MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

How To Spoil Your Wealth As A Singaporean Millennial

Prove how wrong the older generations are! Being relatively young does not necessarily equate to ignorance and carelessness. Exude financial readiness by avoiding these scenarios:

BY BEING TOO CONSERVATIVE

Millennials have a distinct currency that many people cannot afford to lose – time. The more time you have, the more powerful the compound interest is. The only problem is that many Millennials are too risk averse. Why is this so?

Well, they had experienced at least two financial crises in the course of their life. Recall the great recession of 2008. The downfall of the economy in United States contributed to the ripple effects that stressed the Singapore economy. It was the first East Asian country to succumb into recession.

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Despite these events, it is important to focus on your long-term plan before you retire. Consider investing in stocks and take advantage of it over time. Failing to invest may cause you to have an insufficient fund during your golden years.

BY COLLECTING PASSPORT STAMPS

It is no secret that many Singaporean Millennials are globetrotters. Collecting passport stamps is not a cheap hobby! This is why some of them take up part-time jobs in order to finance their passion for travelling.

The places to explore in our humble island may be limited, but there is no shortage of things to spend on. Some Millennials waste their money on the frequent trips to the themed restaurants or hippie cafes. While, others spend their paycheck on bargain hunting. Notice the flashy “sale” signs in Orchard Road. These are very tempting, if you ask me. It is only later that they realize the essence of cutting back.

BY FAILING TO PLAN FOR THE FUTURE

Knowing the facts on young Singaporeans and retirement may trigger anxiety. It is alarming how many people hold their retirement plans due to fulfilling short-term goals such as purchasing a nice car or creating a fantastic wedding. Not to mention, there are numerous reports that highlight how poor the retirement readiness of Singaporeans are. A 2016 survey showed that 1 in 3 working citizens were not planning for retirement at all!

Just because you are young does not mean that you can put off your plans for the future. Do not solely rely on your CPF account to cushion your foreseen expenses. Start your retirement fund as early as your first paycheck.

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The bottom line is to keep your finances simple by focusing on saving your excess money and earning more cash. Planning for a comfortable lifestyle is crucial too!

Sources: 1 & 2

Answering Five Awkward Questions About Money

How often do you have a chance encounter with a person who is innately savvy with money? Not so often, right?

Personal finance is not exactly a part of the school’s curriculum. This is why you must be open to discussing about proper money management. No matter how embarrassed you may feel, here are some questions that many Singaporeans are eager to know.

#1: HOW CAN I MAXIMIZE MY SAVINGS DESPITE LIVING FROM PAYCHECK TO PAYCHECK?

Tackling the overwhelming bills and loans can make you unenthusiastic about saving money. You see, it is difficult to save money if you are barely living from paycheck to paycheck. The solution could be found in the way you spend.

Notice how you allocate your monthly budget and look for ways to downsize your purchases. You may focus on entertainment costs such as limiting your restaurant dining. Strategically planning your spending habits will help you to increase your savings.

#2: WHICH FUND SHOULD YOU SET FIRST: RETIREMENT OR EMERGENCY?

Financial security places a heavy weight on both the emergency and the retirement fund. The former aims to protect you against unexpected events in the immediate future. While, the latter will cover your expenses in the golden years. Stop choosing between these two! Cultivate varying amounts in your emergency and retirement fund simultaneously.

Once you are done with setting up a sufficient emergency fund, you can start stretching out your contribution for your CPF OA.

#3: WHY WAS MY PLASTIC CARD DECLINED?

There is nothing worse than having a sales clerk or a waiter tell you that your credit or debit card has been declined. I can only imagine the horror on the client’s face as this happened to me before. Several years ago, I was working as an administrative officer at a fitness studio. A rising Hollywood celebrity came to pay but her credit cards got declined. She was furious at me and gave her debit card instead. Thankfully, the transaction was successful. I must highlight that she is using plastic cards from international institutions.

