5 Commandments Of Borrowing Money

Whether you are borrowing your friend’s stilettos for a wedding or your mother’s mixing bowl for a party, we live in a culture that embraces the culture of borrowing.

There are certain rules involving this act such as dry-cleaning the suit that you borrowed. But, do you know the rules involving money? Here are just some commandments to get you started!

#1: THOU SHALL NOT BORROW BEYOND YOUR MEANS

Your hard-earned income must not revolve around debt repayments. Exhaust your resources to borrow an amount that is within your means. If you cannot afford an item then, skip it first! Save enough money and direct it to completing a purchase.

Many financial experts recommend that you maintain a Debt-to-Income ratio of 20%. How do you calculate this? Simply add up your monthly debt categories (i.e., excluding mortgage) and divide the total amount by your net monthly income. Ask for your partner’s help, if necessary.

#2: THOU SHALL NOT PAY LATE

There are several reasons why Japanese citizens uphold the value of time. For starters, paying on time is one of the vital rules of borrowing money.

It goes without saying that late fees or increased interest rates add insult to injury. Not to mention, being late can dramatically lower your credit score. In the long run, your bad track record will be reported to the credit bureaus.

#3: THOU SHALL NOT BORROW FRIVOLOUSLY

Borrowing money is an act built on a strong purpose and an intention of repayment. For debt categories that yield a sense of profit such as for education or for business, loaning money makes sense. The same ideal applies to loaning items that you will use for a long period of time (e.g., a car).

However, you must contemplate on loaning money for fleeting pleasures. Do you really need the latest gadgets in the market? Is attending an international music festival a crucial part of your life? Are you willing to spend thousands of dollars on a wedding anniversary weekend? Lastly, is a designer bag better than a functional one? Aim to borrow money for the right reasons.

#4: THOU SHALL NOT BE FINANCIALLY PRESSURED

Close your eyes and envision the last time you experienced social pressure. Was it your first day at a new workplace? Or, does it go way back in your secondary school days? At a certain degree, all of us felt pressured to do something we do not want to. It exists in all forms including financial situations.

In said challenging times, a deperate move that people make is to borrow money. You get trapped into a situation that unable you to make smart financial situations. Combat this by creating an emergency fund. Cushion your financial problems and continue to cultivate this fund even when you are experiencing debt. Please do not borrow or lend money to friends or relatives, if you are solely pressured into doing so!

#5: THOU SHALL NOT COMPARE LOANS CARELESSLY

Upon entering a new field, my basic instinct is to do my research about the company. Before travelling to a new country, my basic instinct is to do my research about their culture. What basic instinct do I apply before taking on a loan? Well, research of course! I recommend that you do the same thing too.

Image Credits: pixabay.com

Comparing loans is more than the mere act of scoring the lowest interest rates. You must carefully read thru the essential elements such as penalties and add-ons. For instance, some insurance companies include costly add-ons such as specific life insurance. The extra elements will increase the interest rate of the money that you borrowed. Thus, you must approach everything with extreme caution.

Sources: 1 &2

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Which Credit Cards are the best for Holiday Shopping in Singapore?

With the onset of the Christmas season, Singapore nationals will soon start spending big on gifts, decorations and more both online and offline. As a result of this enhanced spending, people will be dependent on their credit cards. During this season, many banks also come up with rewards and promotional offers. One practical step to reduce the effect of your holiday expenditure is to judiciously use credit cards to earn miles and points.

There are some who like to shop online while there are some who prefer going to a store. In Singapore, it is certainly worthwhile to use the right card for holiday shopping. With substantial rewards, credit cards will help you make the most of your money assuming you pay off all your debts on time.

Cards with additional categories on shopping

Cards that offer bonus points on shopping provide faster earnings for particular types of purchases. For example, 5% cashback or 25 miles for every dollar spent on purchases made at online retailers and stores. During the last couple of months of the year, these credit cards take advantage of holiday spending by offering incentives on purchases made at retail stores with rebates, reward points and additional perks.

