Personal Finance Archives | Page 91 of 139

6 Money Mistakes That You Probably Make

As human beings that dwell on habits, our personal finance patterns have a huge impact on our monetary well being. Many people are trapped into the same faulty habits that lead to common money mistakes. Recognizing these mistakes is a vital step to improving your financial health!

MISTAKE #1: NOT SAVING FOR EMERGENCY FUNDS

Unforeseen events happen from time to time. Some are pleasant (i.e., birthday surprise) while others are distressing (i.e., sudden layoff). Once an emergency strikes, it have serious repercussions to your finances. Not saving enough money for emergencies such as fire or burglary can mean instant bankruptcy for your or your family.

So, it is recommended to set aside a portion of your earnings each month to an emergency fund. Discuss with a financial professional about the advantages of compound interest and about ask for a feasible money strategy that fits your goals.

MISTAKE #2: LIMITING YOUR INVESTMENT PORTFOLIO

A large number of Singaporeans believe that property is an investment. There is nothing wrong about that. However, you are displaying poor portfolio diversification if you limit yourself to properties alone. Not only that! If you can only afford to purchase a single property, you will be forced to be homeless soon after.

This scenario highlights the importance of combining different investment options in order to safeguard your retirement.

MISTAKE #3: NOT NEGOTIATING YOUR SALARY

When I was a fresh talent in the “working scene”, I constantly cut my worth short. I believed that my experience was so insufficient. However, my relatively negative mindset was demeaning my knowledge and skills. This is why it is important to evaluate your skills, education, and experiences.

Find out the average salary per year through PayScale. It provides salary information for a particular position from its global online database. For example, the average pay for a Sales Representative at Pharmaceuticals is S$47,566/year. Negotiate salary based on your substantial research. You can do it!

MISTAKE #4: TERMINATING YOUR CARDS PREMATURELY

Whether you are closing out your cards because they are underused or because you had finally paid off your entire balance, this act may not be the best move for your credit score. The utilization rate and he average age of your credit accounts are two important elements of your credit score. The goal is to have a long credit history and a low utilization rate. Both of these elements are affected if you closed out your cards.

A better option is to store your credit cards in a safe place and make a purchase every once in a while to demonstrate that you are a good steward of your card. Immediately pay off the balance too.

MISTAKE #5: NOT HAVING ENOUGH MONEY FOR YOUR START-UP

Having scarce funding because of underestimating the start-up expenses can lead you to using your own savings just to meet the company’s monetary needs. You can either use your retirement savings or borrow money from friends and family. Furthermore, you will not be able to optimize your product to its full potential. This is not a good disposition to have!

A usual start-up goes through several rounds of funding. It is necessary to analyze all the areas of your budding business and each type of funding opportunities in order to begin the operations on the right foot.

MISTAKE #6: EATING OUT EXCESSIVELY

It is no secret that Singaporeans love to munch! We are blessed with a myriad of cuisines that one cannot resist the temptation of eating out. As with everything that is good, too much can be a sin too.

Image Credits: pixabay.com

You may feel that eating out during lunch or dinner daily does not make a difference. But, all your costs add up. The cost of one restaurant meal may be equivalent to three home-cooked meals. Consider packing lunch from home as it is cheaper, most of the time.

Start Saving Cash By Following These 18 Spectacular Tips

Saving money is a crucial step to financial independence. No matter what your current financial status is, you need to understand that it is possible for you to grow your wealth. There are simple money-saving ways that you can employ now.

Let the round-up begin!

1. Start by accepting your financial responsibility and devising a monthly budget that is suited for your lifestyle. When you continue to make excuses to saving money or altering your spending habits, you may end up broke.

2. Eliminate your consumption of junk food and beverages such as sodas, chips, and sweets. These things are not only unhealthy but they are also costly.

3. Figure out the saving goals that are most important to you. Organize your expenses based on your priorities and your goals.

4. Spend at least 6 minutes on examining the last month’s utilities bill and credit card statement. Use your vigilant eyes to spot one expense that you can either reduce or eliminate.

