5 Commandments Of Borrowing Money

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Whether you are borrowing your friend’s stilettos for a wedding or your mother’s mixing bowl for a party, we live in a culture that embraces the culture of borrowing.

There are certain rules involving this act such as dry-cleaning the suit that you borrowed. But, do you know the rules involving money? Here are just some commandments to get you started!

#1: THOU SHALL NOT BORROW BEYOND YOUR MEANS

Your hard-earned income must not revolve around debt repayments. Exhaust your resources to borrow an amount that is within your means. If you cannot afford an item then, skip it first! Save enough money and direct it to completing a purchase.

Many financial experts recommend that you maintain a Debt-to-Income ratio of 20%. How do you calculate this? Simply add up your monthly debt categories (i.e., excluding mortgage) and divide the total amount by your net monthly income. Ask for your partner’s help, if necessary.

#2: THOU SHALL NOT PAY LATE

There are several reasons why Japanese citizens uphold the value of time. For starters, paying on time is one of the vital rules of borrowing money.

It goes without saying that late fees or increased interest rates add insult to injury. Not to mention, being late can dramatically lower your credit score. In the long run, your bad track record will be reported to the credit bureaus.

#3: THOU SHALL NOT BORROW FRIVOLOUSLY

Borrowing money is an act built on a strong purpose and an intention of repayment. For debt categories that yield a sense of profit such as for education or for business, loaning money makes sense. The same ideal applies to loaning items that you will use for a long period of time (e.g., a car).

However, you must contemplate on loaning money for fleeting pleasures. Do you really need the latest gadgets in the market? Is attending an international music festival a crucial part of your life? Are you willing to spend thousands of dollars on a wedding anniversary weekend? Lastly, is a designer bag better than a functional one? Aim to borrow money for the right reasons.

#4: THOU SHALL NOT BE FINANCIALLY PRESSURED

Close your eyes and envision the last time you experienced social pressure. Was it your first day at a new workplace? Or, does it go way back in your secondary school days? At a certain degree, all of us felt pressured to do something we do not want to. It exists in all forms including financial situations.

In said challenging times, a deperate move that people make is to borrow money. You get trapped into a situation that unable you to make smart financial situations. Combat this by creating an emergency fund. Cushion your financial problems and continue to cultivate this fund even when you are experiencing debt. Please do not borrow or lend money to friends or relatives, if you are solely pressured into doing so!

#5: THOU SHALL NOT COMPARE LOANS CARELESSLY

Upon entering a new field, my basic instinct is to do my research about the company. Before travelling to a new country, my basic instinct is to do my research about their culture. What basic instinct do I apply before taking on a loan? Well, research of course! I recommend that you do the same thing too.

Image Credits: pixabay.com

Comparing loans is more than the mere act of scoring the lowest interest rates. You must carefully read thru the essential elements such as penalties and add-ons. For instance, some insurance companies include costly add-ons such as specific life insurance. The extra elements will increase the interest rate of the money that you borrowed. Thus, you must approach everything with extreme caution.

Sources: 1 &2

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Which Credit Cards are the best for Holiday Shopping in Singapore?

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With the onset of the Christmas season, Singapore nationals will soon start spending big on gifts, decorations and more both online and offline. As a result of this enhanced spending, people will be dependent on their credit cards. During this season, many banks also come up with rewards and promotional offers. One practical step to reduce the effect of your holiday expenditure is to judiciously use credit cards to earn miles and points.

There are some who like to shop online while there are some who prefer going to a store. In Singapore, it is certainly worthwhile to use the right card for holiday shopping. With substantial rewards, credit cards will help you make the most of your money assuming you pay off all your debts on time.

Cards with additional categories on shopping

Cards that offer bonus points on shopping provide faster earnings for particular types of purchases. For example, 5% cashback or 25 miles for every dollar spent on purchases made at online retailers and stores. During the last couple of months of the year, these credit cards take advantage of holiday spending by offering incentives on purchases made at retail stores with rebates, reward points and additional perks.

