MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

Surefire Ways To Gain Financial Willpower

If you lack self-control or you are low in willpower, you may constantly catch yourself wondering where your paycheck went. Give these three strategies a sincere shot! You will be glad that you tried.

TAKE ONE STEP AT A TIME

To understand how willpower works, you must imagine stretching a ribbon for seven days straight. The ribbon will eventually tear. The same principle applies to your willpower – “it loses its strength when you exhaust it”.

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Willpower affects the way you spend. Compared to people who have not exerted their willpower, people who are running low on willpower spend an increased amount of money and purchased additional items. It goes to show that multiple decisions can test your willpower’s strength. Thus, it is best to take one financial decision at a time. Do not overwhelm yourself!

CHOOSE A TRUSTED ALLY

Having a depleted willpower is not a problem because you can always search for someone whose willpower is stronger than yours. Choose a trusted ally that will support you for a common financial purpose. The ally may either supervise you or help you regulate your money.

If you trust the person enough (e.g., your parent or spouse), ask him to keep your money and not give it back until you have reached your goal. Alternatively, the person can regularly ask you how much you have saved and spend in the past two weeks. Be careful who you trust!

LEAD A CASH-ONLY LIFESTYLE

One of the primary reasons why institutions advocate credit cards is that it has the ability to distract the holder from how much they are spending. This is problematic for people who lack self-control or are low on willpower. They can pay their monthly bills thru credit without realizing the consequences of their purchases, until their minimum credit card bills became huge. It will take them years before they can pay off everything!

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The solution for this scenario can be as simple as leading a cash-only lifestyle. If you do not have enough cash to cover an expense, then you must skip it or save enough money for it. Commit yourself to this lifestyle for at least eight months. When you know what you are doing, you can eventually use credit in a smart way.

Sources: 1, 2, & 3

Useful Tips On Handling Financial Jealousy

Snapchat’s latest update called the “Snap Map” shows that we have the luxury to peep into the lives of others. Social media has given us the ability to know what are “friends” are doing in real time. This constant exposure to the public lives of other people makes us vulnerable to social comparison. Well, how would you feel if you saw your friends partying without you? You may feel left out or envious. I cannot blame you!

Let us apply this act of “peeping” into the meaningful aspect of finance. Say that you have a co-worker who always wears the latest designer bags and carry the latest gadgets. Not to mention, her boyfriend owns a fancy sports car. You may perceive her as a successful person and the envy monster may kick in. However, you are only seeing one side of the story. A side that focuses on the seemingly perfect image. You do not know the half of it! Your co-worker may be caught in a downward spiral of shopping addiction and her boyfriend could be in massive debt.

Financial jealousy typically occurs when you judge a person based on the situation’s exterior appearance. Thus, my first tip is to get your facts straight. The grass is not always greener on the other end. It may seem like a person has his or her life sorted out, but money is not the answer to everything. Some people find meaning in charity and others find it in family.

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Speaking of meaningful relationships, your money habits are influenced by the people whom you interact most with. Social situations highlight what you can and cannot afford. This is why you need to choose your friends and social activities wisely. Surround yourself with people who inspire your financial future. Be with individuals who have similar money beliefs and money management strategies. Also, you may seek advice from financial professionals.

Finally, you can deal with financial jealousy by altering your perception. It has been stated that 1 in 36 Singaporeans is a millionaire. It is easy to make financial comparisons when you are exposed to some of the most richest people in the world. But, do not forget about what you already have. Many people from underdeveloped nations have limited access to clean water and healthy meals. While you have Medisave, public healthcare does not exist for some countries. While you have access to public housing, other people are homeless. Consider yourself wealthy in the basic necessities of life.

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Rather than eating your heart out due to jealousy, use other people as a motivation to set new goals. Do your best to achieve these improved financial goals!

Sources: 1 & 2

How To Avoid Spending All Your Paycheck Right Away

When you are working around the clock, the end of June signifies one important thing. And that is? Payday is fast approaching! You can either stretch every cent you receive or waste it all in one day. The choice is yours.

A particular story comes into my mind when I dwell upon this topic. You see, I decided to reward myself after receiving my paycheck for the month of May. Do not worry about finances just yet! I allocated 10-15% of my salary for leisure and relaxation purposes.

I waited until the next day to stroll in the nearby shopping centre to avoid the massive crowd. I chanced upon a relatively vacant fitting room with merely 5 people (including the staff). With no intention of eavesdropping, I listened to the playful exchange between the two saleswomen. I was trying several looks on and it took me a while to change into them. To my surprise, the playful exchange got really deep! One lady elaborated how she blew her salary right away. She loaned the money to her family member. Not to mention, she partied the other night with some friends. She was upset to be trapped in a financial dilemma. Who wouldn’t be?

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Yes! It is not nice to eavesdrop on someone even by accident (sorry about that), but her situation can enlighten you. It made me realize that some people are struggling to control their money after receiving it. If you are caught in this situation, here are some things that you can do to turn things around.

TRY STICKING TO A BUDGET

This may sound utterly obvious and totally uncool, but you need to craft a realistic budget and stick to it. Planning how you will spend your paycheck allows you to prioritize your bills and schedule other expenses. It lets you account for your hard-earned money. If you cannot establish a budget with a paper, you can always use a free budgeting app.

Weigh between your needs and wants. While it is cool to have the latest gadget in the market, it may not be necessary. Stick to your budget! Remember that it is better to own items than to owe them.

GET YOUR PRIORITIES STRAIGHT

How many times have you heard the advice to “keep your priorities in place”? Do you follow it yourself? Keeping your priorities intact allows you to secure your financial future. One of my top priorities is growing my savings. I am gradually fulfilling this by accounting for every dollar I make.

