Creating A Budget During Extraordinary Times

With non-essential establishments on closure and the economic crisis we are under, how can you employ a system to arrange your cash-flow better? The answer is strict BUDGETING.

A budget estimates your revenue and expenses over a period of time. By listing your sources of income beside your monthly expenditures, you will get an idea on where your money goes. This way, you can make smart financial choices and prioritize your obligations to reach your financial goals.

Creating a budget for the first time is like learning how to ride a bike. At first you are scared to ride the bike without training wheels. Eventually, you will be able to ride a bike on your own without qualms. Although you know cycling is healthy for you, you cannot just ride and go! You must learn about the basics of coordination and road safety. Creating a budget during a pandemic involves steps too. Here are the vital steps to create a working budget:

1. COLLECT YOUR DATA

Gather all the previous salary invoices, credit card statements, utility bills, bank statements, and receipts. Estimate how much you make and spend each month by using these necessary resources. Take note of the changes in the expenses due to the Circuit Breaker (CB) period and allow yourself to incorporate Government allowances too.

Start your budget by calculating your revenue since the CB. Add all your sources of income both from your part-time and full-time jobs (if any). Use your minimum monthly wage as a basis for your budget.

2. SET YOUR GOALS

Set S.M.A.R.T. goals and examine how you will be able to achieve each one. This acronym stands for Specific, Measurable, Attainable, Realistic, and Timely. I want to highlight that you must not make unrealistic and unattainable goals at this time. After satisfying S-R goals, you must budget according to your time-frame. List all your financial goals and divide them into short-term and long-term goals.

For goals to be specific and measurable, you must quantify what you want. For example, your goal is to increase the number of clients that will view your website. You may allot money to Facebook promotion or to hire a freelancer that will create your web design. I suggest that you focus on Marketing as it is more feasible given the limited physical movements that you can make during CB.

3. IDENTIFY YOUR FIXED EXPENSES

For many of us, lessors have postponed the payment of the April rent. You can only imagine the increase in your utility bills as you are mainly staying at home. These essential expenditures are called fixed expenses. Come May, you are looking at a wider range of fixed expenses.

Fixed expenses include rent, utility bill, and insurance. As they are stable each month, allocate a portion of your income to this category first.

4. ALLOT MONEY FOR EMERGENCIES

There should always be a budget for savings, especially for your emergency fund. Savings are your gateway to long-term financial goals and your safeguard against unforeseen events such as COVID-19. Set aside at a certain percentage of your revenue each month to help build a nice nest for your future. I personally recommend at least 10% but you have to give a percentage that you can maintain for the months to come.

5. USE A CLEAR SYSTEM

Help yourself navigate through the waves of budgeting by keeping a money journal or by downloading a digital budgeting tool. Supplement your budget with a calculator that enables you to know your cash-flow. It is called the Budget Calculator.

Then, download free apps that enable you to track your spending. Some of these apps are Mint and Spendee.

Image Credits: unsplash.com

No one knows how long this pandemic will last. Hence, you must be frugal with your expenses and eliminate unnecessary luxuries. Moreover, you may look for other ways to expand your income!

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The One Thing to Do Today If You’re Tired of Being Bad With Money

Do you look at your bank account at the end of the month and wonder where all your money went?

Are you tired of having to deal with banking, choosing a debit card or credit card to use, investments, paying your utilities and bills, getting sufficient insurance, settling your loans and more?

(Man… I got tired just typing this list out.)

In fact, does sorting out your personal finances stress you out so much because you don’t know where to start and have no idea what you need to do?

Well, if you’re tired of being bad with money, then you just need to do one thing today: visit Seedly.

Source: Adventure Time | Giphy

Be Part of Singapore’s Biggest Personal Finance Community

Seedly is home to the BIGGEST personal finance community in Singapore and it’s the only resource you need to sort out your personal finances.

The coolest thing about the Seedly site is that it knows exactly what you need…

All you have to do is just ask. See that Search Bar?

Just type in your query and you’ll find all the relevant information about whatever you wish to find out.

