Horrible Financial Habits To Drop This Year

As preconceived habits are harder to break, it takes patience and dedication to break these financial habits:

THE HABIT THAT I DO NOT TOLERATE

If someone asked me to identify a single financial habit that I am irked by the most, I will immediately answer “disorganization”. I appreciate when things are labeled and stacked in order. This is why I make it a habit to file my receipts, keep my cards in one place, and schedule my payments. Is it just me or does your mind work more efficiently in the sight of a clean desk?

Well, tidiness works to my advantage as it helps me to avoid unnecessary expenses. Money spent on interest charges, late fees, unused memberships, and unwanted subscriptions can pile up! Can you guess what binds these expenses together? Disorganization is the answer.

Place conscious effort towards creating a system that will keep your finances in order. Do not fall behind your billing statements, nor shall you let your important documents stack up.

THE HABIT THAT BLOCKS A GOOD DEAL

Say you are a habitué of Money Digest’s Facebook Page. You frequently stumble upon good deals in various categories. As a business owner, you are immensely attracted with the services of a supplier that offers inexpensive prices online. Do not cancel on your current supplier in a snap! Instead, call to negotiate. Carefully analyze the situation and make logical points about the competitors.

If your timing and approach is proper then, your current supplier may quickly match the competitor’s offer. Do not be afraid to negotiate!

THE HABIT THAT MANY POSSESS

Many Singaporeans do not keep track of their spending as they deem it to be time-consuming or unnecessary. However, making money management an habitual regimen is essential for every working adult.

You do not need to adapt an extravagant lifestyle or earn millions to start a financial plan. Simply keep track of your daily spending and examine it each month. Then, accurately plan to meet both your long-term and short-term financial goals.

THE HABIT THAT LIMITS YOU

There is a reason why entertainment websites such as 9GAG and Reddit flourish worldwide. These were especially created for people who have a habit of procrastination. These people push off tasks and decisions as they intend to accomplish it in “later” parts of the day. Have you caught this habit yourself? It is time to break the cycle as you welcome a new year!

Reach your fullest potentials by researching your options on insurance, savings, and investments. Befriend Father Time as he can bestow you the gift of compound interest.

THE HABIT THAT CAN BREAK ONE’S SMILE

Some religious leaders advocated against the idea that more money can bring happiness. Money can immediately bring joy, but only to an extent. Researchers in Princeton released a study in 2010 showing that happiness increases as the income increases until US$75,000. After this point, it plateaus.

Purchasing or owning more items can increase your happiness in the short run. In contrast, spending your money on others can generate more happiness than splurging for yourself. Consider holding a fund raiser or donating your old clothes. A little act of kindness can go a long way!

THE HABIT THAT HARRY POTTER CAN CONQUER

The J.K. Rowling’s fictional book series that blew the world by storm included the dark creatures called the “Dementors“. The lead character named Harry Potter had to vanquish these creatures, which feed upon human happiness. They suck the individuals’ souls out of their bodies. Rowling modeled these creatures to the immensely negative people in her life.

Image Credits: iKobe! via Flickr Creative Commons

Image Credits: iKobe! via Flickr Creative Commons

Are you a Dementor? Do you create a bubble of negativity above your head? Do you believe that you are constantly overworked and underpaid? Is it your habit to complain about your paycheck? Consider stopping the vicious cycle of negativity. Instead, solve your problems by employing strategies such as negotiating a pay raise or going on a well-deserved vacation.

This year, stop ranting and start doing!

Sources: 1, 2, & 3

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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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Newbie’s Guide To Singapore’s Credit Bureau

The Credit Bureau (Singapore) is a principal credit consumer agency, which has the most comprehensive industry uploads originating from all the major financial institutions and retail banks. Credit Bureau (CB) is a joint venture between the “Infocredit Holdings Pte Ltd.” and “The Association of Banks in Singapore”.

The Monetary Authority of Singapore’s (MAS) vision to improve the public’s risk management capabilities is in lined with the holistic embodiment of CB. How is this so?

The Banking Act allowed the members of CB (e.g., credit card companies) to reveal credit-related data for the strong purpose of analyzing the creditworthiness of existing and potential customers. Simply, CB presents a “complete risk profile” of a particular customer to a particular credit card provider.

This complete risk profile includes a tangible number called the Credit Score. The Credit Score is an independent assessment of an applicant, which guides the decisions of the lenders. It is gauges the likelihood of repayment as well as the probability of going into default. You must pay close attention to your Credit Score if you are planning to apply for any forms of loans or credit. For instance, you and your spouse need good Credit Score to successfully take up an educational loan for your children.

Image Credits: pixabay.com

Image Credits: pixabay.com

Say your Credit Score has been in its low point for the past 2 months. Wary not, my friend. You may still rejuvenate your credit history as the reports from the CB manifest your record on promptness over a 12-month period. You read that right! You have the ability to technically “undo” a poor credit history due to late payments and unmet minimum repayment sums. However, paying your monthly credit card bills and loan installments on time must be your top priority for the next 12 months. Doing so will only clean up a section of your credit report known as the “Account Status History”.

Hope fades when your problems go deeper than late repayments. Serious financial situations such as bankruptcy proceedings and debt management programs will remain reflective on your credit report. You have to be careful to secure a pleasant future!

Sources: 1, 2, & 3

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