Personal Finance

Although money can seem occasionally to be easy in Singapore, many people are still concerned with saving their wealth for later. The simplest way of earning money is still saving money – this principle will also hold for 2015. No matter what position on the social ladder one is sitting on – savings and earnings are going hand in hand. The international stock market appears currently to be in a better condition than many experts had expected a few years back. Global indices are rising and markets seem stimulated, but they are hungry for more. There are, however, continuously increasing expenses, such as the recently raised credit card interest rates in Singapore. In order to stay financially on track and pay off debts on time, one should start into the New Year with certain saving strategies. When wanting to save money, one should be aware of the fact that mere saving is not effective enough. The combination of saving and investing will not only earn and save money, but also protect its value.

As the credit card interest rates in Singapore have been raised quietly in the end of last year, the hard-earning citizens have to find new ways not to loose more money. Paying the minimum rate of your credit card bill every month, will leave you in the long run with more debt than before. Even paying more than the bare minimum will not do the trick. If the full payment is not made, the interest rates will every month calculate a new and higher debt, due to the interest rate of the month before. This accumulated interest rate can let your debt rise quickly higher than initially planned, if one is only paying the minimum rate or slightly more. The debt will grow proportionately until the full amount is paid back. As the credit card interest rates have been raised about 1%, the debt is even bigger now. Therefore, it is important to pay off the credit card bill in the end of every month. In case there is no other option than stretching the credit card, one should consider a 0% interest instalment payment plan in order to save money. The credit card interest rate can be very tricky and quickly become a vicious circle that is getting increasingly harder to break out of.

Another option for saving money in 2015 is a saving account. An extra amount on the bank account can easily become a save investment. Let the money work for itself. Many experts presume that the saving account interest rates in Singapore will go up. Some banks already have some interesting offers. OCBC has a 2.35% Bonus & Saving Account offer that not only saves your money, but also makes you some more. If one has S$10000 or even more than that, one could potentially get a high and profitable interest rate for the OCBC savings account. The interest rate will go up if no monthly or quarterly withdrawals are made. The very basic rate is only 0.05%, which isn’t much at all and frankly won’t do much to your savings. However, without monthly and quarterly withdrawals, but with additionally added funds of S$10000, one can get a rate of 2.35%. But there are also other banks offering interesting rates. One other example is the 2.08% DBS Multiplier Programme. Extra amounts of Singaporean dollars that won’t be needed throughout the year, should be therefore stored on a savings account. One should watch out for changing rates throughout the year and check with one’s bank for specifics.

One should check its options though. Purely saving without investing might not do the trick. Many Singaporeans are however very interested in long-term saving programmes, such as emergency funds. If one was to save S$10000 in a year, one does have a substantial sum. However, this amount of money will surely not be the same in a decade. The inevitable inflation will decrease the value of the S$10000 eventually. Saving accounts should therefore not be the only long-term option for one’s money. Saving account can be an ideal way to save large and momentarily unneeded amounts of money. Storing money on a savings account is, however, only advisable and beneficial, if that particular amount of money will remain for a long time on the saving account. If there is a chance that one might need the money throughout the year for some reason or another, the savings account isn’t the proper place to store it. Frequent monthly or quarterly withdrawals will reduce your interest rate drastically. Furthermore, in order to protect you money from losing its value due to inflation, one should be investing as well. The combination of investing and saving is ideal.

Another trick to start 2015 by saving some money is connected to one’s car insurance. Firstly, it is advisable to check the individual policies of the car insurance. Often there are unnecessary policies that one can get rid of. Checking the car insurance’s polices one might discover that one is already covered for the same event twice.  Reducing the policies to the bare minimum can help to save a lot of money. Furthermore, there are more tricks to save money with the car insurance. Increasing the deductible of your car insurance will course the premium rate of the insurance to go down. This saved money can be immediately put into a saving account and eventually used for another purchase. When wanting to buy a new car, one could start getting the money for it together a year or more before the actual purchase. Reducing one’s car insurance through different means will save money that can already finance the new car. When having finalised the purchase, one should immediately double check the insurance and eliminate all unnecessary policies. This way one can save straight from the start.

Starting the New Year by saving money isn’t the most difficult and unrealistic venture to do, but it is the combination of saving and investing that it actually makes it profitable and valuable for the individual. A saving account can be lucrative, but only if it is used properly. Therefore, one should be sure to invest and save at the same time.

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