MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

IATA says we might be able to travel leisurely after May or June 2021

Are you hungry to travel? I sure am.

We’ve kept to several COVID-19 safety measures for about a year now, and it’s also officially been a year since the World Health Organization (WHO) declared the virus outbreak a pandemic.

Singapore, alongside other countries, has fought hard to keep the numbers down, and we’re thankful that vaccine supplies are sufficient in our little red dot at the moment.

Furthermore, there’s good news from the International Air Transport Association (IATA) recently.

Return of personal travel

According to Alexandre de Juniac, the IATA director, in an interview with The Straits Times, leisure travel will return from mid-2021 as borders reopen to people looking to hop on a plane to a destination.

“We will likely start seeing a change in the air travel landscape after May or June this year,” Mr de Juniac said. “We at IATA are already working with states to design and plan protocols and road maps for the reopening of borders.”

Though the volume of travel by the end of 2021 will not be on par with pre-pandemic levels (which makes perfect sense), isn’t it fantastic news for peeps who are looking forward to meeting their friends and families living abroad?

IATA’s Travel Pass

Image Credits: NFCW

But we won’t be able to make our dreams come true without key protocols in place.

One of them is the IATA Travel Pass. It is a mobile health verification app that electronically stores information on passengers’ health and virus tests or vaccines status. This is essential as we take steps to revive travel.

In fact, Singapore Airlines will be the first carrier to test out the full deployment of the IATA Travel Pass. Passengers heading to London with a phone operating on iOS later this month will have the chance to partake in the trial.

Travellers will be able to use the app to:

Submit flight information
Book a COVID-19 test at participating clinics in Singapore
View the test results directly and allow check-in staff at Changi Airport to verify their status accordingly

“Our partnership with Singapore Airlines for the first full deployment of the IATA Travel Pass will help get the world flying again,” said Mr Nick Careen from the industry body.

Leisure vs Business

Some of you might be wondering if business travel will take priority over leisure ones. But Mr de Juniac foresees that personal travel will come back more quickly than business travel.

He shares that leisure journeys will definitely bounce back, but business travel will take up to 18 months to recover.

Since more companies have hopped onto digitalisation technologies over the pandemic period to adapt to changing times, there is indeed a lesser need for in-person work meetings.

What’s next?

For those eyeing travel-related news, look out for the International Civil Aviation Organisation (Icao)’s latest protocols on health and safety guidelines. It should be out by April 2021.

Also, based on Mr de Juniac’s prediction of Asia-Pacific emerging as the most robust region for global air traffic recovery, that’s enough to bring a smile to the faces of travel-deprived folks.

Watch the news report here:

Kids Online Account Opening Promotion

Saving is a habit that takes time to build. It’s never too early to start teaching your child the importance of saving and spending wisely. With My Account, you can keep track of how much you save and add features to meet your growing needs.

Start by opening a My Account for your child and receive a POSB Smart Buddy Watch with a Limited-Edition Strap (Worth S$45) to keep track of their daily spending.

Reward:

Receive a POSB Smart Buddy Watch with a Limited-Edition Strap (worth up to S$45)* when you deposit and maintain average daily of S$1,500 for a 6-month period.

*Limited to first 600 redemptions only, while stocks last.

How to be rewarded:

Promotion period is from 2 March 2021 to 30 June 2021.

Please refer to the Terms & Conditions and Frequently Asked Questions for more details.

My Account for your child

For existing POSB/DBS account holders, you can apply for a joint alternate My Account with your child online¹.

¹Applicable to children below 16 years old, and do not own an existing joint alternate My Account

Apply now

Please prepare the following required documents prior to your application.

About POSB Smart Buddy

POSB Smart Buddy is the world’s first in-school savings and payments wearables on your child’s wrist. It lets your child tap to pay in school and at selected merchants, check on balances, and track fitness levels.

As a parent, enjoy greater convenience in managing your child’s finances and encourage smart living and saving habits – all with an accompanying mobile app.