Accounting for every dollar you earn takes budgeting to the next level! It assigns a label for every chunk you make. I found that “Envelope Budgeting” was helpful for this task. With envelope budgeting, I can easily allocate a specific percentage for my expense categories. It is alright to place a responsible amount for splurging. You deserve it!

AUTOMATE YOUR SAVINGS

Did you know that it is possible to sock away your income as soon as you get it? You can achieve this by automatically depositing your salary into your savings account. Award-winning finance journalist Jean Chatzky is an advocate of this. “Automating savings is the first thing everyone should do with their paychecks,” she said. She went on by saying that you cannot spend the money you do not see. I certainly agree! It is easier to save money without the tangible temptations.

In Singapore, there are institutions which allow you to automate your money such as the POSB eMySavings Account. This automatic monthly savings account allows you to keep S$50 to S$3,000 during each “savings date”. You are free to choose a schedule that works best for you.

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From building an emergency fund to gaining self-control, there are other ways to avoid spending all your paycheck immediately. You just have to be creative!

Sources: 1 & 2

3 Things That Uni Students Should Not Spend Their Allowance On

Many university students have the discipline to save their allowance, but this does not mean that they are spending their money on the “right” things.

#1: FANCY DESIGNER GOODS

While I was completing my tertiary education, I noticed how some people flaunted their LOUIS VUITTON or MCM Worldwide bags. I wondered how there were able to afford such a splurge as mere students. With limited financial capacity, it is not practical to collect luxury items. Invest on a quality backpack instead.

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Not to mention, it is seldom that somebody cares about what you are wearing.

A friend of mine rarely showers before going to school. She rationalized her actions as a typical behavior from the norm. Everybody was doing it so, why cannot she? The point was that majority of students would not care about how you present yourself. You are not there to treat the school as your catwalk! Your top priority is to learn after all.

#2: FLASHY ROOM DECOR

As a young adult, you have the privilege to decorate your own room. You definitely want to feel relaxed in your own space – be it a dorm or a hostel. However, you do not have to shell out too much to do so. Mount some family pictures and make your own ornaments. There is no need to buy a lot of new things as you will not keep your furniture for long.

#3: FREQUENT EAT OUTS

It is impressive how Singapore embraces racial harmony. That said, it is common to be friends with international students. Many of these students reside in the school’s approved hostels. Due to their living situation, some opt to dine out. Who can blame them? Dining out is utterly convenient. You do not need to prepare your food or wash the dishes. However, frequent trips to the nearest restaurant or pub can quickly exhaust your allowance.

You would not even realize how much you are spending until it is too late! Put a realistic budget in action, if you do not want your finances to wore out.

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BONUS: Let us talk about textbooks. This expense category can be uncertain at times. Universities tend to provide a long list of reading materials. The mandatory and recommended books may not be clearly written out. Before you spend your entire allowance on the comprehensive list, be sure to buy what you will actually use for the course. Find second-hand books from the last year’s students or from the Bras Basah Complex. There are free online resources too!

Sources: 1 & 2

Rising popularity of short time frame trading in forex

Traders who are scalping the market do not only trade the market to make a quick profit. There are also people in the market who scalps the market to check out this strategy. This strategy is highly rewarding to successful traders in the market who can understand the market trend. If you are a new trader and want to make a lot of money, you can start scalping. It is not a good choice for the new people in forex to scalp as their main strategy. There are many long-term strategies in the market and you should follow these strategies to make a profit in your beginner account. Also, you need to have a lot of money in your account to scalp the market. The professional scalpers at Singapore always trade with a huge trading capital since they know in order to reduce the risk exposure in short time frame trading they will need a decent balance. But a big trading account is not going to ensure your profit factors in this industry. As short time frame trader, you must have a very clear knowledge in this industry.

Why traders scalp in forex?

Most of the traders prefer scalping in the forex trading industry since it allows them to book their profit in the market very quickly. Unlike the long term traders, they don’t wait for days and weeks to lock their profit in the market. They simply execute high lot size trade in the market and within hours they close the trades either with profit or loss. But in order to become a profitable short time frame trader, you must have a very clear understanding of the basic of the forex market or else it will be extremely difficult for you to survive in the long run.

They are greedy: Not all, but most of the traders who scalp the market are greedy. It is not that every trader who uses this strategy are greedy, but most of them are. Many interested people who haven’t opened a Forex account have heard of scalping and how easy it is to make money in Forex. To them, scalping is the only way to become rich in Forex. Out of greed, many traders scalp in forex. However there some expert traders trading CFDs with an extreme level of precision in the short time frame. If you want to become such an expert then you need to learn the fundamental and technical analysis very precisely. A single mistake is enough to wipe your entire trading account in the market.

Think of this strategy as a quick rich scheme: Many traders also want to get rich quickly. They have been looking for a perfect strategy where they can make money quickly in their accounts and do not have to trade all day. Scalping is their answer. They think of this strategy as some quick rich scheme in the market of Forex.

Know the markets: traders who scalp are very experienced. They can understand the market in any second. They trade the market in a very short timeframe and they do not need hours to figure out the market. With experience and knowledge, they can tell where the market will go. They trade the market for this reason to use their experience to make quick money.

Love fast results: if you love fast results, you will love scalping. Traders want to make money quickly in the market. Scalping gives them this opportunity. Though there are risks, the professional traders trade with this strategy. The fast result of scalping is one of the reasons it has become popular among the traders though it has many bad sides in trading.

Summary: Trading is nothing but running a sophisticated business. As a professional trader, you will always have some losing trades but you need to learn to take managed risk in the market. Always try to execute your orders by using rational logic. Last but not the least try to trade in favor of the long-term prevailing trend.

Why traders scalp in forex?

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