5. Before purchasing anything, it is good to read the reviews and to compare the prices so that your money will not go to waste.

6. If you are taking medications on a long-term basis, ask your physician if he or she can prescribe a cheaper yet equally efficient alternative.

Image Credits: pixabay.com

7. Surround yourself with financially literate friends. This is important as you can begin to adapt the attitudes and the beliefs of the people whom you are most exposed with. Know the 6 Kinds Of Friends Who Can Positively Influence Your Finances.

8. If possible, let your employer automate your salary in a separate bank account that is solely for your savings. This will lessen the temptation of immediate spending.

9. Give refurbished laptops a chance. Buy these from established and trusted retailers to ensure safety.

10. Save and reinvent the unconsumed food when you either ordered too much restaurant food or when you cooked excessively.

11. Your appliances and electronics will continue to consume energy and spike your tariff despite turning off the switches. This is why you must unplug your cables when not in use.

12. Save every last cent by putting it in a jar. If you collated your loose change of 50 cents a day, it can generate nearly S$200 a year.

13. There is no need to replace your torn clothing right away! Learning and mastering the basic sewing stitches can help you extend the life of your favorite clothing.

14. The sharing economy allowed people from all over the world to rent their own homes. Cut accommodation costs as well as energy consumption by availing the services of Airbnb, HomeExchange, or Couchsurfing when overseas*.

15. Stop hoarding or collecting unnecessary items. Start selling these items on global marketplaces instead.

16. What better message of gratitude can you convey when you pour your heart on handmade gifts? Consider creating your own gifts instead of buying them from the shops.

17. Limit your taxi rides. Using public transportation can save you at least S$5 per trip.

18. Rather than spending all your money on a fancy restaurant with your friends or co-workers, socialize by having a pot-luck.

Image Credits: pixabay.com

*Be cautious at all times. Read the reviews of the room or the house you are renting before paying for it.

Sources: 1 & 2

Download The App That Can Keep All Your Insurance Policies In 1 Place

Insurance is a safeguard against unfortunate and unforeseen events. It is a strategic way to manage various risks. Insurance companies offer individuals or policyholders protection from potential losses in exchange of payments called premiums.

To manage your policy letters better, insurance companies offered their own apps. It sounds like a great idea for people who possess a couple of policies from different insurance companies. However, it is quite a chore for people who hold several policy documents. That is when PolicyPal comes in.

PolicyPal, developed when a startup took part in the Startupbootcamp FinTech Singapore, is a versatile platform that gathers all the policy documents from a wide array of insurers. It provides you with a “digital overview and analysis of your existing policies to identify any protection gap in your insurance portfolio and help you to better understand your coverage.”

Image Credits: facebook.com/hipolicypal

HOW IT STARTED

Ms. Valenzia Yap is the brainchild behind PolicyPal. About two years ago, Valenzia’s mother was diagnosed with a serious illness. Her mother was diagnosed with one of the most notorious illnesses across the globe – CANCER. The unfortunate turn of events did not stop there. She was surprisingly rejected by the insurance company because of several lapses that they were not aware of.

The inconvenience that she went through while sorting out her mother’s policy letters gave her an idea to digitize the collation of the insurance policies and other documents. So, Valenzia collaborated with two programmers named Rick Wong and Jun Wei Ng to create the PolicyPal. Necessity was truly the mother of invention this time around.

ITS CURRENT SITUATION

This impressive app received over a thousand of users since its launch. Majority of these users are either on their late 20s or early 30s. Interestingly, their policies range from 1 to 12. These information simply shows how a significant number of Singaporeans are conscious about their health and safety choices.

THE EASY PROCESS

In simpler terms, PolicyPal follows these steps:

1. Capture an image of your policy’s first page.
2. Taking a snap of the second page is only necessary if you have riders.
3. Wait for the app to process your data. It will analyze the policy number, premiums, coverage, and expiration dates.
4. View your premiums and coverage in a graphical overview or a comprehensive chart.
5. Request for a review.
6. Get a free portfolio review to understand your coverage its gaps.
7. Purchase from the available policies if necessary.