Find out more

7 red flags that show you’re spending way too much money

Do you believe that one of the foundations of achieving wealth is saving as much money as you can? A highly effective method of building your savings is to live below your means, and we can’t emphasise that enough in our articles.

Just in case you get us wrong, this doesn’t mean taking a vow of poverty and selling all your possessions away. It just means actively monitoring your spending and watching for ways to spend less.

Watch out for these red flags that may indicate you’re spending way too much money.

#1: Spending above your salary

Spending more money than you make is a bad habit. Overspending can put you in debt, which is incompatible with your aim for financial freedom.

To better evaluate your spending, make a list of all your monthly expenses – housing, food, bills, memberships, and subscriptions – and compare it to your monthly income. If your expenditure exceeds your salary, you must find ways to increase your earnings or decrease your spending.

For freelancers with variable incomes, this can be challenging. One strategy is to calculate your average monthly payment over a rolling 12-month period and use that number to budget. You may also use a more conservative approach by taking your lowest-earning month as a baseline to account from.

#2: Budgeting based on your pre-tax income

Image Credits: wincofoam.com

Constructing your budget on your pre-tax earnings can be a huge mistake. If you’re a Singapore Citizen (SC), Singapore Permanent Resident (SPR), or a foreigner who has stayed for 183 days or more, you would be well aware of Singapore’s income tax requirements.

The more money you earn, the more you pay in taxes. This means our take-home pay is less than our hourly rate or our salary would suggest. It is, therefore, unwise to craft your budget on your pre-tax income since you do not get to keep everything you earn.

Build your budget around your take-home pay minus the taxes for a more accurate financial review.

#3: Oustanding balances on your credit accounts

Having credit cards to supplement your income can be highly attractive. However, unpaid debt on your credit lines is detrimental to your financial health.

According to some local findings, the average interest rate on a credit card on our sunny island is about 25%. If you do not pay off your credit card in full every month, the remaining balance will begin accruing interest, and this may grow out of hand if not kept in check.

Debt can increase rapidly even before you realise it. Be sure to pay off your credit balances in full at the end of each month, and if you can’t, at least go past the minimum sum required to “get by’. This is because merely making minimum payments every month is a dangerous practice.

Should you find yourself unable to do so, it means you are spending too much on credit.

#4: Having a negative net worth

Image Credits: corporatefinanceinstitute.com

Investopedia defines net worth as the value of all of your assets minus your liabilities. If your net worth is negative, you owe more money than you own. Makes sense? If not, read that again.

This is not a desirable state of affairs for sure. To know your net worth, you can calculate it using Moneysense’s Net Worth Calculator. The numbers will help you take stock of your current financial situation.

For those who are severely indebted, with a net worth of – S$15,000 or less, you may wish to consider examining Singapore’s bankruptcy laws to help you repair your finances and start afresh.

#5: Housing expenses over 40% of your gross income

Experts suggest that your housing expenses should not exceed 30% to 40% of your monthly income. For example, if you bring home S$4,000 a month, your monthly housing budget should be somewhere between S$1,200 and S$1,600.

To find out your ideal housing expenses, simply multiply your monthly income by 0.3 or 0.4 to see what your monthly budget for housing expenses should be. If your rent exceeds this number, you may need to try and find a less expensive apartment and not survive just on your savings.

#6: Spending to keep up with social influences

Image Credits: motors.hongsehgroup.com

In our current age of Instagram and TikTok, it is easy to get swirled into the world’s neverending wants. We may see influencers, friends, or family members buying new items or taking expensive staycations and begin to wonder if we should do the same.

But before we buy that latest device or spend money on an extravagant restaurant date, we must ask if we’re doing this for ourselves or to impress someone else on the worldwide web? Is it worth finding money in the budget to keep up with appearances?

Spend your money wisely and avoid the trap of wanting the latest of everything because that will only lead you down the point of no return.

