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6 Money Lessons To Avoid Being Broke

Nobody ever wakes up one morning and thinks, “I want to be broke.” A hefty loan here, a bad investment there, and a long credit card statement later – you have no idea how you landed in this state. You are living paycheck to paycheck without savings intact.

What can you do to turn the tide? Start by reading this article and applying these lessons into your life.

#1: THE POWER OF SETTING CLEAR FINANCIAL GOALS

Goals mark your direction in life. If you do not have a clear destination to work towards, it can be difficult to find the passion or motivation to save. Whether you are eyeing on purchasing a flat or figuring out how to pay off your debts, crafting a plan can get you there.

As you set your financial goals, consider making them SMART. Financial goals need to be specific, measurable, attainable, realistic, and time bound. Creating goals using the SMART method can help you ensure that you are working on an achievable goal within the timeline that you set. Stay on course!

#2: DON’T BUY WHAT YOU CAN’T AFFORD

Spending less than you make and buying what you can afford seem like simple personal finance rules. However, these are easier said than done. You can get distracted with the consumer-driven society that tempts you to live beyond your means. When this happens, a good rule of thumb is to save at least 15% of your income.

If you find it hard to save money, try paying for groceries and clothes with cash instead of a credit card. Take it one step further by using a budget per month. Withdrawing a fixed amount every month can help you to become more aware of your spending choices.

#3: EMBRACE THE FINANCIAL WORLD

The majority of personal finance lessons do not center around financial education, but on financial behavior. If you can modify your behavior with money, you can alter your financial future. Remember that you do not need to be a financial expert to prepare an emergency fund or to save for retirement. Start by building a solid financial plan and committing to it.

#4: THE IMPORTANCE OF INCREASING YOUR INCOME

Search for part-time jobs such as freelancing or dog walking to grow your income. You can take on other positions in the same company too. If you feel like you have reached the glass ceiling in your field, consider looking for new career paths to generate more income. Increasing your income can help your financial future.

#5: INVEST SMARTLY, AND NOT IMPULSIVELY

Investing is a good way to protect and grow your assets. However, the talent of wise investing does not come to us all. You may be succumbing to emotions and invest impulsively, hence you win big or lose big.

As a precaution, have an advisor who is trustworthy and credible. Research on your part is vital as well. It will give you the knowledge and confidence you need to make smart investments.

#6: BUDGET YOUR MONEY

It is understood that budgeting plays an essential role in controlling your spending, paying off debts, and staying on track with your financial goals. Creating a budget starts with adding up all your expenses for the month and subtracting that amount from your total income.

Image Credits: unsplash.com

Set monthly and daily spending limits to adjust and make up for any oversights. You can create a budget using a notebook, a spreadsheet, or a budgeting app. Use a tool with which you are most comfortable.

Sources: 1 & 2

7 Financial Resolutions That You Can Fulfill This 2022

For the lack of a better term, the period between 2020 to 2021 was “rubbish”. People all over the world had to deal with the adverse effects of the pandemic. Unexpected economic and social shifts occurred. Nonetheless, most of us are ready to bid farewell to the yesteryears.

While many Singaporeans are committing to eat healthy and to exercise more, here are seven financial resolutions that you can consider for a more prosperous year.

1. BROADEN YOUR FINANCIAL KNOWLEDGE

Books and audiobooks provide opportunities to broaden one’s financial knowledge. You can enter the inner workings of great entrepreneurs and investors by reading though the pages of books such as “The Intelligent Investor” by Benjamin Graham, “The Psychology of Money” by Morgan Housel, “Rich Dad Poor Dad” by Robert Kiyosaki, “Think and Grow Rich” by Napoleon Hill, “Raising Financially Fit Kids” by Joline Godfrey, and “The Richest Man in Babylon” by George S. Clason.

Create an achievable list of all the financial books that you want to finish within the year. Set a realistic goal for the number of pages that you can accomplish each week. Start now!

2. CUT DOWN YOUR WATER CONSUMPTION

Singaporeans do not typically worry about clean and fresh water. However, the global supply of consumable water is getting scarce with each passing year.