Image Credits: facebook.com/hipolicypal

Eager to get your very own PolicyPal app, visit policypal.co to download it for FREE!

MORE FINTECH APPS

There are other incredible financial technology startups that originated from the Lion City aside from PolicyPal. These startups came up with smartphone apps that make financial services more efficient, convenient, and prompt. They challenge the traditional businesses that are less reliant on the potency of software.

Do yourself a favor and know more about the Call Levels (i.e., providing live updates for traders and investors), the TradeHero (i.e., gamifies trading), and the Dragon Wealth app (i.e., one-stop shop for financial advisors)!

Source: 1 & 2

OCBC 360 Account Offers The Best Fixed Deposit Rates

This is a contribution by Alison, who blogs at www.heartlandboy.com

Readers may be surprised that Heartland Boy is suggesting that an actual banking account, as opposed to some plain-vanilla fixed deposit schemes, offers the best fixed deposit rates in town currently. Ever since DBS launched its DBS Multiplier Programme with headline grabbing interest rates, it has forced its key competitors to react accordingly. As a result, this has spawned a new type of hybrid savings account which typically rewards account holders with significantly higher interest rates than the moribund 0.05%. OCBC has its own OCBC 360 Account while UOB has its UOB One Account. After comparing the various bank offerings, Heartland Boy chose the OCBC 360 Account as he thinks it offers the best fixed deposit rates amongst the local banks.

HOW THE OCBC 360 ACCOUNT WORKS

OCBC rewards account holder bonus interests for completing a myriad of tasks. This is in addition to a base interest of 0.05% per annum. The respective bonus interests applicable to the first $60,000 of the account holder balances are:

1.2% per annum when your credit your salary of at least S$2,000 through GIRO
0.5% per annum when you pay any 3 bills online or though GIRO
0.5% per year when you spend at least S$500 monthly on OCBC Credit Cards
1% per annum when you purchase a new insurance (eg: Policies of at least S$2,000 in annual premium) or investment product (Unit Trusts or Structured Deposits of at least S$40,000) with OCBC

Source: http://www.ocbc.com/personal-banking/accounts/360-account.html

The bonus interest accumulates and pays when you do all of the above of any of the following. As an illustration, if you satisfy only criteria 1 and 2, you would still be eligible for 1.7% bonus interest per annum.

TIPS ON MAXIMISING THE OCBC 360 ACCOUNT

Make sure that the salary credited into your OCBC 360 Account uses a code recognised and approved by OCBC in order to earn the 1.2% bonus interest.

A working adult should easily satisfy the criteria of paying 3 bills online (mobile phone, credit cards, insurance premiums etc). If you do not meet the criteria of paying 3 bills online, offer to help pay some of the household bills, such as broadband or utility charges, online.

Whenever possible, apply for GIRO so that the bill payments are automated. This ensures that you will never forget and are guaranteed to complete that task.

OCBC offers plenty of attractive credit cards, such as the OCBC 365, OCBC FRANK, OCBC Robinsons etc. Choose a credit card that is most compatible to your spending habits. For instance, if you enjoy dining out on weekends, you may apply for the OCBC 365 credit card to earn 6% cashback. If you are an online shopaholic, you can earn 6% rebate on OCBC Frank credit card.
If you are paying bills to an organisation which OCBC Credit Card has a partnership with, you can apply to pay through GIRO for greater bang on your buck. For instance, Heartland Boy’s M1 bills are deducted monthly via GIRO on his OCBC 365 credit card. He gets a 3% cashbackfor setting up a recurring telco bill, as well as becoming closer to achieving the S$500 minimum spending on an OCBC credit card as required by the OCBC 360 Account. That is equivalent to killing 2 birds with 1 stone.

If you are capable of making your own investments, you may consider forgoing the 1% bonus interest applicable for new insurance or investment products. That is because the expenses and fees that these products typically charge may well exceed the incremental 1% bonus interest that you earn.

