One of the greatest English novelists, Charles Dickens, encapsulated the unpleasant prowess of procrastination. His advice was “to never do tomorrow what you can do today. Procrastination is the thief of time.” Procrastination feeds into your weakness by following immediate gratification.
You are aware that it affects some areas of your life such as being late for a meeting or missing the billing deadline. However, you might not realize that constantly avoiding responsibilities can cost you money. Start changing your ways! It may seem trivial now, but keeping your financial goals on hold will affect your long-term savings plan.
LEARN TO ACCEPT YOUR BOUNDS
“I do not feel like doing it right now!” “I will be more prepared tomorrow.”
How often have you used these excuses to put off the tasks that you can easily accomplish today? For some people, avoiding the difficult tasks by making excuses became a form of coping (i.e., an unhealthy response). It is time to face the music! You will never be fully ready to tackle your financial goals.
The best thing that you can do right now is to examine your financial situation. Identify the amount of cash that comes in and goes out. You may either download money tracker apps or seek the help of the professionals.
CONSIDER THE PRESENT TIME
A study from the University of Chicago found that participants were more likely to initiate action if they view that the task happens at the present. Apply this thought by determining what phase you are on.
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It is easier to track your tasks by making a simple “to-do list” that even includes the tasks you are avoiding to pursue. Then, write the deadlines together with every task. Even if the deadlines you set are sooner that necessary, it will help your cause.
BREAK IT DOWN INTO SMALL CHUNKS
One of the reasons why individuals put goals aside is its intimidating and overwhelming nature. Listing vague or huge goals can immediately discourage you. Breaking down your financial goals into action items is a good idea. Make these items realistic, manageable, and concrete.
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For instance, you aim to make S$2,000 by Christmas instead of saying that you envision having S$500,000 by retirement. Set up a reward system after you finish an action item.
My personal definition of relaxation includes a day at the hair salon. To most people, it is a place that stimulates mixed emotions. There is always a certain degree of excitement hinted with doubt about the final results. Will you be satisfied with the makeover?
Furthermore, there are plenty of mistakes that you can unknowingly make. These said mistakes may cost you more money (and emotions) that you actually expect!
Here are just some of them:
#1: BY NOT DISCLOSING YOUR HAIR HISTORY
I am one of those people who pamper themselves by dropping by the hair salon every now and then. I was committed to maintaining my “Ash Blonde” hair for a year. However, I decided to dye it black last February. I did not settle for a brownish hue. I dyed it purely Jet Black! It was one of the few hair decisions that I regret the most. Dyeing my hair black made it hard for succeeding colors to seep in.
After a few months, I decided to visit the nearby salon to lighten my hair. I told the stylist about my dilemma and he was not able to fix my faux pas. I was so disappointed as I paid more than S$50. I realized that the only way to reach my goal is to bleach my hair. I went to a salon in the city center and paid thrice the amount to revive my light hair. I disclosed my hair history starting from the treatments I had last year. Thankfully, the senior stylist brought life to my previously dull locks.
Much like disclosing your medical history to your physician, you must share a brief history of your hair to your stylist. A successful makeover depends on the stylist’s knowledge of your past treatments. Leaving some information can affect the formula that he or she will choose. You do not want to have an allergic reaction to the chemicals that the salon uses.
#2: BY KEEPING MUM THE ENTIRE TIME
There was a significant fraction of my life where I kept quiet in the chair and witnessed as the stylist ruins my hair. I tell him or her that I adore my new ‘do, but go home bursting into tears. I know that I am not alone!
There are two types of people: those who complain and those who settle. The later wants to avoid conflicts and prefer Smooth Interpersonal Relations (i.e., as Psychologists call it). These type of people would rather wear a hat the next day than confront the person about cutting several inches too short. This conflict avoidance may be destructive to your pocket.
The haircut or the style that you got from the stylist will be sported (and tolerated) for a period of time until it grows out. You can always correct it and pay double for the style that you wanted in the first place. So, encourage adjustments if necessary. Do not be afraid to speak up!
#3: BY FAILING TO BRING PICTURES
My frequent visits to the hair salon highlighted that the stylists reached my intended results better when I brought visual representations of the looks that I desired. There are limited ways to describe Selena Gomez’ bob cut. And even so, you may fall short with words. Carrying multiple photos of a distinct style will help the professional to create a blueprint for making it right for you. They can imagine whether a particular look will suit your face shape and physique.