So if you are looking to apply to any of these cards, you must first consider how frequently you shop. Many cashback cards that banks introduce during the holiday season have a minimum spend requirement. So, such cards will not be useful for infrequent shoppers. They should rather opt for more generic cards with good overall rewards rate.

Cards with welcome offers

Many banks also offer cards with sign-up bonuses. And, it is also a useful method to make the most of getting returns on your additional holiday spending. There are cards that offer welcome bonuses worth up to S$400, but to get that, you may have to spend big in the beginning. For example, several cards call for a minimum spending of worth thousands of dollars during the first couple of months to be in the running for the bonus miles and points.

While it may seem to be a huge amount, a regular customer is expected to purchase gifts and clothes worth thousands of dollars during the holiday season. For those who cannot afford to spend a hefty amount, there are several budget-friendly offers such as S$100 cashback when you spend $500 in the first month.

Cards with 0% APR

If you have done too much shopping and you have overshot your credit limit and the balance at the end of the month is overwhelming, a credit card with 0% APR will come to your rescue. A card with a 0% APR on recent spending for a fixed time can help you fund your holiday expenditure.

Such cards will have no interest rate on recent purchases made in the last 3 to 12 months. This will give you enough time to pay your holiday expenditure without any interest.

Let us now take a detailed look at some of the most popular shopping credit cards both online and offline:

DBS Black Card

With DBS Black Card, you will get the following shopping benefits:

  • Opportunity to earn cashback on shopping done overseas.
  • 5% cashback on shopping at stores for personal care, furnishings, electronics and more.
  • 5% cashback on shopping for groceries, bags jewellery, shoes, clothes and more.
  • Offers 0% APR.

However, you will have to spend a minimum of S$700 every month to get the cashback on relevant categories and there is a cap of S$70 per month with cashback on this card.

Citi Rewards Card

With Citi Rewards Card, you will get 10 rewards points for every dollar spent on bags, shoes and clothes. You will get to earn rewards points even for shopping done overseas. However, the points that you will earn are capped at 120,000 points every year and will remain valid for five years.

OCBC Robinsons Group Credit Card

With OCBC Robinsons Group Credit Card, you will get the following shopping benefits:

  • 5% rebate at 18 retail brands.
  • 10% rebate on shopping worth S$5,000 at Robinsons and Marks & Spencer.
  • No cap on rebates.
  • Rebates are applicable over and above the prevailing discounts and promotions.

 

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Key Signs You May Be Heading for Bankruptcy and Not Even Know It

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bankruptcy

When you hear the word “bankruptcy”, you might have found yourself forming a mental image of a destitute and homeless person begging for money on the street while carrying a sign that says, “Will work for food”. While it might sound a bit too extreme for an outcome of bankruptcy, the stigma surrounding the term itself isn’t entirely unfounded as bankruptcy usually serves as a last resort measure that a person considers only when all other options for repaying the money owed from a creditor have already been exhausted. Thus, you would want to avoid heading straight into bankruptcy as much as possible by knowing some of the key signs that you should watch out for so that you can try your very best to remedy them before it’s too late.

What Are Some of the Key Signs That You May Be Heading for Bankruptcy Without You Even Knowing It?

While it’s completely normal to incur debt from a creditor as long as you can commit to timely repayment of the money that you borrowed from them, you might have taken up too much debt so that you’re unable to get through a single day without thinking of how you can pay your creditor back. As much as you’re putting off the idea of filing for bankruptcy, if your debt has grown to become increasingly unmanageable that you could barely settle it yourself, you would want to identify these key signs that you might be headed for bankruptcy without you even knowing it:

You’re making only minimum payments for your credit card.

Every credit card billing statement has a minimum amount due, but it doesn’t mean that you shouldn’t aim to settle your credit card’s entire outstanding balance on a monthly basis.

