Personal Finance Archives | Page 39 of 148

Ask Your Insurance Agent These 4 Important Questions

Life is full of uncertainties. We are not aware of what will happen in the next hour or the next day. Despite this, we try our best to plan out our lives as best as we can. As you plan for the future, you may consider getting an insurance. Insurance is a means to cushion against financial losses and unexpected events.

Complete your financial plan by finding a suitable insurance policy that will cover your hospital bills, critical illnesses, and other needs. Do your research and ask your insurance providers for guidance to find the most suitable insurance plan for you.

On that note, here are four important questions that you may ask to your insurance agent.

#1: WHICH TYPE OF INSURANCE DO I NEED?

The distribution of insurance is regulated by the Insurance Act. Under this act, no one is allowed to establish an insurance business unless licensed or authorized by the Government. It also entails the duties and responsibilities of the insurance agents such as arranging contracts of insurance and collecting or receiving premiums on policies in Singapore. The insurance agent helps customize your insurance policy to best suit your needs.

There are many types of insurance policies. While endowment policies focus on savings, protection-type policies protect you from unforeseen circumstances. Do your research prior to meeting your insurance agent. As you become transparent with your financial circumstance, you may ask more questions surrounding the differences in their insurance policies. For instance, you may ask your agent to elaborate on the specifications of both their health and life insurance policies. With so many types of insurance around, you cannot blame a person for getting confused at first!

#2: IS IT ESSENTIAL TO PAY MORE WHEN MAKING A CLAIM?

Let us put a spotlight on health insurance. Although insurance policies help cover most of your hefty hospital bills, you can expect to pay some portion in form of deductibles and co-payments. Deductible is the initial amount that you need to pay for claim/s made in a policy year. You need to pay the deductible before you can get a payout from your insurance. On the other hand, co-payments are crucial principle in the design of health insurance. Co-payment is the amount that you need to split with the insurer after paying your deductibles.

Depending on your insurance provider, some health insurance policies may not cover certain illnesses or procedures. For instance, many health insurance policies will not pay for your cosmetic procedures. Ask your insurance agent about this. Know the scope and limitations of a policy before committing to one.

#3: HOW MUCH DOES THE INSURANCE COST?

Whether you are getting a car insurance or a life insurance, it is vital to scan your options in order to find a policy that fits your financial capabilities. The cost of life insurance, health insurance, car insurance, etc., will vary.

From a general perspective, the price of insurance depends on the risks. People who are working in high-risk jobs (e.g., factory workers or construction foremen) may be subjected to higher premiums. The insurance practice of charging higher premiums for certain occupational classes is called occupational loading. This practice is most commonly found in personal accident insurance. Do note that the premiums will also be affected by other factors such as the number of years that you need to have the policy in place.

Ask your insurance agent about this. If you feel that you cannot afford all the insurance coverage available, you do not need to worry. Your insurance agent will help you to prioritize your needs.

#4: HOW OFTEN SHOULD YOU UPDATE YOUR INSURANCE POLICY?

Throughout our lives, our goals and needs will change. This is why experts suggest to review your insurance policies every year. You may ask an insurance agent or a financial advisor for advice regarding the possibility of increasing your insurance coverage as years pass.

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Gradual increase in your insurance coverage may help prepare for the unexpected health problems that might come as you age.

Sources: 1 & 2

It’s time to consider having a money date

Even the strongest couples can experience tension when the topic of money presents itself. Money can bring hidden differences in opinions, priorities, wants, or needs to the surface. Though in all honesty, it can be pretty uncomfortable to talk about it with your partner.

However, avoiding the topic altogether will not solve any problems. Money touches every aspect of our lives since we need it for our daily living. We also require cash for well-deserved luxuries such as staycations or cruises.

It’s crucial to allocate the right amount of money towards expenses, savings, and splurges to thrive. And in a committed relationship, we cannot do it alone. That is why what you might need is a money date.

What is a money date?

Simply put, it is a date with money as the main highlight. Yes, we know it’s tough even to start. But Kathy Entwistle, the founder of Entwistle Partners, a financial specialist team, says that it gets more accessible and comfortable with every little step.

Having a constructive conversation with your partner about your monetary resources and financial goals can bring both of you to better wealth management and freedom in the future.

One of the best ways to have this conversation is to set up a time with your partner, just like how you would do for a typical date invitation. A scheduled time and safe space where you and your partner can talk openly and honestly about money issues is the first vital step to take.

When should we arrange for a money date?

You and your partner should begin having money dates when you are ready to build a future together or you’re moving towards a committed relationship.

However, even if you’re already married, it’s not too late to start. You know the famous phrase, right? Better late than never. Regular money dates are essential, so you can adapt to changing financial circumstances and chart your progress towards your current goals.