So if you are looking to apply to any of these cards, you must first consider how frequently you shop. Many cashback cards that banks introduce during the holiday season have a minimum spend requirement. So, such cards will not be useful for infrequent shoppers. They should rather opt for more generic cards with good overall rewards rate.

Cards with welcome offers

Many banks also offer cards with sign-up bonuses. And, it is also a useful method to make the most of getting returns on your additional holiday spending. There are cards that offer welcome bonuses worth up to S$400, but to get that, you may have to spend big in the beginning. For example, several cards call for a minimum spending of worth thousands of dollars during the first couple of months to be in the running for the bonus miles and points.

While it may seem to be a huge amount, a regular customer is expected to purchase gifts and clothes worth thousands of dollars during the holiday season. For those who cannot afford to spend a hefty amount, there are several budget-friendly offers such as S$100 cashback when you spend $500 in the first month.

Cards with 0% APR

If you have done too much shopping and you have overshot your credit limit and the balance at the end of the month is overwhelming, a credit card with 0% APR will come to your rescue. A card with a 0% APR on recent spending for a fixed time can help you fund your holiday expenditure.

Such cards will have no interest rate on recent purchases made in the last 3 to 12 months. This will give you enough time to pay your holiday expenditure without any interest.

Let us now take a detailed look at some of the most popular shopping credit cards both online and offline:

DBS Black Card

With DBS Black Card, you will get the following shopping benefits:

  • Opportunity to earn cashback on shopping done overseas.
  • 5% cashback on shopping at stores for personal care, furnishings, electronics and more.
  • 5% cashback on shopping for groceries, bags jewellery, shoes, clothes and more.
  • Offers 0% APR.

However, you will have to spend a minimum of S$700 every month to get the cashback on relevant categories and there is a cap of S$70 per month with cashback on this card.

Citi Rewards Card

With Citi Rewards Card, you will get 10 rewards points for every dollar spent on bags, shoes and clothes. You will get to earn rewards points even for shopping done overseas. However, the points that you will earn are capped at 120,000 points every year and will remain valid for five years.

OCBC Robinsons Group Credit Card

With OCBC Robinsons Group Credit Card, you will get the following shopping benefits:

  • 5% rebate at 18 retail brands.
  • 10% rebate on shopping worth S$5,000 at Robinsons and Marks & Spencer.
  • No cap on rebates.
  • Rebates are applicable over and above the prevailing discounts and promotions.

 

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You Must Adapt These Habits Of Wealthy People

#1: IMBIBE A MOTIVATIONAL MANTRA

In the hustle and bustle of the city, it is easy to absorb the load of the tasks at hand. Getting distracted with other elements lets you lose the connection between what you are doing and what you are feeling. Many people combat this by practicing Mindfulness. Mindfulness is the practice of purposeful directing your attention to the present and accepting everything without any judgment.

Image Credits: pixabay.com

Motivate yourself during the practice by following a mantra. Firstly, you must search within to uncover what inspires you. Secondly, you must create a positive statement that you will repeat (to yourself) every morning. Lastly, you must breathe deeply and relax.

#2: THE EARLY BIRD CATCHES THE EARLY WORM

Admit it! You may be experiencing an endless cycle of clicking the coveted snooze button. Trying to escape the alarm clock may lead to waking up late. Imagine rushing to work because you only have 20 minutes left! This habitual procrastination is costing you. Not only are you at risk of coming late, but you are diminishing your sense of control. Furthermore, you tend to forget things when you are rushing.

According to Tom Corley, the author of “Change Your Habits, Change Your Life”, nearly 50% of his wealthy participants get up at least 3 hours before their work starts. Having extra time to prepare allows them to set a right frame of mind.

#3: MAXIMIZE YOUR BRAIN’S BANDWIDTH

The luxury of having multiple options can lead to exhausting your brain’s bandwidth. If you used up your energy on a series of small decisions then, it would be harder for you to process big decisions.

As an avid follower of the Silicon Valley, you probably noticed that Facebook’s Mark Zuckerberg is mostly into grey shirts. His primary reason for his limited closet is to minimize his decisions each morning. Similarly, Apple’s Steve Jobs wore his renowned black turtleneck top and jeans. Influential people focus most of their energy toward productive elements.

