How To Deal With The Toughest Questions About Money

Nurturing an honest and educational discussion about money is highly encouraged. It is helpful to share personal saving tips and ways to cushion the challenging economy. However, it is easier to travel deeper into the conversation as you get more familiar with someone.

A nosy or rude question about money can push your pleasant discussion into an inaappropriate territory. Prevent judgment or unsolicited advice from coming by considering these approaches:

#1: HOW MUCH MONEY DO YOU MAKE?

One of the most shocking encounters in my life was when my uncle’s neighbor directly asked how much I made. This is an inappropriate question to ask to a person you met for the first time. I wore a smile on my face and firmly said: “I am sorry, but that is personal. It is not something that you need to be concerned with.”

You may approach the same situation in a lighter manner by saying: “I earn enough to cover my needs and reasonable wants.”

#2: HOW MUCH MONEY DOES YOUR SPOUSE EARN?

When you are exercising a in-depth disclosure with your friends, it is easy to slip an invasive question from time to time. One person may ask how much your spouse earns per month. Divert the topic by saying: “We make enough money to enjoy your pleasant company today.”

If you are unsuccessful in changing the course of the conversation, politely state that you do not discuss financial matters outside of your marriage.

#3: ISN’T THAT TOO EXPENSIVE FOR YOU?

A concerned family member or a close friend may bluntly ask you about an item he or she perceives as hefty. Alleviate the worries of your “asker” by elaborating how good you felt about your purchase. Also, you may share how much thought you exhausted before purchasing the said item.

I shall illustrate this scenario in the following dialogue below.

Gabby: How can you afford to purchase the new GoPro?
Jayden: I did my research. I shopped around Singapore to find a camera that I really desire. Do not worry about it! This GoPro is still within my budget.
Gabby: Okay lah!

#4: HOW MUCH DID YOU SPEND FOR YOUR FLAT?

Real Estate in Singapore is a tricky subject. People may judge you for either spending too much or too little for your nest. Stay on the safer side by keeping your answers vague. Consider saying something along these lines:

a. It is more that we expected, but less that the actual asking price.
b. It was above our asking price, but within our budget.

Sway away from this matter by inviting the person as your guest in your upcoming housewarming.

#5: MOM AND DAD, ARE WE RICH OR POOR?

Children are immensely curious by default. As early as primary school, they begin to define themselves by observing the similarities and differences between them and the society. Their friends may brag about how much they have, but your child cannot fully appreciate what rich or poor actually means. This is why it is your responsibility to shape your kid’s definition of what it means to be well-off.

You can impart that the essence of being rich does not necessarily equate to a household’s net income. For instance, you may say that your family is rich in the love and presence of each other.

#6: HOW MUCH DO YOU EXPECT TO EARN IN THIS POSITION?

The juiciest job interview questions are related to salary. Your potential employer may ask you about the specific range of expected salary in order to make an offer. It is best to utilize a positive and direct response to avoid triggering the interviewer’s tougher side.

Image Credits: pixabay.com

Image Credits: pixabay.com

Say that I was put in this situation. My response will be: “I would greatly appreciate if you could make an offer that is based on the budget for this position. We can negotiate from there on.”

Sources: 1, 2, & 3

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How To Make Safe Investments In Uncertain Times

The world is seemingly getting smaller every day. Online platforms, newspapers and financial television stations usually monitor events happening in one country that can have effect on other countries worldwide. People are now updated and interconnected compared to any other time in the history. It is without doubt that globalization has its own advantages, but when economic crisis, global recession, war and trade imbalances occur, it suddenly leads to the idea of making safer investments and working on government deficits. The occurrence of such uncertainties can even confuse experienced investors.

Uncertainty

Every time an individual risks his money for a chance to make profit, there is always a level of uncertainty. When fresh threats such as political unrest, recession and war arise, levels of uncertainty increase rapidly as organizations can no longer correctly predict future trends and earnings. As a result, influential investors will cut their holding in stocks significantly where they consider it unsafe and transfer their funds to other sectors such as government bonds, precious metals and money –markets ventures. The results of the sell-off when large portfolios are repositioning themselves, causes the stock market to be unattractive for both small and big investors.

Effects of uncertainty

Uncertainty can be termed as the inability to predict future trends and events. Investors cannot be able to predict the possibility of a recession, how much it will cost, when it going to start or end or which organizations will be able to make it through without being affected. Most organizations usually make predictions of productions and sales trends to give public the confidence to invest in normal market conditions, but changing uncertainty levels can result in inaccurate prediction. Uncertainty can affect economic situations both at macro and micro levels. At micro level, uncertainty focuses on particular companies within an economy that is faced with recession or war, whereas on the other hand, uncertainty on the macro level focuses on the economy as a whole.