  • Unfortunately, some credit card holders pay only the minimum amount due every month as they feel that it’s more convenient for them since it usually costs less than their credit card’s total amount due.
  • When you’re settling only your credit card’s minimum amount due, a huge portion of it goes to interest with the remaining small amount serving as your actual payment to be deducted from the outstanding balance.

You’ve been taking out loans from your retirement account.

Often considered to be a rainy-day fund, the balance of your retirement account shouldn’t have a single deduction in it since you’ll be using it for when you’re required by the law to retire from your job due to old age.

  • However, you might be tempted to take a small loan out of your retirement account if the entire balance of your bank account isn’t enough to repay your debts.
  • While using a retirement account loan to pay back the money that you borrowed from your creditor might seem like a brilliant idea at first, you would have to deal with the need to deposit money back into your retirement account every month as well, which only adds to your existing debt problem.

You’ve been receiving calls from a third-party agency that your creditor had hired to collect your debt.

If you still haven’t paid back the money that you owe your creditor several months after you borrowed from them, they would entrust the collection of your outstanding debt to a third-party agency who might not take to your situation as kindly.

  • A debt collection agent would gently remind you at first over the phone to settle your debts, but if you still bail out on it, they might start making increasingly urgent and sternly worded calls to break you into paying back the money that you owe your creditor.
  • Worse comes to worst, your creditor might file a lawsuit against you that would require your employer to withhold a certain portion of your wages and send it as repayment of your debt.

If you find yourself unable to manage your finances properly you may have begun to feel that you can’t repay your debts on time. This situation only leaves you with more debt that you’re unable to keep up with it, and you might have started swallowing your pride and looking into filing for bankruptcy. However, it would greatly benefit you if you can read the above-listed signs to watch out for if you’re heading into bankruptcy without even knowing it so that you can address and resolve them immediately. To help you decide more clearly on what to do when faced with insurmountable debt, you should talk to a lawyer who can assist you in mitigating the ill effects brought about by those signs that might be telling you to file for bankruptcy and what you would need to do in case bankruptcy is the only solution left for you to wipe your slate full of debt clean.

Veronica Ferguson is equipped with more than 20 years of experience as a businesswoman. She is currently writing her next big project and hopes her pieces would impart vital knowledge to her readers. Veronica is a family woman, and is often with her family during her free time.

Disclaimer: The information presented below is meant to serve as a guide on some of the key signs of bankruptcy that you may not know about, and shouldn’t be interpreted as legal advice. If you want to find out more about how you can file for bankruptcy, you would have to contact a licensed bankruptcy attorney who can guide you throughout the entire bankruptcy filing process.

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Consequence of breaking your trading rules

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We know you have been a naughty boy and you want to break your trading routine. The hardest thing of our lives is the best thing that can happen to us and we always want to break it. You can remember how hard it was for your parents to send you to the school. You will have all the sicknesses of the world and still, your daunting mother sent you off to school. Trading in Forex can be boring sometime and you will need a change. Many people try to make that change by not following their routine and the result is not sweet. If you are wondering in your mind and want to know what will happen when you do not follow the routine you have made for your trade, this article will tell you what will happen to your routine.

Discipline is the key to success

In any profession, you need to show a great deal of patience to become successful. When it comes to Forex trading there is no other alternative to discipline. The majority of the senior traders in Singapore are extremely discipline and for this reason, they are able to make a consistent profit. Unlike them, the novice traders are always breaking their rules and losing money. If you look at the success rate among the traders in Singapore you will be surprised to know that most of them are doing relatively well in the investment business. This is only because they always follow the key rule investment. They are never taking any excessive risk neither they are dealing with the market with emotions.

Emotions can easily ruin your trading career and you can do nothing about it. You need to learn to control your emotion by demo trading account for at least six months. If you can successfully demo trade the market, it’s time for you to start trading with your real money. But always remember, discipline is the key to success in Forex trading. Read books about trading psychology since it will greatly help you to become a better trader.