Why should you consider having one?

a white mug with the word 'conversations' printed

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Mentally, don’t you agree that it’s easier to look forward to a date than a discussion? Scheduling a date ahead of time gives you and your partner time to reflect, get into the necessary mindset, and prepare yourself for potentially problematic money issues surfacing in your conversations.

A money date is also an apt time to gear yourself to discuss your values, goals, plans, and existing resources. Being willing to discuss any finance-related problems freely can help you and your significant other feel less stressed about the topic of money, in general, going forward.

Is there an ideal spot?

Unlike a traditional date, a money date requires an atmosphere conducive for serious discussions. It should be set at a time and a place where you and your partner can be comfortable and enjoy some privacy at the same time.

With that said, the latest cafe, rooftop bar, or restaurant may not be an ideal environment for a meaningful talk surrounding money. Your home can be the right place, and you could even choose to have your discussion over a glass of wine or a cup of tea to set the mood right.

If you have children at home, find a way to get privacy by considering dropping them off at your parents’ house for a few hours.

How do we kickstart the conversation?

Entwistle recommends that we begin with the bigger picture. These questions could guide both of you to find out what matters to you in life and the role of money in it:

What are our priorities?
Is it taking care of our parents?
What’s important to you when it comes to money?
Is it that you can provide for the family and put our children through university?
Does it have to do with security? Or is it knowing that you have enough to “get by”?

If your priority is to pay off credit card debts, you may want to examine your debts and decide how to approach them systematically. On the other hand, should your partner’s aim be caring for his ageing parents, both of you may wish to set aside an agreed sum of money for this purpose.

Or it could also be that both of you have started thinking about saving up for retirement. If that’s the case, then the conversation could revolve around minimising unnecessary expenses and maximising saving opportunities.

What about financial stresses?

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Having a negative net worth or financial struggles can be upsetting. This emotional distress can spill over into your money date. Thus, it is vital to avoid getting into an overly aggressive discussion on your first money date.

As you and your partner gradually move towards subsequent money dates, you know it’s probably a good time to focus on more specific details. This could surface one’s irrational fear about a particular area. From there, start digging deeper and decide if there’s a solution to work towards.

Final thoughts

While it may feel uncomfortable to talk about money with your partner at first, it’s ultimately an essential thing to have. In fact, you might even surprise yourself by how easy it is to get into the flow of things. If you’ve yet to start, we urge you to consider taking that first step. It’s not as scary as you think it to be.

Read this if you find yourself always buying “crap”

It’s easy to be enticed with non-stop ongoing promotions online.

Thanks to the pandemic, more companies are also urgently shifting from brick and mortar to embracing digital means to sustain their business. This means customers like us can view a product instantly and make a purchase within a few taps or clicks.

But this also means it’s now easier to shop and buy “crap”. Please don’t get us wrong when we say “crap”. We’re not necessarily referring to a product as worthless but more towards whether it’s indispensable.

If you find yourself constantly buying “crap”, especially since it’s hard to say no to that dollar deal, read on.

#1: Stocktake your junk

Unless you are already living a minimalist lifestyle, chances are you have plenty of surplus stuff lying around at home or in your car boot.

The first step to help you stop buying items you don’t need is to do a stocktake on your current junk. A detailed record of your household items will help you realise how many things you already own.

Chances are, you will also find lost and misplaced items long forgotten over the years. Take these items and set them aside. Before donating, discarding, or reusing, look at it and do a quick sum-up of the costs. This exercise will reveal the potential savings you would have had if not for the purchase of those miscellaneous products.

And as a bonus, take it as an opportunity to declutter.

#2: Set a financial goal

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Financial goals are important because they help us make informed decisions with our money. Perhaps you want to save for retirement, get a new car, or take a luxury staycation soon.

Figure out how much money you need for your goal and consider opening a savings account to fund it. Next time you are at the shops and thinking of spending S$10 on something random (just because it’s on discount), consider putting that money in your savings instead.

You will be amazed at how quickly all those seemingly small purchases add up.

#3: Engage in an inexpensive hobby or activity

Shopping is a fun hobby, but it is an expensive one. Consider finding another activity to replace that.

Instead of going to the shopping centre, logging in to your favourite shopping app, or ordering stuff you don’t need during a time sale, do something else. Maybe you could go for a walk, read a book, or develop an artistic interest.

There are many engaging and inexpensive hobbies, such as bird watching or sketching, that can be very rewarding. Having an activity to fill your time can help you stop mindlessly carting out online. This could translate to more savings in the long run!

#4: Implement a 24-hour pause strategy

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Even if you find a replacement hobby to keep you from shopping too much, you will undoubtedly find yourself back at the shops from time to time.