Another upside of keeping your wardrobe simple is its ability to help you save money. You do not have to wear the same shirt or same outfit everyday! Just avoid hefty designer clothing by purchasing basic clothes from thrift shops or year-round sales.

#4: BENEFITS OF A BOOKWORM

It has been long accepted that reading books can bring excellent benefits. Said benefits include widening your vocabulary and exercising your imagination. Incorporating literature into your bedtime routine is healthier than scrolling thru the sea of social media.

Before you pick the latest romantic or crime novel, I have a tip for you! Mr. Corley suggested that 85% of his wealthy participants prefer books that focus on self-improvement. They read at least 30 minutes per day. Achieve more by reading about helpful skills, rather than reading solely for entertainment.

#5: TURN YOUR FANTASY INTO REALITY

Research showed that spending at least two minutes for goal-oriented visualization and positive thinking can improve your mood and focus throughout the day.

I am a firm believer of meditation and its ability to shift your thoughts. Spare some time for this and your “quiet reflection”. During this reflection, you must map out your week and contemplate on your future goals. Do not limit yourself to financial goals! Take notes, if necessary. Follow these notes to ensure that you will be more efficient.

#6: SET SMART FINANCIAL GOALS

Wealthy people develop a habit of financial goal setting on their own or through professional help. Apply the same ideal by writing down your financial goals with a witness (e.g., spouse or a close friend) and contemplate the monetary milestone you would like to accomplish in the next 2 to 5 years.

Image Credits: pixabay.com

Do not forget to track down your monthly progress!

Sources: 1 &2

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Key Signs You May Be Heading for Bankruptcy and Not Even Know It

bankruptcy

When you hear the word “bankruptcy”, you might have found yourself forming a mental image of a destitute and homeless person begging for money on the street while carrying a sign that says, “Will work for food”. While it might sound a bit too extreme for an outcome of bankruptcy, the stigma surrounding the term itself isn’t entirely unfounded as bankruptcy usually serves as a last resort measure that a person considers only when all other options for repaying the money owed from a creditor have already been exhausted. Thus, you would want to avoid heading straight into bankruptcy as much as possible by knowing some of the key signs that you should watch out for so that you can try your very best to remedy them before it’s too late.

What Are Some of the Key Signs That You May Be Heading for Bankruptcy Without You Even Knowing It?

While it’s completely normal to incur debt from a creditor as long as you can commit to timely repayment of the money that you borrowed from them, you might have taken up too much debt so that you’re unable to get through a single day without thinking of how you can pay your creditor back. As much as you’re putting off the idea of filing for bankruptcy, if your debt has grown to become increasingly unmanageable that you could barely settle it yourself, you would want to identify these key signs that you might be headed for bankruptcy without you even knowing it:

You’re making only minimum payments for your credit card.

Every credit card billing statement has a minimum amount due, but it doesn’t mean that you shouldn’t aim to settle your credit card’s entire outstanding balance on a monthly basis.

  • Unfortunately, some credit card holders pay only the minimum amount due every month as they feel that it’s more convenient for them since it usually costs less than their credit card’s total amount due.
  • When you’re settling only your credit card’s minimum amount due, a huge portion of it goes to interest with the remaining small amount serving as your actual payment to be deducted from the outstanding balance.

You’ve been taking out loans from your retirement account.

Often considered to be a rainy-day fund, the balance of your retirement account shouldn’t have a single deduction in it since you’ll be using it for when you’re required by the law to retire from your job due to old age.

  • However, you might be tempted to take a small loan out of your retirement account if the entire balance of your bank account isn’t enough to repay your debts.
  • While using a retirement account loan to pay back the money that you borrowed from your creditor might seem like a brilliant idea at first, you would have to deal with the need to deposit money back into your retirement account every month as well, which only adds to your existing debt problem.

You’ve been receiving calls from a third-party agency that your creditor had hired to collect your debt.

