Turn Your 2018 Money Resolutions Into Reality

It all starts with a dash of imagination…

Vividly envisioning where you are headed improves the likelihood of meeting your financial resolutions. Allocate at least a few minutes of your day to contemplate on your past experiences as well as your current standing. Afterwards, visualize the financial situation that you desire to experience in the future. Some people may find satisfaction in their year-round travels. While, you may find serenity through altruism. The mere act of visualization will motivate you to reach the goals that you set.

Plan to start small…

Like anything in life, you must have strategic plans. Money resolutions such as paying off debt or building retirement savings are not always easy! This is why you must commit to small things first. Commit yourself to a “small” task that you will accomplish for the rest of the year. Consider writing down every dollar that you spend. For the adjustment period, you can write down each transaction in a notebook or in a journal. Awareness is increased through the mentally exhausting act of writing. It is exhausting in a sense that it activates different parts of the brain. The enhanced brain activity improves your attention and memory.

As the act becomes second nature, you can turn to electronic devices for help. Find an efficient budgeting app or a software to track your transactions. Keep a record. This will help you spot the weaknesses and strengths of your budget. Please adjust accordingly.

Image Credits: pixabay.com

Divide and conquer…

Absorbing the essence of all your financial resolutions is overwhelming! Try dividing a single goal into bite-sized pieces instead. Focus your efforts on a goal before moving on to the next. Observe your progress by ticking off the “resolutions” that you have accomplished.

Remember to be as concrete as possible when identifying your financial resolutions. You may state something along the lines of avoiding credit cards for a month. Or, you may pay an additional of S$50 to your credit card debts. Aim to minimize your debt in a shorter span of time.

Parting thoughts…

Use affirmations to remind yourself that being responsible for your finances will impact your personal life and that of your family’s. Valuing your hard work starts with making few financial alternations.

Sources: 1 &2

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Money-Saving Tips For Uni Students In Singapore

Many people believe that the “student life” is golden. I firmly agree! The holistic experiences and social exposures you receive during the course of your tertiary education are heavily treasured. You cannot get these things anywhere else!

Ease your financial load by following these tips:

JUST KEEP PEDALING

Automobile companies lure us with their promise of privacy and convenience during our daily commute. Owning a car may add a level of prestige, but it comes with a hefty price! You must cover several expenses such as gas, parking, and maintenance. Just thinking about my car’s maintenance gives me a headache!

As a thriving student, it is a good idea to steer away from this financial burden. Consider the alternative types of commute such as public transportation, cycling, and walking. You are eligible to apply for an Undergraduate Concession Card as a full-time undergraduate from a government or government-aided tertiary institution (T&Cs apply). This card allows you to save a decent amount of cash for your entire matriculation.

Image Credits: pixabay.com

Image Credits: pixabay.com

Secondly, cycling to school is beneficial for the environment and for your health. The same benefits apply to walking. When I was a university student, I spared 40 minutes of my day for travelling. I walked to school every morning with music in my ears. I can either feel the breeze or focus on my thoughts. Do the same thing if you are going to travel short distances.

As a friendly reminder, stay safe by having someone accompany you while walking to isolated areas. Let a family member or a friend know about your whereabouts at all times.

SELL YOUR BOOKS

It goes without saying that the product of one’s intellect comes with a price. Reference books or textbooks suited for tertiary students costs as low as S$50 each. It is a significant price to pay for a book that you will use for barely 3-4 months. Thus, students must employ different strategies to save money on their books.

Firstly, you can rent a book for free at the National Library. Secondly, you can purchase second-hand books online. Lastly, you may sell your old books to afford another one. Aim to sell your books to the next batch of students.

I am well aware that some people refuse to discard their belongings, including the ones that are seemingly useless (e.g., old newspapers). Hoarding can harm your chances of getting the best deals as the books’ resale value lessens in time.

EARN ON THE SIDE

In general, tertiary students are divided into two financial groups. The first group of people can survive solely with their allowance. While, the second group survives by earning money on the side. It is easy to immerse yourself with your academic responsibilities without having to worry about your finances. However, you may want to invest on your financial freedom. Extra money entails that you can build a travel or an emergency fund.

Image Credits: pixabay.com

Image Credits: pixabay.com

I belonged to the first group. During the first year of my tertiary education, I underestimated the weight of earning my own money. I handpicked the friendly gatherings that I will attend to maximize my allowance. My perception all changed when my friend pointed out that I must choose the restaurant to eat at. I was given the tasked as she perceived me to be the “poorest”. I decided to boost my financial capacity by working as a secretary at my mother’s workplace. This experience has exposed me to the diverse work culture in the country. Not to mention, it benefited my career profile.

Make money on the side by working part-time at a restaurant, by distributing flowers, or by opening a blog shop. Find part-time jobs at freelancezone.com.sg.