To prevent yourself from getting into the shopping routine, implement a 24-hour pause strategy. Before you buy that new phone cover or that shiny baking tray, put it on hold and think it over for 24 hours.

If you think it would significantly add value to your life or you would be using it for a long time to come, buy it. However, if you realise it’s possible to live without it until the current item you own wears out, skip it.

#5: Unsubscribe from marketing emails

Even the strongest among us can succumb to the temptations of promotional emails. New products, attractive coupon codes, and special deals are what marketers use to get inside our heads and tempt us to spend that money.

One of the most effective ways to avoid this temptation is to get it out of sight. There is little to no value in these messages if you’re on the road to stop buying “crap”. Unsubscribing from such marketing emails will help you regain control of both your inbox and your wallet.

#6: Create firm budget limits

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It would be unrealistic to say, “I am going to stop shopping”, and then hope it would work the next moment miraculously.

While we’ve worked hard to earn money, and it’s perfectly alright to spend it, the idea here is to spend less of it on “crap” that we don’t genuinely have a use for. The best way to attain this goal is to set a fixed budget in debit or cash.

Giving yourself an allowance in debit or cash helps you exercise more control over overspending. Spending debit or cash feels different than spending money on a credit card or through an app. Having to count and part with physical bills in exchange for an object helps us observe the trade differently now that we see the money disappearing from our possession.

#7: Pen down specific goals

As we come to a close, just saying “I am going to stop buying items I don’t need” may not work as you intend it to be. You want to pen down a more specific and measurable goal that you can attain.

For example, “I will only shop online on weekends,” or “I will only hit the stores on Saturdays with a cash budget of S$50 with me”. Preparing yourself with precise and realistic goals like these will aid you in reducing your excessive spending and break the chain of buying unnecessary “crap”.

Read these 10 well-rated books if you want to be a millionaire

So, you want to be a millionaire? Sure! But first things first, make sure you’re not spending too much money way over your budget.

For folks looking to attain financial freedom, we recently wrote on some challenges to save more money which might be of powerful assistance. Some concepts, like the 1% trial or 52-week challenge, can be new ideas to try out.

Meanwhile, for today’s article, we will look into 10 well-rated books to read if you want to be a millionaire. Let’s roll with the titles!

#1: “The Simple Path to Wealth” by JL Collins

Most of us want to become millionaires. But the questions we may not know how to answer can include:

How do I get started with investing?
Why is debt a must-avoid, and what should I do if I’m heavily indebted?
Is it possible to use my money wisely and not gamble it away on fluctuating stocks?

Simple, engaging, and informative, this book delivers solid advice on investments, the stock market, and real-life implementation tips.

#2: “The Millionaire Fastlane” by MJ DeMarco

“The Millionaire Fastlane” is a straightforward guide to wealth generation written by a self-made entrepreneur who has learned from both his successes and his failures.

A fan of non-conservative approaches, DeMarco explores the theory that success is tied to effort. You are the vehicle, and the fuel, engine, etc., can be tailored to your specific route. The author’s advice is concise and valuable for those seeking to grow their wealth via the expressway.

#3: “The Bogleheads’ Guide to Investing” by Taylor Larimore, Michael LeBoeuf, and Mel Lindauer

Do you know what Bogleheads are? It’s a term referring to investing enthusiasts who hold fast to the investment advice of John Bogle, the founder of Vanguard and an investor advocate.

This guidebook provides the reader with straightforward investing and financial advice designed to help the average person profit from long-term wealth creation. This book also advises readers on how to survive economic downturns and keep their footing rooted.

#4: “The Richest Man in Babylon” by George S. Clason

More a parable than a textbook, Clason’s work revolves around the subject of thrifting, financial planning, and personal wealth.

The lessons presented in this bestseller are timeless and easy to follow. You will learn how to save, spend less than you earn, and make money earn more money through seven simple rules. If you want to know, start flipping.

#5: “The Intelligent Investor” by Benjamin Graham

Known as the father of value investing, Benjamin Graham was a well-known economist and professor whose students include legends such as Warren Buffet.

Readers of “The Intelligent Investor” will focus on learning the fundamentals of value investing. Graham teaches us how to guard our investments and make them successful.

If you want to avoid common investment pitfalls like channelling too much energy to the changing sentiments of the market, this book will do the trick. Updated by famous financial journalist Jason Zweig, this edition will keep Graham’s lessons appropriate for modern demands.

A must-read for any aspiring millionaire!

#6: “How to Win Friends and Influence People” by Dale Carnegie

What does winning friends and influencing people have to do with getting rich? Plenty!

To achieve success, one must learn to work with others. They could be your friends and family members, investment advisers, business partners, or even salespeople.

Nobody who aspires to become a millionaire can afford to ignore Carnegie’s advice on how to win people over with your way of thinking. The tips conveyed in this book will help you think in fresh ways and cultivate relationships that lead to unlocking your maximum potential.