If you still haven’t paid back the money that you owe your creditor several months after you borrowed from them, they would entrust the collection of your outstanding debt to a third-party agency who might not take to your situation as kindly.

  • A debt collection agent would gently remind you at first over the phone to settle your debts, but if you still bail out on it, they might start making increasingly urgent and sternly worded calls to break you into paying back the money that you owe your creditor.
  • Worse comes to worst, your creditor might file a lawsuit against you that would require your employer to withhold a certain portion of your wages and send it as repayment of your debt.

If you find yourself unable to manage your finances properly you may have begun to feel that you can’t repay your debts on time. This situation only leaves you with more debt that you’re unable to keep up with it, and you might have started swallowing your pride and looking into filing for bankruptcy. However, it would greatly benefit you if you can read the above-listed signs to watch out for if you’re heading into bankruptcy without even knowing it so that you can address and resolve them immediately. To help you decide more clearly on what to do when faced with insurmountable debt, you should talk to a lawyer who can assist you in mitigating the ill effects brought about by those signs that might be telling you to file for bankruptcy and what you would need to do in case bankruptcy is the only solution left for you to wipe your slate full of debt clean.

Veronica Ferguson is equipped with more than 20 years of experience as a businesswoman. She is currently writing her next big project and hopes her pieces would impart vital knowledge to her readers. Veronica is a family woman, and is often with her family during her free time.

Disclaimer: The information presented below is meant to serve as a guide on some of the key signs of bankruptcy that you may not know about, and shouldn’t be interpreted as legal advice. If you want to find out more about how you can file for bankruptcy, you would have to contact a licensed bankruptcy attorney who can guide you throughout the entire bankruptcy filing process.

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Budget-Friendly Tips On Maintaining Sustainable Fashion

As I was exploring the possibilities of becoming a Minimalist, I came across a YouTuber who declared her love for sustainable fashion. She was aiming to build a limited closet which included timeless pieces. She stressed on the importance of to re-wearing such items for the next 3 years or so.

Sustainable Fashion, also termed as Eco Fashion, is a part of the growing design philosophy that creates a system supporting social responsibility and environmental impact. When it comes to clothing, you can make sustainable choices too! Start with these tips:

#1: DITCH FAST FASHION BRANDS

Wouldn’t you jump for joy upon scoring an eleven-dollar blouse at Zara? I certainly did. There was an underlying reason behind its cheap price tag. Many fast fashion brands outsource their labor overseas. Furthermore, they use cheaper materials that can easily fall apart after multiple washes. Opt for fabrics that are made from eco-friendly materials such as silk, soy, hemp, organic cotton, and bamboo.

Image Credits: pixabay.com

Singapore’s abundant line-up of fast fashion brands include Zara, Topshop, H&M, Pull & Bear, Bershka, Forever 21, and Uniqlo. These brands persuade you to purchase a volume of trendy pieces due to its year-long sales. Try to invest on quality over quantity instead.

#2: CREATE A SHARED CLOSET

A surefire way to diminish the need to purchase a new clothing article is by borrowing one. Siblings, cousins, and friends often embrace the idea of sharing clothes with each other. You may even swap your clothes or give out your unworn items.

You can take advantage of a shared closet during rare occassions such as a themed wedding. You do not want to end up with a landfill of bridesmaid dresses like the protagonist from the movie 27 Dresses!

#3: SUPPORT LOCAL BUSINESSES

Significant change starts with your sustainable choices. Make it a habit to support local products. Not only are you helping our economy but, you are also helping reduce the carbon footprints created by vehicles. Use the same philosophy when you travel. Purchase from the local weavers, jewelry artists, and shoemakers.

Image Credits: facebook.com/pg/zhaiecocollection

Eco-friendly Singaporean brands include Zhai and Etrican. Zhai is Singapore’s first boutique that carries clothing made from bamboo fiber. Nestled in the hippie streets of Haji Lane, it is the ideal choice for sustainable fashionistas. The later, Etrican, claims to be the pioneer in eco-friendly clothing in Singapore. See for yourself!

Sources: 1 &2

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