The bonus interest is calculated based on average daily balance, so you cannot “game” the system by withdrawing money at the beginning of the month and depositing money at the end of the month and still hope to get the full interest over the month.

WHAT HEARTLAND BOY LIKES ABOUT THE OCBC 360 ACCOUNT

Previously, Heartland Boy was using the POSB Savings Account, an account his parents set up for him after he got tired of playing with his piggy bank. This account was paying a miserable 0.05% per annum and yet Heartland Boy continued using it out of habit and convenience. This was despite Heartland Boy knowing that he was actually losing money in real terms as Singapore’s historical average inflation was probably 2% per annum. However, since switching over to OCBC 360 Account, Heartland Boy feels awesome whenever he sees the bonus interest roll into his OCBC 360 Account. It was the same feeling he had when he was a small kid collecting candies after accumulating a series of stamps at the funfair.

There is no lock-in period and you are free to utilize the savings inside the OCBC 360 Account whenever you need to. This is in contrast to the traditional fixed deposit schemes whereby there is a lock-in period.

Informing Heartland Boy’s Human Resources Department to change his salary crediting account was surprisingly straightforward. All it took was an email instruction and he only had to do it once!

If you are unconvinced and still fret over the hassle of changing your monetary habits, Heartland Boy can assure you that once you have done it, it will become habitual eventually and you will thank yourself for having done so!

What Exactly Are Mutual Funds And Unit Trusts?

Before investing your hard-earned money, it is a good idea to educate yourself about the different types of investments. Let us start by defining both Mutual Fund (MF) and Unit Trust (UT).

MUTUAL FUND

MF is an investment that gathers the investors’ money into a pool to make multiple types of investments known as the portfolio. The compensation of the investment managers rely on how well the fund performs. Thus, you can rest assured that they will work hard to make sure the fund grows well.

Derived by accumulating the status of the underlying investments, the performance of the mutual funds are typically tracked as the change in the total market cap of the fund.

Players

There are two important entities when taking on the Mutual Fund. I am pertaining to the professional investment manager and the shareholder. Professional invest managers operate the MF by investing the capital and attempting to produce gains for its shareholders. Therefore, each shareholder participates proportionally in the gain or loss of the fund.

Process

As an example, let us consider Canada’s stock market. Gabby wants to try his luck at the Canadian equity market by investing in the S&P/TSX Composite Index. It consists largely of the energy, materials, and financial sectors with different percentages allocated. Performance of the MF is tracked as the percentage of change to its overall adjusted market cap.

UNIT TRUST

UT is distinguished from the MF as it follows a trust structure. Rather than putting the gains back into the fund, it provides profits straight to the individual. This investment scheme is available in Australia, South Africa, Namibia, Kenya, Fiji, Ireland, New Zealand, Malaysia, and Singapore. Both the local and foreign funds are regulated as collective investment schemes in our country.

It works by pooling money from multiple investors to invest in a portfolio assets in lined with the stated investment approach and objective.

Players

There are several important entities when taking on the Unit Trust. Professional investment managers or fund managers operate trusts for gains. The trusts as well as its rights are owned by the unit holders. The unit holders and the fund managers are mediated by the registrars.

Process

The process that the UT goes through depends on the goals and objectives of the investment. The value of the assets in its portfolio is equates to the amount of units issued multiplied by the price per unit. Afterwards, you must subtract other costs such as management and transaction fees.

Image Credits: pixabay.com

COMPARISON

Both the MF and UT gathers the investors’ money into a pool to make portfolios, which are managed by the professional investment manager. The major difference between these two investment schemes is in its structures. Basically, Mutual Fund issues redeemable shares while Unit Trust issues units. It is up to you to find an investment scheme that suits your lifestyle.

Sources: 1, 2, 3, 4 & 5

HOW THE OCBC 360 ACCOUNT WORKS

TIPS ON MAXIMISING THE OCBC 360 ACCOUNT

WHAT HEARTLAND BOY LIKES ABOUT THE OCBC 360 ACCOUNT

Search the site