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6 Financial Pledges For The New Year 2018

What are your financial resolutions for the next year? Here are some ideas to get you started.

#1: BE DEBT-FREE

When it comes to minimizing your debts, it pays to be strategic! You can either conquer a volume of smaller debts or a decent amount of high-interest debts. The important thing is to restructure your debts in order for payments to go towards your principal rather than the interest.

#2: CANCEL UNNECESSARY ACCOUNTS

Look into your current financial situation. Keep an eye on the redundant and unnecessary elements. Do you really need to pay for everything with your several accounts (i.e., both credit and savings accounts)? In most cases, the answer is “NO”! Financial institutions charges fees for the simplest of things. Consider closing down or canceling your unnecessary accounts.

#3: IMPROVE YOUR DEFENSE

No one knows when the next financial crisis will hit! To help ease the burden of unexpected costs, your first line of defense is the emergency fund. Modify your budget in such a way that you would have an excess amount of cash for emergencies.

#4: BOOST YOUR GOLDEN NEST

Now is the perfect time to invest for your needs beyond retirement. As a Singaporean Citizen or a Permanent Resident, you are privileged to have a straightforward retirement plan. Just ensure that your company’s terms are in lined with the CPF’s. Grow your “golden nest” to its full potential by maximizing your personal contributions.

#5: GIVE MONEY AWAY

Fulfilling someone’s monetary plea is one of the most positive ways to start the year 2018! If you are capable of shelling out a portion of your savings without hurting your budget then, you may donate to a good cause. You will realize the true value of your money as you see it transform someone else’s life.

#6: BE A BOOKWORM

Knowledge is definitely powerful! Particularly, printed media allows you to directly interact with some of the century’s brilliant minds. You may want to explore the different non-fiction topics including the wonders of Investments as a renewed bookworm. Look into the interesting titles such as “The Intelligent Investor” or “Common Stocks and Uncommon Profits”.

Image Credits: pixabay.com

Image Credits: pixabay.com

These books and similar ones will allow you to learn the basics directly from the people who were most successful in the field.

Sources: 1 &2

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Why Investment-Linked Policies Still Have Its Merits

As consumers get savvier about insurance, the Do-It-Yourself (‘DIY’) approach of “Buy Term and Invest the Difference” is gradually gaining in popularity. Briefly, it is the combination of buying a term life insurance and investing the “savings” from the lower premiums being paid. This contrasts with Investment-Linked Policy (‘ILP’) which has both life insurance and investment components. An example would be the AIA Pro Achiever which has been designed to include both insurance and investment elements in the most optimal manner. In general, ILP is preferred by consumers who want more exposure to investments than what other life insurance products may be able to provide. Therefore, it will be too foolhardy to dismiss ILP altogether. It definitely still has its merits and exists to benefit certain groups of consumers and situations.

ILP invests in a methodological and structured manner

One of the biggest merits of purchasing an ILP is to have investment professionals take over the actual investing. An example would be Mercer’s partnership with AIA to manage the investments under the AIA Pro Achiever policy.  As a leading global investment consultant, Mercer possess the requisite expertise and rigor to manage and grow the investments in a methodological and structured manner.

Furthermore, the premiums collected under the AIA Pro Achiever policy will be fully earmarked for investment right from the start. Expenses for this ILP are also low since no sales charge will be levied. Bid-offer spread is also not applicable. What these imply are that every dollar contributed will have the potential to experience investment growth. Therefore, policyholders can afford more time with their loved ones with the knowledge that their investment portfolios are under the experienced hands of Mercer.

On the other hand, the DIY approach is prone to possible lapses. That is because it is not uncommon for one to juggle multiple roles (eg: the hardworking worker, the responsible parent) simultaneously today. During stressful periods, emotions could go on overdrive while investment may take a backseat instead. As a result, a case of “overwhelming emotions” or “absent-mindedness” could potentially ruin any well-planned investment strategy. However, by buying an ILP, such incidents can be avoided since the investment component has been outsourced to professionals. Regular-premium ILPs also employ a dollar-cost average approach that helps to even out market volatility. Over the long term, it allows the policyholder to fully reap the benefits of staying invested in the market.

AIA

ILP is a flexible finance instrument

ILP is a flexible finance instrument that can be catered to investors according to their risk-appetite profiles. For instance, the AIA Pro Achiever policy offers 3 types of portfolios; Adventurous, Balanced or Cautious. This provides a choice for policyholder to select a portfolio that best matches his or her expected returns/risk profile. The flexibility extends further as policyholders are able to switch or rebalance their funds from time to time at no additional fee. This is critical as risk appetites would naturally evolve when certain life milestones are reached.

In addition, AIA provides leeway for policyholders to adjust monthly premiums especially since one’s cashflow could fluctuate from time to time. For instance, during an unexpected windfall or upon receipt of annual bonuses, policyholders have the option of topping up their premiums. Likewise, when liquidity gets tight, policyholders are at liberty to take a premium holiday. Finally, there is always the option of making withdrawals when a critical need or emergency arises.