On a micro- level company perspective, uncertainty is a major concern for companies that deal with consumer goods and services on daily basis. Consumption can fall rapidly if there is a threat of recession as customers refrain from buying goods and services. As a result, uncertainty can cause organizations to lay off some of its employees in certain sectors to reduce the effects of lower sales. Uncertainty levels that surround company sales also affect the stock market.

On macro level perspective, uncertainty is expanded when the countries at recession or war are major consumers or suppliers of goods and services. For example, a country that supplies huge amounts of oils goes to war, uncertainty concerning the levels of globe oil reserves would increase significantly.

Another macro- level event that brings in uncertainty is the devaluation of exchange rates. Countries that are faced with recession and war are deemed to be unstable. Therefore, investors tend to move their currency and investments away from these countries.

How to react

When uncertainty situations heighten, the best weapon is to be well informed about all the events occurring worldwide. One can research individual companies, read newspapers and watch financial televisions to keep updated. It is also critical to analyse sectors that are likely to gain more and the ones that are going to lose during the crisis and choose a long term plan to invest. In addition, uncertainty times are also a good opportunity for investors who position themselves to take advantage of the situation. Brilliant investors will search for companies that provide goods and services that will be in high demand when the situation normalizes. However, it is very hard to commit investments in uncertainty situations, but one can reap huge benefits in the long run.

Online Forex traders such as CMC markets and their clients are good example of investors who should be updated about uncertainty. CMC markets operate in many currencies and therefore it is critical to monitor the performance of every currency. When a certain currency becomes weak because of a various uncertainties, it is advisable for traders to change and trade with other stronger currencies. Where a possibility of situations normalizing, traders can take the risk and hang on to reap the huge benefit that’s come along with such situations.

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Financial Resolutions That You Can Surely Fulfill This 2017

For the lack of a better term, 2016 was a “rubbish” year for many people around the world. Surprising political and social shifts occurred. Just take a gander at the newly elected President of United States! Nonetheless, most of us are ready to bid farewell to the yesteryear.

As you welcome 2017 with a bang, you may build a list of resolutions to signify a clean slate. Give it a go! While many Singaporeans are committing to adjustments surrounding their physical well-being, it is healthier to add several monetary resolutions.

Start becoming financially fit this 2017 by following these suggestions:

1. BE PROMPT AT ALL TIMES

There is a reason why money goes hand in hand with time. As the job market becomes increasingly competitive, most companies have minimum tolerance for employee tardiness. Keep your source of livelihood by always being on time.

You do not need to exhaust your resources or skills in order to remain prompt. You simply have to synchronize your clocks and set an appropriate alarm.

2. SAVE MORE ON ELECTRICITY BILLS

The top three appliances that spike up your energy consumption are the refrigerator, the air-conditioner, and the water heater. We became more reliant to these appliances due to the pressures of the contemporary lifestyle. This is why it difficult to give them up! So, save money by making small yet efficient adjustments.

Make energy-saving strategies a part of your 2017!

3. SWITCH TO A BETTER SAVINGS ACCOUNT

Savings accounts in Singapore were not shaped equally. Some may require you to have a minimum deposit of S$1,000, while others may not. To get most of the benefits of your savings account some encourage you to transact more, while others encourage you to withdraw less.

Earn the most profit out of your account by switching to an institution that offers the highest interest rates.

4. SEARCH THRU HOME FIRST

Before committing to a significant purchase, search inside your own home first. There are multiple ways to use your resources. You just have to be creative!

For instance, you may use your old drawer as a diaper changing table. You may also learn how to cook on a stovetop instead of replacing your broken microwave.

5. CUT DOWN ON YOUR TELEVISION INDULGENCE

The countless hours you spend in front of the television can drain your finances in the long run. Instead of immediately transitioning to the “couch potato mode”, do something productive in at least 60 minutes. You may also cancel your cable subscription and opt for watching shows at Toggle.sg.

Image Credits: pixabay.com

Image Credits: pixabay.com

Toggle.sg lets you watch episodes of your favorite shows at Channel 5, Channel 8, Channel U, Okto, Suria, and Vasantham – for free! But, viewing of premium content is on a subscription basis.

6. REDUCE YOUR WATER CONSUMPTION

Singaporeans do not usually worry about clean and fresh water. However, the global supply of consumable water is getting scarce and more expensive with each passing year. Consider cutting down on your water consumption to save your pocket and Mother Earth.

7. WIDEN YOUR REPERTOIRE OF FINANCIAL KNOWLEDGE

Books will always serve as a clever investment. Some books will offer you a glimpse inside the minds of the greatest businessmen, while others will uncover strategies to become better investors.

Create a realistic list of all the financial books that you want to conquer within the year. Set an achievable goal for the amount of pages or books that you can accomplish each week. You might as well start as early as now!

8. MAKE THINGS EASIER

Aren’t you tired of the massive chaos and complexity that 2016 brought? Make things easier for yourself by closing or cancelling the accounts or cards that you are no longer using. Then, set up automatic transfers. Some institutions allow the employer to automate your salary in a bank account that is solely for your savings. Patronizing this method will lessen the temptation of immediate spending.

