

3. Consider your trip: Where you’re going and what you’ll be doing there can help you decide which travel insurance to pick. If you’re traveling to a nearby state for the weekend and you’ll only need to hop on a train for 2 hours to get there, you probably won’t need travel insurance. But if you’re traveling internationally, like in Singapore, for weeks or months, travel insurance is a must. Keep in mind that the more days you spend in a new country, the higher the chances of experiencing baggage problems, medical emergencies, and travel delays are. As a customer, you should strive that all of these expenses during the trip can be covered as much as possible. You should work so your travel insurance can help you save money during the trip, not spend more.

4. Scout for options: Many companies can offer you travel insurance, and AXA SmartTraveller is just one. For you to end up getting the travel insurance tailored-fit for your needs and budget, scout for your options. Ask around from friends and family if they have had travel insurance in the past. Inquire from established companies for their travel insurance policies and compare prices. Doing this might take time, but this can ensure that you find the “perfect” travel insurance for you.

5. Read the entire policy before buying: When a document is written in fine prints, people tend to skip reading it – don’t commit the same mistake when you’re reading your travel insurance policy. Everything – yes, everything – in the policy should be read and understood. If you have any questions about the policy, ask the travel insurance agent about it. Don’t assume that you know everything as this can compromise your entire trip and even put your money to waste.

An Investment Worth Taking

There are many reasons why people decide to travel. Some travel because they’re seeking for adventure and adrenaline while others want to experience rest and relaxation in a new country. But regardless of the reason you want to travel, for sure, you want the experience to be memorable for all the right reasons. You want your travel to Singapore, or to any location, to become one for the books. Although travel insurance will require you to pay more from what you originally budgeted, it can help you achieve all of your travel goals. Travel insurance might be the only thing missing before you can finally bask in the sceneries of a new country!

5 Medical Mistakes That You Must Avoid

Financial security starts by avoiding these five common medical pitfalls.

#1: BY SHOPPING IN ONE PLACE

It goes without saying that pharmaceutical prices vary from location to location. You may be overpaying for a particular medicine bought at the same place. So, carefully compare the prices from the different providers to get the best price. According to Ministry of Health guidelines, every patient must get an itemized medication bill. Use this bill as a guide while shopping.

Do not hesitant to ask your physician for an affordable and efficient alternative, especially if you are taking medications on a long-term basis.

#2: BY NOT SHOWING FOR AN APPOINTMENT

Some of the doctor’s clinics or hospitals charge patients for not showing up. Said fees can be at least S$20. Remember, you are paying for their valuable time. If you cannot make it for an appointment, contact the office as soon as possible. Rescheduling can prevent your account from being overcharged.

Image Credits: pixabay.com

#3: BY SKIPPING THE GENERICS

New prescription drugs are expensive because they are Generic medicines are certainly cheaper and as efficacious as the patented medicines! Why is that so? New generic medicines are examined by the Health Sciences Authority to ensure that they have the same safety and quality standards as the patented ones. They must not only be chemically equivalent but also biologically equivalent in its effects within the patient’s body.

Interestingly, Singapore General Hospital once saved about S$900,000 after switching to the generic options of Gabapentin (for nerve pain), Alendronate (for osteoporosis), and Clindamycin (an antibiotic).

#4: BY TRASHING IMPORTANT TESTS RESULTS

There are many tests that the physician or lab technician can request. These tests include fMRI, CT scan, and Complete Blood Count test. It is important to keep a copy for yourself. If another doctor wants to run the same test, you can provide the recent copy of the test. Skipping another round of the expensive tests can save you a lot of money.

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#5: BY PAYING YOUR BILLS LATE

Late fees and interest charges add up! Over time, your bill can inflate like a balloon due to penalties. It is crucial to stay on top of your payments.

There are to actions that you can partake in. First, you may compare notes with the secretary to ensure that your bills are on track. Lastly, you can ask for a payment plan that works best for you. It is better to be upfront about your situation than to ignore it.

Sources: 1&2

Switching To An Electricity Retailer? Here’s What You Need To Consider

Since April this year, households in Jurong have been able to choose who they wish to buy electricity from, thanks to the soft launch of Open Electricity Market by the Energy Market Authority. One early adopter who exercised his choice to switch to an electricity retailer is Mr Luqman Haniff, a 30-year old with seven family members staying with him. We share about his journey here.

1. Household Electricity Consumption

One of the first things to look at before switching to a retailer is to find out more about your past electricity usage. That was exactly how Mr Haniff started off his Open Electricity Market journey. By looking through his past electricity bills, he was able to estimate how much his electricity bill would come up to if he were to pay by the regulated tariff or by the rate offered by electricity retailers. This helped him to choose a price plan that best suit his household’s needs.

What is the regulated tariff?

Let us take a look at how the regulated tariff is derived. The regulated tariff is reviewed every quarter by SP Group and approved by the Energy Market Authority (EMA). It consists of two key components – fuel cost and non-fuel cost. Fuel cost reflects the cost of imported natural gas while the non-fuel cost reflects the cost of generating and delivering electricity to homes. Below is a snapshot of the historical tariff rates.

Electricity retailers’ standard price plans

On the other hand, electricity retailers are free to customise their price plans according to their business strategies, current market conditions and the level of competition in the market. That said, the two main types of standard price plans are:

1. - Fixed Price Plan– You pay a fixed rate throughout the duration of the contract. This rate may be higher or lower than the regulated tariff.
  - Discount Off the Regulated Tariff Plan – You enjoy a discount off the regulated tariff throughout the duration of the contract.The rate may change every quarter in tandem with the prevailing regulated tariff.

Besides visiting the retailers’ websites to check on their offers, Mr Haniff made use of the Price Comparison Tool on the Open Electricity Market website to compare the different standard price plans offered by retailers. Like him, you can make use of this tool to help you decide on the plan that would be most suitable for you.

2. Consumer Needs

Different households use electricity differently and may also have different ways of managing their electricity expenses. For instance, a family who prefers to keep their electricity bills as stable as possible may find the Fixed Price Plan more suited for them since they could better manage their overall household expenses.

On the other hand, another family may consider going with the Discount Off the Regulated Tariff Plan if they prefer the certainty of enjoying savings no matter how the regulated tariff changes.

Before Making the Switch…

Now that you are almost on your way to signing up with a retailer, do take note of the following as well:

Fact Sheet

Before you sign up for a plan, your electricity retailer will provide a Fact Sheet which summarises key contractual terms of your preferred price plan such as:

Contract duration
Type of price plan
Rate offered by the electricity retailer
Payment terms
Early termination charges, if any

Ask the retailer to explain any terms and conditions that you are unsure of.

Consumer Advisory

Electricity retailers will also need to obtain your acknowledgement on a Consumer Advisory notice which outlines what you need to be aware of before signing the contract.

Promotions and freebies

To draw more customers, electricity retailers may offer freebies such as vouchers and cash rebates. While they may entice you to sign up with them, one thing to remember is that these freebies are usually a once-off benefit. Hence, it is always better to think long-term and make sure you stand to benefit from switching to a retailer in the longer run.

From the get-go, there seems to be a wide range of standard price plans offered by electricity retailers. However, upon closer examination, the plans mainly differ in terms of contract duration and rates and come with different sets of terms and conditions.

As you review your choices, find out about your electricity consumption patterns, compare the different standard price plans by using our check-list and finally, be sure to take note of the things to consider before making the switch. You will be well on your way to benefit from Open Electricity Market, just like how Mr Haniff did!

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