For example, if you’re looking for information about loans, just type in ‘loans’ and you’ll find:

  • Product information and reviews about loans
  • SeedlyReads content about loans
  • Questions asked by the Seedly Community about loans, and even
  • A Seedly Community member named… erm… Loan

Basically, everything you ever need at a glance.

Alternatively, you can also find what you are looking for by Category.

Let’s say you’re looking for a new credit card.

All you have to do is click on the ‘Cards’ category icon:

And you’ll be able to compare between credit cards and read guides on how to choose your first credit card.

There’s no need to waste time trawling the internet in search of information that may or may not be helpful or relevant.

Level Up With the Savvy Seedly Community

Let’s face it, personal finance is a subject that was never taught in school.

So the fastest way to get good at it is to talk to other community members, discuss, and learn the best practices and money-saving hacks from each other.

On the Seedly site, you’ll notice that there are Recommended Questions.

That’s where you’ll find questions which the Seedly community is actively talking about and discussing.

It’s also the perfect place to learn about the newest developments in personal finance and level up by finding out new ways to do things that you might never even have thought of.

Find a topic that you like?

You can follow the topics and questions which you are interested in and receive notifications once someone has something to share.

Oh, and if you see a question which you know the answer to, you can also answer questions to help out a fellow community member!

Read Real User Reviews Left By The Seedly Community

You know how every bank, insurance company, mobile telco and etc. out there claims to have the best product?

Under Recommended Product Reviews you will find honest and unbiased reviews which provide great insight into whether you should REALLY buy that product or not.

Yep. You no longer have to try it out for yourself in order to find out if something’s as good as it looks.

Learn The Latest Money Hacks and Read Useful Guides

Last but not least, you can also get quality personal finance-related content under Recommended Articles.

There, you’ll only find relevant, easy to read, hard-hitting personal finance content that is sure to turn you into a personal finance pro in no time.

Start Today

Having control over your money is one of the best feelings ever.

So if there’s one thing you should do today…

It’s to visit Seedly, be part of the biggest personal finance community in Singapore, and start being in control of your finances.

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4 COVID-19 News Headlines Worth Reading

From receiving up to S$600 worth of Solidarity Budget to closing down of Changi Airport Terminal 2, here are some of the COVID-19 news headlines that will greatly affect your lifestyle and your budget.

1. “Solidarity Budget: All adult S’poreans to receive extra one-off cash payment of S$300, taking total to at least S$600”

Deputy Prime Minister Heng Swee Keat announced yesterday (April 6) that all Singaporeans above the age of 21 will receive a one-off cash payment of S$600 to cushion the weight that social-distancing measures have caused. This financial step shall cost the Government an extra S$1.1 billion as it increases the Solidarity Budget by S$300.

Singaporeans who provided the Government with their bank account details will receive the payout by April 14. While, the rest will receive the lump sum by cheque from April 30 onward.

2. “Changi Airport Terminal 2 to suspend operations for 18 months amid COVID-19 pandemic”

As the pandemic continues to affect the aviation sector, Transport Minister Khaw Boon Wan announced the upcoming closure of Changi Airport’s Terminal 2 (T2). It will suspend operations for 18 months, starting from May 1. Airlines operating at this terminal will be relocated to Changi’s other tree terminals.

The suspension of T2 operations will allow Changi Airport Group (CAG), its retailers, its airlines and its ground handling firms to save on running costs during this time. Moreover, it will speed up the current upgrading works at T2.

3. “Singapore Expo being prepared to house recovering Covid-19 patients”

Isolation areas have been prepared for COVID-19 patients and those who have been advised to have a 14-day quarantine. Health Minister Gan Kim Yong has confirmed last Sunday (April 5) that the Singapore Expo Convention Hall and Exhibition Centre is currently in the process of being turned into a facility to care patients who are on the road to recovery. This will help ensure that there will be continued hospital capacity to treat patients with severe symptoms.

According to him: “For patients with mild symptoms, generally they don’t need any medical support. In fact, they can actually recover and be cared for in these facilities until they are well and can be discharged, without having to go to the hospitals.”