Consider reducing your water consumption by turning off the tap while brushing your teeth, using less water while gardening, installing a water-saving shower head, and only washing your clothes when necessary. Minimize your expenses and help save the Earth.

3. COOK MORE MEALS AT HOME

Increase your savings by cooking from scratch. Find recipes online or ask your loved ones for their specialties. Cooking more meals at home can reduce your restaurant or take-out expenses.

Calculate your food savings and consider putting the extra cash to your emergency fund or to pay off your debts.

4. BE PROMPT AT ALL TIMES

Time is a valuable resource. There is a reason why it goes hand in hand with money. As the job market becomes increasingly competitive, most companies have minimum tolerance for employee tardiness. Keep your source of livelihood by always being on time.

You do not need to exhaust your resources or skills to remain prompt. Simply set an appropriate alarm and adhere to your organization’s schedule.

5. UPDATE YOUR BENEFICIARIES

With the uncertainties of the modern world, it is important to revisit your beneficiary designations. Adding a beneficiary to your accounts and policies can help ensure that your assets will go to your desired people. Align your will (i.e., last will and testament) to your accounts and insurance policies.

6. SEARCH YOUR HOME FIRST

Search the contents of your home, before committing to a major purchase. There are many ways to use your resources. You just need to be creative and hands-on!

For instance, you may use your old drawer as your baby’s diaper changing table. You can also spruce up your walls by purchasing Very Peri wallpaper online.

7. MAKE THINGS SIMPLER

All of us are drained because of the massive chaos that recent years have brought. Reduce your worries by cancelling or closing the accounts or cards that you no longer use. Then, set up automatic transfers.

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Some financial institutions allow the employer to automate your salary in your bank account. Patronizing this method will lessen the temptation of immediate spending.

Make A Personal Budget In 6 Easy Steps

A personal budget is a financial summary that tracks your income and expenses for a certain period, which is typically a month. The word “budget” is often associated with limited spending, but a budget does not have to be restrictive to be effective.

Having a personal budget that you can review on a regular basis enables you to prevent overspending. Start with these six simple steps.

#1: GATHER ALL YOUR FINANCIAL STATEMENTS

Get a bird’s-eye view of your financial situation by gathering all your financial statements. Include your bank statements, investment accounts, recent utility bills, credit card statements, receipts from the previous months, loan statements, and other receipts. The more information you can retrieve, the better.

#2: DETERMINE YOUR MONTHLY INCOME

Determine how much you make in a month. If you have a fixed salary, you will find information in your pay slip. If you get paid bi-monthly, you simply need to multiply your pay slip into two.

If you have more than one job or you are self-employed, you must determine your net income differently. Calculate your net income by examining your two most recently filed tax accounts. Add the two figures of your net profit together. Then, divide the total by twenty-four. The definitive answer is your average monthly income.

#3: CREATE A LIST OF YOUR MONTHLY EXPENSES

There are two types of monthly expenses – fixed and variable expenses. Fixed expenses are expenses that you encounter every month such as rent, car payments, and utility bills. While variable expenses change from month to month. Variable expenses include groceries, gifts, and shopping.

Write down a list of all the expenses you expect to have during a month. Do not forget about the childcare, transportation, and entertainment costs.

#4: TOTAL YOUR MONTHLY INCOME AND EXPENSES

Get the total of your monthly income and monthly expenses. If your income is higher than your expenses, you are off to a good start. You will have extra funds that you can put aside for retirement savings or debt repayments.

If your expenses are higher than your income, you need to make some changes. Find out which categories you are overspending on.

#5: EVALUATE YOUR SPENDING HABITS

Add up your total spending per expense category. Which category do you overspend on? You can get the percentages per category to understand how much of your income is going where.

#6: MAKE NECESSARY ADJUSTMENTS

After covering steps one to five, you will be able to highlight the spending areas that you need to eliminate or reduce. For instance, you can cancel your gym membership or lower your handphone’s postpaid plan.