#7: “Conscious Business” by Fred Kofman

The author explains the term conscious business as the practice of expressing your passion and values through your work.

Rather than blindly chasing after profits, the conscious business person leverages their values into helping business stakeholders attain happiness.

Kofman explains that business people who approach their work with integrity, responsibility, and genuine leadership are more likely to achieve personal and financial success beyond the workplace.

#8: “Secrets of the Millionaire Mind” by T. Harv Eker

“Secrets of the Millionaire Mind” concentrates on identifying internal traits that can lead to financial success.

Eker does that by identifying one’s money and success blueprint hidden deep within the subconscious mind. For those whose blueprints are not built for success, the author offers a chance to reset one’s mental patterns to improve the likelihood of financial triumph.

#9: “The Millionaire Mind” by Thomas J. Stanley

Peeps who are keen to explore further the interaction of mindset and wealth, Stanley’s writings can offer a glimpse into the millionaire’s headspace.

While many may assume that millionaires are well-connected graduates of prestigious schools who flaunt their wealth, the truth might be more surprising. Those who want clear road maps on how millionaires found their niches, look no further.

#10: “Think and Grow Rich” by Napoleon Hill

We will close our list with one of the classic books on wealth creation and financial success. Hill’s “Think and Grow Rich“ lets you in on money-making secrets inspired by Andrew Carnegie’s magic formula for success.

The book will share with you 13 steps towards riches. From the attainment of desire to influencing the subconscious mind and putting it into action, you will get the fortune you want if you’re ready to welcome it.

A brief look at debt settlement options in Singapore

Do you know that the average household debt in Singapore is about S$55,000 per capita?

With a value that high, there’s no doubt that it’s about time to learn how to manage your debt and minimise it as much as you can. Financial freedom is within reach if you’re able to settle your debt in time the right way.

Here’s a brief look at various debt settlement options available on our sunny island.

#1: Self-Administration

One of the easiest ways to manage your debt is to directly discuss with your creditors to see if you can potentially negotiate or appeal for a cheaper instalment repayment plan.

However, you need to approach them with some research done beforehand. In your written appeal, fully flesh out your financial situation and suggest a repayment amount that’s okay for you.

Don’t forget to include documental proof like income and CPF statements whenever applicable to bolster your appeal.

#2: Discounted Lump Sum Settlement

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Once you’ve accumulated enough financial capital, you can ask your creditors about repaying your debt in a discounted lump sum.

A quick way to build up your lump sum is to consider selling off several assets or taking a low-interest personal loan from a reputable company or financial institution. Then, pull out those negotiating skills to seek a discount.

#3: Debt Consolidation Plan (DCP)

Under this refinancing program, you’re able to pool together all your unsecured debts using one financial organisation.

You should note that some unsecured debts are not allowed, such as medical loans, joint account debts, and more. Unless you don’t fit the DCP criteria, you’re eligible to apply directly at your participating financial institution.

Once your application passes, your unsecured credit facilities will close, and a revolving credit facility will open to aid you in payments.

#4: Debt Management Program (DMP)

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Whenever heavy financial stress hits and you’re unable to pay your debt back, not all hope is lost.

The Credit Counseling Singapore (CCS) runs a DMP that provides financial counselling sessions to examine your payback ability and ideally settle your debts in one decade.

The CCS will help create a repayment plan with lower interest rates and more extended repayment periods to enable you to pay back those debts. Among other benefits, the program is perfect for you only if you qualify.

#5: Bankruptcy

As an individual or a business, you can file for bankruptcy with the High Court if you’re unable to repay a debt. This is commonly the last resort because you will face some strict consequences if you pursue this option.

You will be assigned a Private Trustee-in-Bankruptcy (PTIB) or Official Assignee (OA) who can help assess your situation and figure out a target contribution on your behalf to repay your creditors.

#6: Debt Repayment Scheme (DRS)

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As we come to a close, there is a way to avoid bankruptcy – your OA can lead you through a DRS.

But because you’re not allowed to apply for this option directly, only your OA can approve you after previewing your bankruptcy application. Upon fulfilling the necessary criteria, you will not be labelled as bankrupt.

However, you must commit to a repayment plan that spans at least five years. For more information on DRS, you may head to the Ministry of Law Insolvency Office’s webpage.

Final thoughts

Debt settlement can be scary if you do not possess sufficient knowledge on the topic. Why not speak to a trained professional if you need help resolving your debt problems?

Folks who need 1-to-1 financial counselling can book an appointment with the CCS. Do note that there’s a one-time fee of S$30, but no further fees required for subsequent meetings (if necessary).

Nothing is impossible to solve. Take heart!