Let us do our part to heal as one by being responsible for our actions.

4. “Durable, self-disinfecting coating applied on all HDB lift buttons”

One of the things that we frequently touch on a daily basis is the lift button. Teams from Singapore’s 16 town councils applied a self-disinfecting coating to the lift buttons over the past two weeks. This was made possible by the donation of 650 litres of sdst by the Changi Airport Group’s (CAG) philanthropic arm Changi Foundation. The self-disinfecting coating is called sdsr. It kills bacteria, viruses, and fungi upon contact.

Image Credits: unsplash.com

It remains in place, even with repeated cleaning and scrubbing, as chemical bonding agents help it to adhere tightly to surfaces at a molecular level. It is said to last for up to three months. That is one way to keep the HDB lifts and lift lobbies in Singapore safe!

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How To Create Abundance In Your Life

In observation of quarantine or social distancing, I joined a Meditation group. This group highlighted the importance of visualizing abundance in your life. Abundance, according to the Cambridge dictionary, can be defined as a situation in which there is more than enough of something. Your perception of abundance depends on your currency. Is owning several cars your definition of abundance? Or, perhaps abundance comes from being able to provide for your family?

Bringing abundance into your life is more than a game of chance. Instead, it is about creating the life you desire. Here are some guidelines for actively creating abundance.

#1: START WITH GRATITUDE

Begin the day with thanksgiving. Be thankful for all the blessing you already have and the simple acts of kindness that you receive on a daily basis. The next challenge is for you to produce.

Produce more ideas and more ways to increase your income. Being able to produce more allows you to share what you have to others. This fruitfulness will bless your family and your community. Abundance will start to come as soon as you become more productive.

#2: LEARN TO VISUALIZE

A grateful heart is able to envision an abundant life. Every great achievement begins with a dream in mind. Dare to dream and make it possible. Free yourself from the negative thinking and feedback that will weigh you down.

If you dream to travel with your family before the year ends, make it so. Take this time in quarantine as a way to save more money and fulfill your goals.

#3: ALTER YOUR MINDSET

There is a book that differentiates the way rich people and poor people think. Rich people live in a world of abundance. While, poor people live in a world of limitation. Whether it happens by chance or by hard work, rich people understand that creativity and willingness to be open can lead to a life of abundance. Having the right mindset will lead you to see opportunities that you were once ignoring.

In contrast, poor people think there is not enough to go around in the world. Fear-based mindset may be deeply rooted in their past experiences. Do you share the same ideals?

#4: COMMIT TO ACTION

Once you have planned for your abundant future and you have chosen a positive mindset, you must commit to living your dreams. What must you do to achieve the life you desire? Shall you expand your network or shall you try new hobbies?

Notice the opportunities that come along. Your only limitations are your consciousness, which is quickly expanding. Whatever you want quickly becomes yours because you see what most people do not.

#5: RESPECT YOUR MONEY

Do you disrespect your money by overspending or by not appreciating what you have? Do you often think that your current business strategies do not work out for you? Your financial block stems from your energy block.

Remember that you attract what your energy releases. Create abundance by cleaning up your wallet, arranging your business files, and perceiving an energetic connection between your you and your finances.

#6: GIVE MORE MONEY

Lastly, wanting more for others cradles the energy of abundance. It feels good to want more for others than to bring them down. This is especially true during times of crisis. When you genuinely want to help others, they will respond in kindness.

Image Credits: unsplash.com

This means that you have to eliminate your tendency of comparing yourself to others. Instead, you must come from a place of love and support. Things are healthier that way!

Sources: 1 & 2

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Get $20 cashback for this short term investment backed by Singapore properties

Debt crowdfunding, commonly known as peer-to-peer (P2P) lending is an investment concept where individuals & institutions together invest in loans to SMEs and earn returns in the form of interests. Considerably disruptive, the industry adopts a business model targeting the underserved SMEs by employing technology to directly link investors with them. Funding Societies is the largest such platform in Southeast Asia, having financed over S$1.3B worth of funds via their platform.