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Amend your budget and align these changes to your financial goals.

Sources: 1 & 2

Apple Nears the US$3 Trillion Market Cap

Apple, the American tech giant, is inches away from reaching a market capitalization of US$3 trillion dollars just over a year after it surpassed the two-trillion mark. This incredible milestone is as big as the equity markets of the United Kingdom or Germany.

After a decades-long run as one of the world’s best performing stocks, shares of Apple were up at 1.6% at US$174. The company needs to trade at US$182.85 to hit the goal. Nonetheless, the stock risen to about 30% this year on top of an 80% jump in 2020.

Oanda’s Senior Market Analyst Craig Erlam said: “There’s so much still to come from Apple, which makes you wonder what milestone they’ll pass next and how big they can become.”

Back in 2018, Apple reached the US$1 trillion in market capitalization and it took the company two years to double that valuation. Reaching the three-trillion mark will establish a strong rally that has been fueled by investors betting on its brand. Moreover, its peers in the trillion-dollar club include Microsoft, Amazon, and Tesla.

“Apple does seem to be more immune to the ebb and flow of economic forces just because of this really strong brand. Its new product pipeline is pretty strong too,” according to Hargreaves Lansdown’s Senior Investment and Market Analyst Susannah Streeter.

QUICK TRIP DOWN MEMORY LANE

Image Credits: pixabay.com

Owing it to the steady stream of products that attracted a loyal following, Apple became the world’s most valuable business. In late 2000, the company had a market value of merely US$4.5 billion and the investors were fleeing the stock. Nowadays, investors cannot get enough of the stock. The stock has breached Wall Street’s median price target by US$4, with most experts and analysts covering the stock rating it buy or higher.

Despite the wobbling status of markets because of higher interest rates and the effects of the coronavirus pandemic, investors view Apple as a relatively safe place to keep their money due to its consistent sales growth.

You see, Apple is “kind of in that sweet spot of not being too expensive, having a nice mix of products and services, and being a great innovator across its entire product line,” said Ingalls & Snyder’s Senior Portfolio Strategist Tim Ghriskey.

Sources: 1 & 2

5 Things To Consider When Buying Or Renting A Flat

Whether you are choosing a flat for rental or purchase, finding a home can be challenging and time consuming. Various expectations including interior preferences, budget, and additional charges, as well as location and safety should be considered by you.

#1: THE HIDDEN CHARGES

Ensure that all the clauses of the documents (i.e., including the penalty clauses) are read and understood. Is the builder required to pay you penalty in case you do not receive the renovated flat within the grace period?

Additional expenses such as stamp duty, home loan processing fee, and safety deposit fee should be kept in mind.

#2: THE LOCATION

Location, location, location! Find a flat that is near to a public transportation station, if transportation is a priority. Consider if your shortlisted flats are close to your place of education or employment.

Flats that are conveniently located near shopping malls and community parks are ideal. Examine how the location of the flat will affect your commute to school or work as well as your commute towards your friends and family.

#3: THE BUDGET

Be honest with yourself and calculate your budget. Utilities are not usually included in the rent or purchase of a flat. Therefore, it is important to calculate the added costs of utilities when determining whether a flat suit your budget.

The gap between renting and owning a flat is massive. Stick with the guidelines of how much you can afford and avoid defaulting for non-payment.

#4: THE SECURITY

Lower floors or stories do not offer as much privacy compared as the higher ones because they easily be accessed. If your building is located near the main road or a busy area, higher floors or stories tend to be more peaceful.

Please examine the security arrangements in the housing complex (e.g., CCTVs) if you are keen on staying on the lower floor or story.

#5: THE INTERIOR

The interior’s cleanliness demonstrates how responsible the property owner is. However, there is more to see beyond its freshly painted walls. You should check the water pressure and find out whether the windows and doors are closing well.

Image Credits: pixabay.com

You should be given an inventory if the property was listed as fully furnished. During the first visit, you may establish whether all the items are part of the contract.

Sources: 1, 2, & 3

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