ILP also serves as a life insurance

Let’s not forget that ILP also doubles up as a life insurance which means that there is a death benefit attached to it. On this, investment-linked policyholders are typically covered up to the policy value or to the amount that they have invested. This offers an extra peace of mind as immediate family members would be able to receive the sum assured in the event of an untimely passing. A noteworthy feature of the AIA Pro Achiever is the additional death benefit payout of 100% total regular premium paid in the event of accidental death during the first 2 policy years.

AIA also recognises that with increased life expectancies, policyholders may prefer to stay invested longer. Therefore, AIA Pro Achiever allows policyholders to stay invested till age 100 (also the policy maturity)! Furthermore, AIA Pro Achiever actively rewards policyholder that stays invested for the long term. Firstly, charges for premium holidays, partial withdrawals etc are waived after the 13th year of paying premiums. Upon reaching this milestone, policyholders are also awarded an extra 5% allocation on their premiums annually. Such loyalty features suggest that the AIA Pro Achiever provides even more value for money for policyholders that stay invested longer.

Get in touch with an AIA appointed representative to find out more about the AIA Pro Achiever today!


Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Money Digest to buy or subscribe for any securities and/or investment products. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any company or investment. 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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Is Owning A Credit Card For Necessary You?

Weigh the advantages and disadvantages of owning a credit card, before signing up for one!

WHY YOU MIGHT NEED IT

Here are some of the convincing points that highlight how useful owning a credit card is:

1. Practical for Globetrotters

Singaporeans desire to discover the world’s wonders beyond its concrete jungle. As travelling became increasingly convenient nowadays, there are several options for payment. One is through credit. There are three primary reasons why travelling with a credit card is practical.

Firstly, travel arrangements such as room reservation and car rental are usually done with a credit or debit card. Secondly, it adds a proof of financial capacity when trying to acquire a Multiple Entry Visa in some countries. Lastly, there is a sense of relief to know that you always have access to emergency funds while travelling.

Image Credits: pixabay.com

Image Credits: pixabay.com

2. Protection against Crooks

I was once robbed when I was young. I let my guards down as I was accompanied by my friend. After watching a fantastic film, I noticed that my wallet was missing. My friend and I frantically searched for it for hours. I even left my contact details to the cinema staff, but I had no luck! I had to accept that a decent amount of cash was gone. The unfortunate ordeal applies to my house keys as well as my debit card. To prevent identity theft, I had to immediately contact my bank. The process took two days.

If I only carried a credit card, the gravity of the situation may lessen. Credit cards are not tangible as cash. It is also not linked to your savings account. Many establishments ask for further identification for significant purchases. Furthermore, you can simply report a lost card thru a phone call.

3. Essential for Good Credit Report

Gone are the days when you solely think about budgeting your allowance. Welcome to the adult world whereby property owners and automotive establishments judge you by your credit report. Some of the best interest rates are offered to the people who carry impressive credit report.

It takes no genius to realize that using your credit card sensibly builds a good credit report. If you are suffering from a bad one, it is time to rehabilitate through a realistic financial plan.

WHY YOU DO NOT NEED IT

Here are some of the convincing points that highlight how owning a credit card is a recipe for disaster:

1. Tempting for Impulsive Buyers

Whether you believe it or not, we all have a control over our shopping habits. You can either be a frugal shopper who regularly reads consumer reviews or an impulsive shopper who regularly submits to tempting offers. For a person who has a difficult time in resisting a purchase, equipping yourself with a credit card may be harmful for your finances.

Using a credit card diminishes the sense of awareness as you are spending the money that you do not have. You are likely to shop based on your wants than on its costs. On the other hand, shopping with cash may allow to contemplate about your purchase. You buy what you can only afford to pay for now.

2. Solely for Smaller Purchases

If your primary purpose for owning a credit card is to cover your fondness for retail therapy, owning a credit card is not necessary. It is a good idea to save up for purchases costing S$250 or less. The delayed gratification allows you to contemplate about the coveted product.

Swiping a credit card is helpful for bigger purchases that you want to pay in several chunks such as purchasing a new laptop as well as financing your child’s education.

3. Unnecessary for Savvy Planners

One of the famous tests involving Typology highlights the dichotomous nature of people who are calculated and people who are spontaneous. The latter plans out several areas of their lives before jumping into a decision. While, the former enthusiastically goes with the flow.

I, for one, plan out my entire budget for the month as well as the funds that will go to savings and the emergency fund. Setting up an emergency fund entails keeping at least 6 months’ worth of your salary. If you have a strong emergency fund, it is unnecessary to have a credit card for emergencies.

Image Credits: pixabay.com

Image Credits: pixabay.com

Sources: 1 & 2

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