About Funding Societies

The platform is licensed and has operations in Singapore, Indonesia and Malaysia. Backed by Sequoia India and Softbank Ventures Asia amongst many others, the platform has grown at a rapid pace since they launched in 2015 in Singapore. The main risk in this investment is default risk of the loans. A few things to note when investing with Funding Societies:

  • Low barrier to entry: Investors can invest as low as $20 per loan
  • Short tenor: Investment tenors are quite short ranging from 1 to 12 months
  • Returns on Investment: Interest rates usually range between 3% to 5% per annum for a Guaranteed Investment product, 6% to 8% per annum for a Property-backed investment and 8% to 18% per annum for Invoice financing and Working capital related investments
  • Default Rate: The Singapore platform default rate is 1.89% while for Property Backed Secured Investment its 0% (no defaults till date)

To subscribe and start investing, just fill a 5 minute form here

Investing in these uncertain times

In light of the current economic uncertainties, Funding Societies has taken the approach to offer more investment notes for products that are more secure and have collateral backing it. For the purposes of this article, we will be looking at the Property-backed Secured Investment (PBSI) product.

About Property-backed Secured Investment (PBSI)

  • Investments backed by Singapore properties
  • Interest rates usually between 6% to 8% per annum
  • No defaults till date

PBSI is a crowdfunding investment made by investors in the form of a loan to a SME that is backed by a local property as collateral on a first lien basis. These pledged properties can be residential, commercial or industrial. Such properties may be owned by the companies and/or directors of the companies. What it means is that if the company defaults, the platform can liquidate the property to recover the principal and interest and pay back to the investors. To ensure that property price fluctuations do not impact the liquidation process, Funding Societies usually does not give loans of more than 70% of the property value and also takes into account forced sale value. Click here for more information on PBSI product.

Given that the loans are backed by collateral, PBSI is perceived to have a lower risk than other products on the platform. The rate of interest usually ranges between 6% – 8% per annum on a simple interest basis. This product portfolio has done very well so far with no defaults in more than 1.5 years since launch. While having a property as collateral does not mitigate default risk, it does provide an alternative helpline when seeking fund recovery should there be a default. At this point, it is important to note that past performance of the rates of return does not indicate future rates of return.

To reiterate, the reason behind the lower interest rate is due to PBSIs being generally less risky, given that these notes are backed by Singapore based properties. As the properties can be disposed off or auctioned by Funding Societies in the event of a default, the likelihood of recovering the principal and interest is considerably higher. More information on the interest rates for PBSIs can be found here.

While the returns are typically comparatively lower than unsecured products like Business Term Loans or Invoice Financing on Funding Societies, it can possibly be higher than some of the other investment vehicles in Singapore such as fixed deposits, certain bonds, and other fixed repayment investments. Investors will need to do their due diligence and access their risk appetite when studying various products.

To subscribe and start investing just fill a 5 minute form here

Importance of investment diversification

Just as how it is important to diversify your traditional investment portfolio across geographical areas, business types and investment types, the same is true for Debt Crowdfunding.

PBSIs can be an option to consider when opting for product diversification. By investing into both secured and unsecured products, the overall portfolio can be more balanced out to better weather storms.

Conclusion

Technological advancements have made multiple means of investment available to retail investors. While unimaginable a decade ago, retail investors today now have a large pool of investment opportunities to pick and choose from. When taking calculated risks, investors will need to fully understand the product that they are interested in. Beyond that, reading up and keeping up with trends is also crucial.

If you have done your own due diligence and decided to invest with Funding Societies, they currently have a promotion for new investors. Sign up with promo code MD20 and make a total investment of S$200 by 30th April to get a S$20 cashback.

Terms and Conditions apply

Investors must sign up with the aforementioned promo code and make a total investment of at least S$200 by 30th April 2020 to be eligible for the $20 cashback. Cashback will be credited into the eligible investors’ accounts by the end of May 2020. Funding Societies’ investor T&Cs apply.

Disclaimers:

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

All information in this article is accurate as of 2nd April 2020

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