#7: Your savings are literally zero

An absence of savings is a common-sense indicator of excessive spending.

A healthy savings account can help you survive unexpected expenses medically related and help you prepare for significant life events like starting a family or even early retirement.

If your savings account is empty or underfunded, you are spending too much and saving too little. Finding small opportunities to save money will help get your spending under control and your savings back on track.

6 Things To Consider When Buying A Laptop

In 2020, retailers and PC makers saw an incredible spike in laptop sales after the Circuit Breaker measures implemented the closing of schools and non-essential work premises. Electronics retailer Courts said that it experienced an “overwhelming demand for laptops because of the work-from-home situation”. Moreover, online retailer Lazada said that their sales of laptops increased by 80% following the Circuit Breaker announcement.

Having your own laptop or desktop computer is crucial to fulfill your roles in school or at work. As we transition to a digitally-centered world, you may consider purchasing a laptop soon. I just bought mine yesterday and these were the specifications that I researched for.

#1: SIZE AND FORM

You need to make sure that you pick a laptop that best suits your needs and personality. Depending on what you plan to be doing on your laptop, look for a size that is right for you.
For people who opt for portability, you may go for laptops with smaller screens. Look for laptops that have a screen size of 12.5-inches or 13.3-inches and a weight of 1kg to 1.5kgs. Smaller laptops are ideal for people who work mainly one emails, spreadsheets, and presentations. On the other hand, a bigger laptop is suitable if you edit videos on a regular basis.

As an editor or gamer, you can opt for a 15-inch model. This type usually comes with a powerful hardware such as a dedicated graphics chip for creating multimedia content and gaming.

#2: WEB CAMERA

Yesterday, I was faced with a dilemma involving the laptop’s web camera. I can either opt for a laptop with a better web camera and a slower processor or a laptop with an okay camera and a faster processor. I opt for the latter. I find it more convenient to purchase external accessories than to upgrade a laptop’s internal system. You may want to do the same thing too.

With the rise of video meetings and online classes, it is time for the web camera to shine! The 720p camera in most new laptops is more than adequate for your daily use. When buying an external web camera, you may consider its additional features such as unlocking your computer via facial recognition. Check the location of the web camera too.

#3: CPU

In most cases, notebooks come with a Core processor from market leader Intel. For many users, they are satisfied with the performance of the Intel Core Processor. Core i3-based notebooks are generally found in entry-level systems, while Core i5 are found in mainstream computers. The high-end processors are Core i7 and Core i9.

In a similar fashion, AMD processors have different conventions such as Ryzen 3, Ryzen 5, Ryzen 7 and Ryzen 9. Ryzen 9 offers the best performance.

#4: GRAPHICS

Produced by a graphics chip, the visuals you see on a laptop screen play an important role on how your experience your device. This comes in either a part of the processor or a separate dedicated chip.

For people who play games or produce digital content, having a dedicated graphics chip offer more options when it comes to controlling the performance. Know that the gaming firm Nvidia recently refreshed its entire GeForce mobile graphics chips.

#5: MEMORY AND STORAGE

System memory or RAM affects the responsiveness of a computer and its applications. The 8GB RAM should suffice most users. Those who edit videos and photos may need more RAM.

Another option is the solid-state drives (SSD) that are faster and more reliable. You should expect to have at least 256GB SSD. Ultimately, your lifestyle will dictate your needs in memory and storage.

#6: PORTS AND CONNECTIVITY

When it comes to ports and connectivity, an ideal laptop must have the HDMI port or USB Type-A ports. Moreover, you must check how fast it can connect to the wireless connectivity as most of us will be relying on the Wi-Fi router.

Image Credits: unsplash.com

When buying a laptop, you must strike a balance between all these features and your budget. You need to make some compromises based on your needs and your current funds. It is rare to be in a situation wherein all your boxes are filled, especially when it comes to the price. Good luck!