There is no doubt that most stylists are visual learners. Thus, bringing pictures will dissolve the confusion that you may have from describing a color as golden brown or yellow blonde. Oh! Can you tell the difference?
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You cannot walk in a prestigious hair salon and expect the stylist to perfect your desired look. At the end of the day, the skilled individuals can help you look good if you help them to do that too.
Everyone experiences a certain degree of money woes. The differences depend on how we deal with each financial issue. On that note, here are just three of the most common ones that we may all face at some points in our lives.
#1: ADJUSTING TO THE POSTNATAL BUDGET
Congratulations to you and your spouse! You just added life to the thriving population of Singapore. The next challenges at hand are the costs that come with it. Raising children, as expensive as it is, causes multiple changes to your household budget. New categories include medical costs, newborn clothes, and insurance contributions.
The significant cost of delivering the baby (about S$10,000) is just the beginning! Tackle each day with ease by knowing how much you will be spending in the next couple of months. You need to repeatedly feed, clothe, and nurture your children for at least 21 years. Preparing a financial checklist will help you fulfill your expected costs.
Whether you want to believe it or not, there is a particular cohort that is at risk of earning insufficient salary. This is none other than the elderly working-class women. The 2014 Labour Force Survey highlighted that more than 7 in 10 participants (i.e., 100,000 Singaporean women aged 60 and above) made less than S$2,000 per month.
Lower earnings adversely affects one’s retirement adequacy as the country operates on the salary-based pension system. These seniors are still working because they need the money and they did not have enough money saved.
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There are two ways to deal with this financial situation. First, you may negotiate a pay raise. If you do not ask then you will not get it. Employers know that they play a part in ensuring that older workers return to the workforce with decent wages.
Secondly, you may get another job on the side. With our access to modern tools, you can make extra money by creating an online business. Free websites such as Carousell and Tictail enables you to showcase your products.
#3: RISING ABOVE UNEMPLOYMENT
Unemployment is a worldwide phenomenon. The economy continues to narrow down jobs at an alarming rate. This means that you need to get in line with about a hundred of job seekers for the same post. A good place to start making connections is LinkedIn (i.e., a professional networking site). Moreover, you may ask your family and friends if they can recommend you to work for their companies. Do not be shy!
Absorb the words of Nancy Collamer, creator of Layoffsurvivalguide.com.
“You need to figure out what it is that you want to do and are most qualified to do, then identify employers and companies where there appears to be some level of growth or opportunity and identify ways to network your way into the company.”
I believe it is safe to say that “Insurance” is an unfamiliar territory for most Singaporeans. For young adults who recently joined the workforce, it is a necessity that comes with the new responsibilities of adulthood. Weighing your insurance options is just the start!
You may have encountered policy terms such as premiums and deductibles. However, do you know what each term means? I shall focus on the former.
DEFINING INSURANCE PREMIUM
In its simplest form, an insurance premium is the amount that an individual or an institution must for upon signing on a policy. It represents a bind that the insurer must provide coverage for the claims made against the policy. More so, it is the income earned by the insurance company.
HOW INSURANCE PREMIUM IS CALCULATED
There are many interacting factors that affect the prices of the insurance premium. For starters, the price heavily depends on the type of insurance (e.g., Critical Illness policy or Car Insurance policy). Other factors include the area where the policyholder lives, the likelihood of claims being made, the behavior of the policyholder, and the amount of premium offered by the competition.
Let us take the Life Insurance policy as an example. Various factors affecting your specific premium include the:
a. policyholder’s age at present time,
b. scope of coverage that the policyholder buys,
c. length of the policy,
d. and the policyholder’s life and health expectancy.
WAYS TO ACCOMPLISH PAYMENT
Singaporeans were blessed with a number of options when it comes to paying for the insurance premiums. Some insurers require the policyholder to pay for the total amount before the coverage starts. While, others offer installments (e.g, semi-annual payments).
It is vital to highlight that you may encounter situations that entail the increase of insurance premium. Firstly, it may increase after the policy period ends. Secondly, it may increase if you made claims during the previous period. Lastly, it may increase if the risk associated to the type of insurance gets more pervasive.