Image Credits: pixabay.com

Image Credits: pixabay.com

Sources: 1, 2, & 3

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Four Financial Strategies To Usher The New Year

STRATEGY #1: REVISE YOUR HOUSEHOLD BUDGET

Overspending during the festive season happens to most of us. I cannot blame you! The competitive prices of the shops as well as the constant sales are undeniably tempting. This is why the New Year is a good time to revisit your previous household budget. Understand what went wrong in your current budget to help you succeed in 2017.

Start by making a detailed list of your total income. Then, collate all your annual expenses including debts. Build a robust budget plan out of these information. Do not forget to pay off all of the extra debts that were incurred during the season. Be realistic when it comes to how much you can pay at a given point in time.

STRATEGY #2: BEGIN ON A HUMBLE NOTE

Have you ever noticed that the individuals who partake in those “crash diets” (i.e., defined as a method of losing body weight quickly by eating very little) eventually bounce back to their previous figures? The significant relapse can be due to the dramatic and sudden changes in actions. It is unlikely that change will occur if you speed up the process. The same idea applies to your finances.

Image Credits: pixabay.com

Image Credits: pixabay.com

Beginning with a humble note entails welcoming the new year with small and simple financial goals. This strategy is smart as it helps you to build confidence and momentum to achieve more complex and longer objectives. Learn how to adjust your behavior by reading the book entitled, “Investor Behavior: The Psychology of Financial Planning and Investing“.

STRATEGY #3: SET REGULAR REMINDERS

Say that you are done planning out your short-term and long-term goals for 2017. Put your creative juices to test by devising ways to remember those objectives. Personally, I use technology to create visual lists that I can view in my laptop and in my mobile phone. It helps me to monitor my financial progress.

If staying prompt is a part of your New Year’s resolutions then, you may consider setting up payment reminders. Do not tolerate late fees and payments by placing a notification on your eletronic calendar.

STRATEGY #4: PAY YOURSELF FIRST

Conquer a certain goal or eliminate a certain debt throughout the year by using one of the most potent strategies – to “Pay Yourself First”. This works well if your resolution focuses on saving money. Set aside a portion of your income as soon as you receive your paycheck. Allocate this portion to your CPF, retirement, or savings account.

Image Credits: pixabay.com

Image Credits: pixabay.com

This means that the first bill that you shall fulfill is your own’s.

Sources: 1,  2, & 3

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Surefire Ways To Save Money On Your Next Income Tax

Anyone who takes part in trade and business is chargeable with tax. It is known that tax rates in Singapore are relatively lower compared to other countries in the world, making it more attractive for individuals and corporations to participate in some form of exchange in business.

Despite the relatively lower tax rates, no one entirely enjoys the act of filing for taxes! This is why you must employ creative ways to save on your next income tax. Consider these suggestions:

1. TAKE PART IN SUPPLEMENTARY RETIREMENT SCHEME

The Supplementary Retirement Scheme (SRS) is part of the government’s financial strategy to help Singaporeans increase their saving as they age. It is a type of retirement savings scheme that is voluntary, where anyone who has an SRS account may contribute any amount they want, which is still subject to a cap. The maximum contribution is capped at S$15,300 in 2016, a slight increase of S$2,550 from last year’s cap.

The more you save for your retirement using the SRS, the less you pay for your income tax. That being said, two apparent benefits are seen when contributing to SRS. The first being, for every dollar contributed to your account, taxable income will be reduced by a dollar. The second being, 50% of your SRS savings will not be taxed. Additionally, you are eligible to spread your withdrawals over a 10-year period.

2. HIT TWO BIRDS WITH ONE STONE

Fulfill your duty as a steward of goodwill and your duty as a responsible citizen by donating in accredited institutions. Several forms of donation are claimable. The following types of donations will qualify you for a double tax deduction (twice the amount of the donation):

a. Cash Donations
b. Shares Donations
c. Computer Donations
d. Artefact Donations
e. Public Art Tax Incentive Scheme
f. Land and Building Donations

For instance, a donation to the Singapore museums that have obtained the Approved Museum Status with the National Heritage Board is tax deductible.

Related Article: Basic Guide To Taxation In Singapore

3. REAP THE BENEFITS OF CPF CASH TOP-UP RELIEF

If you are interested in increasing not only your retirement savings but also the retirement savings of your loved ones, you might want to consider the CPF Retirement Sum Topping-Up Scheme.

You will be entitled to a dollar-for-dollar tax relief at a maximum of S$14,000 per annum. This entails a cap of S$7,000 for the individual and another S$7,000 for the family members (T&Cs apply).

Image Credits: pixabay.com

Image Credits: pixabay.com

Paying income tax can be painful to your wallet. This is why you must take advantage of the many ways to claim tax relief or rebates.

Sources: 1,  2, & 3

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