8 questions to ask yourself before getting a personal loan

Are you in need of quick cash for an emergency? One of the most important factors when considering applying for a personal loan is the interest rate.

Whether you’re planning to go for the Standard Chartered CashOne Personal Loan (as low as 3.48% p.a.) or CIMB CashLite (3.5% p.a.), pause for a moment to think it through.

Ask yourself these questions before getting a personal loan.

#1: Why do you need the money?

There are many reasons you may wish to borrow money. Maybe you’re faced with medical bills or unexpected home renovations.

For those looking to pay off high-interest debt, applying for a personal loan would make sense too. For example, if you have a credit card debt at a 25% interest rate per year, it would be wise to take up a personal loan with a 7% interest rate to consolidate your debts and pay it off first.

Go ahead and get that personal loan if you know it’s for a good cause, such as reducing the interest.

#2: What is the interest rate?

Image Credits: Investopedia

Speaking of interest, here’s our next point.

Before you borrow money, understand that the lender will make a profit by charging you interest. According to Investopedia, interest is a charge applied to you, expressed as a principal percentage. And, of course, a lower interest rate is better for you as the borrower.

However, it’s not as simple as it seems. There are two rates to consider: Applied Rate (AR) and Effective Interest Rate (EIR). In short, AR keeps the loan principal as a constant over the life of the loan. In contrast, EIR calculates the reduction in principal as you pay down the sum.

Do more research if you are unsure of the terms.

#3: Are there other charges?

In addition to interest, there may be additional fees.

Possible charges include a fixed annual fee tagged to borrowing, a late payment fee if you miss a payment, or a change fee if you need to renegotiate your loan terms.

Some banks even charge an early repayment fee as early repayments affect a portion of their predicted profits. Be aware of these possible charges before you move forward with the application.

#4: Can you manage the loan repayments?

Image Credits: The Economic Times

When considering whether to take up a personal loan, you must decide if you can handle the repayments.

Once you know the interest rate, extra fees, and anticipated monthly repayment amount, make necessary calculations from your income to see if you can afford to pay it back.

To do so, you want to write out a detailed budget including your spending needs on groceries, household bills, and miscellaneous expenses. From the breakdown, see if you have enough leftovers to weather an unforeseen financial storm.

Yes, that’s for your rainy days.

#5: How will it affect your credit score?

Lenders use credit scores to decide whether to issue you a loan. Credit scores affect loan terms such as interest rates, tenure, and principal limits.

Your payment history, the ratio of debt to credit, the age and quantity of your accounts you own, and any derogatory reports such as loan defaults can affect your credit score.

If you think you can do without a personal loan this time around, then skip it. Ensuring that your credit is in good shape will help you get a better loan in the future when you seriously need it.

#6: What is your borrowing limit?

Image Credits: Yahoo Finance

Are you aware that The Monetary Authority of Singapore (MAS) has established a Credit Limit Management Measure (CLMM)?

It prevents financial institutions from lending new credit facilities to borrowers with debts greater than six times their monthly income. This credit limit helps to protect borrowers from getting into high debts too much to bear.

And of course, other than CLMM implemented by the authorities, other factors will also affect your borrowing limit. This includes your credit score, monthly salary, and the relationship you have with the bank.

#7: How reliable is the lender?

Be mindful that some people and institutions may not be worth your time and transaction in any situation involving money.

If a lender fails to run a credit check, seems disorganised, or cannot answer basic questions, be wary. You want to deal with a reputable banking institution and not one that agrees to a loan without reviewing your credit history.

#8: When will you get the funds?

Image Credits: Jmc Accounts

Most people seeking personal loans are racing against time. If that is a factor, you want to find out how long is the approval process. From approval to disbursement of the loan, speeds will vary from bank to bank.

Here are three personal loans promising instant processing times:

Final thoughts

The decision to borrow money should be considered carefully. Evaluating and understanding your loan’s reasons, the interest rates, loan repayments, and more mentioned in this article can help you make the best decision possible when seeking a personal loan.