You will get unorganized

The first thing that you will see in your career that you will get unorganized. A routine does not improve a trader but it helps to keep organized. If you know what you are going to do when you have finished brushing your tooth, it will be much easier for you to keep track on your daily works. If you break your routine and do what you want, you may not do something important. When you will break your routine, you will get unorganized and you will make losses. You will analyze the market sometime and sometime you will trade with your mind and you cannot expect that you will make a profit with this trading.

Profit will be harder to make

When you are unorganized in your trades, the profit will not come to you. You have to trade the market with the same routine every day and when you do not do that, you will be trading on a hinge. Following your routine is the right thing to do in Forex and when you break it, you do not make the profit. Traders are always saying to develop your routine and following it every day. This is why it is important for you never to break your routine.

Your career will not improve

Every trader wants to improve their career and it is not possible if you are trading without routine. Always keep a routine and follow it whatever happens. You may not make profit always but you will build consistency in your trading. The successful trader never breaks their trading routine and this is why they are consistent in their career. It is not possible to advance in your career if your routine is not followed. Never break your routine and trade the market with it and you will be successful.

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Your 2018 Investment Resolution – Earn up to 14% p.a. in Returns

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It’s the start of 2018 and you are perhaps setting up your investment goals for this year. Why not consider adding peer-to-peer lending into the mix? Also commonly known as debt crowdfunding, P2P lending has been around since 2007 in UK, and catching on in the region. Founded in Singapore, Funding Societies is currently the leading platform in Southeast Asia.

Here’re 5 reasons you should review peer-to-peer lending as part of your investment strategy:

  1. It’s not difficult to understand

Imagine a company needs to take a business loan for expansion, new projects  or seasonal stocking up. Platforms like Funding Societies act as a marketplace to crowdfund such loans, which may potentially yield attractive returns for investors like you.  The company pays its loan principal + interest repayment on a monthly basis and investors receive their initial capital (principal) plus returns on investment (interest).

Another product is invoice financing – Company A has sold its products or services (as a supplier) to Company B (buyer), and is waiting for Company B to pay. The waiting time depends on the invoice payment terms – usually 30, 45, 60 or 90 days. Company A can have an early access to the money by pledging the invoice on a P2P lending platform. Investors receive payments (including invested capital plus interest) on the due date when the invoice is paid.

  1. Investment starts from just $100

As loans are crowdfunded, a $200,000 can be filled by multiple investors starting from as low as $100. As a new investor, this is a good way for you to try peer-to-peer lending as a form of investment.

To many investors on Funding Societies’ platform, they take advantage of this minimal amount to diversify their investments extensively within the platform.

  1. See results in the short term

Business term loans on Funding Societies’ platform typically run for as short as 3 months and up to 12 months. Given that you receive monthly repayments as an investor, this product has a lock-in period as short as the loan tenure.

  1. Potential high returns & rigorous credit assessment

With returns as high as 14% per annum, P2P lending is a serious contender in one’s investment portfolio. Each loan coming to Funding Societies goes through rigorous in-house credit assessment before approving it to be crowdfunded on its platform.

  1. You have full control and still get support from the platform

As an investor, you have full autonomy to choose which loans to invest, depending on your risk appetite.

That said, there is still a Customer Experience team behind Funding Societies’ investor platform that you can reach out to. Miyu, the chatbot, is available 24X7 and steps in to help with round-the-clock queries. Many investors are also shaping some features through active feedback – talk about getting personal!

Start your investment journey with Funding Societies here.

Still have questions?

Funding Societies is organizing an investors’ event on 24 January 2018 from 6.30pm at The Working Capitol (1 Keong Saik Road). Attend the event as the team shares more about P2P lending and the investor platform!

Details and registration at: event.fundingsocieties.com/investor-24jan2018

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.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. 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.

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