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THE BOTTOM-LINE
In summary, the insurance premium is the amount of money charged by the insurer for an active coverage. The total amount depends on multiple factors including age and address. Individuals may pay premiums annually or in smaller amounts over a year. Also, this amount changes over time. The policy is usually voided when the insurance premiums are not paid.
The trading of currencies on the open market serves many practical purposes. It enables individuals to purchase local coinage when visiting a different country or region. It allows governments to regulate the supply of money within their own economies. It also provides an opportunity for traders to realise a profit, simply by speculating on the price movements of different currency pairs. Each of these contributes to the vast size and scale of trading activity that occurs within the foreign exchange market every single day.
How big is the forex market?
The FOReign EXchange (forex) market is is the single largest financial market on the planet, when measured in daily trading volumes. Each day, around $5.3 trillion worth of currency is bought and sold on the open market. That equates to more than $220 billion of trading activity every hour.
The volume of forex trading far exceeds that of the bond market or the stock exchange – and even the economies of entire nations.
The New York stock exchange, for example, would have to trade for 30 days to match the single-day trading volume of the currency market. The combined annual GDP of Russia, Italy, and India is approximately equal to one day’s forex trading.
A brief history of forex trading
The trading of one currency for another is an ancient phenomenon, but the modern forex market truly emerged in 1971, with the completion of the Smithsonian Agreement.
The agreement allowed the central banks of ten major economies to buy, sell and issue currency in a way that would allow their money to fluctuate in value by 2.25 per cent against the US dollar. The Smithsonian Agreement is widely accepted as the first step towards the free floating exchange rates that we recognise today.
The proliferation of web-based technologies in the 1990s proved another significant milestone in shaping today’s forex markets. Access to the internet gave private individuals the means to not only access markets, but also the educational resources that would help them to understand forex, and how to start trading. Since the end of the 1990s, the number of forex trades that are executed through an online platform has grown exponentially: accounting for as much as 23 per cent of all forex activity by 2016.
Digital trading platforms have also eased the transition to an era of automated trading: where algorithms are used to calculate and execute trades far quicker than any human could hope to achieve. The forex market grew 20 per cent between 2007 and 2010 – and much of this expansion has been attributed to the development of high frequency, algorithmic trading machines.
Who are the big players?
This rapid expansion of the forex market has caused some of the established currencies and institutions to lose a degree of significance in recent history. Yet the biggest players in the foreign currency trade remain some of the more familiar names in the world of finance – for the time being, at least.
The most commonly traded currencies by share of total transactions are the US dollar (which accounts for more than 87 per cent of all trades), the Euro (31 per cent), and the Japanese Yen (almost 22 per cent). Of these, EUR/USD is the most commonly traded currency pair, accounting for 23 per cent of all trades in 2016.
International banks dominate forex trading: the largest six banks account for half of all transactions; the top ten banks are responsible for more than 65 per cent of trades. Citigroup (13 per cent), JP Morgan, (9 per cent), UBS (9 per cent), and Deutsche Bank (8 per cent) are the four most active financial institutions in the forex market.
Where is forex traded?
Forex is a truly global marketplace. Four major trading centres – in London, New York, Tokyo and Sydney – provide access to the currency markets 24 hours a day. Of these, London sees the highest trading volume, accounting for 37 per cent of all currency trades.
However, while the City of London is responsible for a high percentage of daily total trades, it does not regulate or control the market in any way. In fact, the trade in foreign currency is not facilitated by any single authority or centralised exchange at all. Instead, traders can buy or sell currency pairs directly with other traders in the market. This form of direct exchange is known as an over-the-counter (OTC) market. OTC trading is considered one of the primary factors in the growth of forex: independent investors can access and participate in the market from any location, at any time of the day or night.
The foreign currency market has undergone dramatic change, and experienced rapid growth, throughout the past five decades. It has adapted its role to make use of new technologies: permitting free-floating currency valuations, and enabling private individuals to participate in markets without having to leave their homes.
Today, the forex market continues to evolve, and represents one of the most open and democratic trading opportunities on the planet. But the buying and selling of world currencies represents more than an investment: it is helping to make efficient world trade a reality.
Anna Agoncillo
MoneyDigest