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Why did this happen to the rising starlet? Well, it may be due to the bank’s security measures. Purchases made far from your home may seem like red flags to your issuer. So, call your bank or issuer right away and authorize the transactions. Handle this situation better by keeping your cool. Talk to the personnel privately and arrange an alternative form of payment such as going to the nearest Automated Teller Machine (ATM) to withdraw cash.

#4: HOW DO I TELL MY PARTNER ABOUT MY OUTSTANDING DEBT?

Telling your partner or future spouse about your outstanding debt fuels anxiety, but you must simply do it. Schedule an open discussion with your beloved. Explain the gravity of the situation and the events that led up to it. Highlight what you learned from your past mistakes and show how you can conquer your debt.

Do not forget to include your partner in the planning process.

#5: WHEN SHALL I STOP ADDING INTO MY SAVINGS ACCOUNT?

As a conservative adult, you had exhausted all your contributions for your future. Congratulations on meeting your short-term financial goals too! Now, you may wonder if you are putting too much on your savings account.

Limiting yourself to a savings account makes you miss the opportunities of growing your wealth to its fullest potential. Consider opening an investment account once your emergency fund, retirement fund, and living expenses are in order. You may even schedule a consultation from a financial expert.

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It is rare to encounter a person who is innately financially savvy. So, serve as a good example to other Singaporeans by raising important money discussions.

Sources: 1 & 2

How Much Cash Should You Keep In The Bank?

You are a responsible adult living in the most expensive city in the world. With this in mind, how much money should you have in your savings account? This may sound like a basic financial query, but it is hard to extract a straight answer from it. Make things simple by aligning your goals with the volume of your savings.

Here are just some goals that you may tap with:

GOAL #1: BUILDING A SAFE NEST FOR THE GOLDEN YEARS

To shed a light to the path of many Singaporean retirees, a social security savings plan has been put into place. This savings plan is none other than the comprehensive Central Provident Fund (CPF). You can use your CPF Ordinary Savings account for important purposes such as purchasing an HDB flat or financing your retirement years.

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The amount of your retirement fund must be based on your estimated future spending or your predicted lifestyle. This is why it is challenging to quantify a singular retirement fund. It is best to save on a regular basis with the knowledge that all will add up as you age. For instance, many financial experts recommend to save at least “10% to 15% of your income for retirement as early as your 20s“.

GOAL #2: ESTABLISHING A REALISTIC EMERGENCY CUSHION

As the name suggests, an emergency fund is established to cushion unforeseen events. There are many ways to arrive at a specific amount for an emergency fund. First, you may follow the advice of the renowned Personal Finance Adviser Suze Orman. She suggests to have eight months’ worth of your salary because it is the average period before a person finds a job.

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Second, you may save up a five-figure emergency fund in an investment account with relatively safe allocations in order for it to grow. Doing so will allow you to save more money than by leaving your cash in a savings account.

Lastly, you may save up based on your living expenses. Add up the cost of all your current essentials (i.e., rent, grocery, and utilities) and work from there. For example, you need S$2,000 per month to survive. Prioritize getting about S$6,000 in your emergency fund.

GOAL #3: CONQUERING SHORT-TERM VICTORIES

In a list of financial priorities, chances are, your specific goals reside at the bottom. Specific goals include purchasing a car, backpacking around Europe, and buying a new phone. Do not limit your savings just to suit your specific goals.

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Remember that starting your savings is the initial step and that you must plan to raise it over time.

Sources: 1 & 2

Qatar Airways Summer Sale: Fly to Europe from SGD935

If you have not started planning for your summer holiday, Qatar Airways is having a summer sale where air tickets to Europe start only from SGD935, for travel up to 31 March 2018.

Here are 5 European cities we absolutely love and are perfect for visiting in the summer.

Barcelona, Spain

If there is one tourist attraction to visit in Barcelona, it is the La Sagrada Familia church. For over 130 years, the church remains under construction and is slated to be completed in 2026. Despite so, its façade is enough to attract millions of tourists from all around the world. Barcelona is also poised along the Mediterranean sea, making its beaches – such as the La Barceloneta beach – one of the most beautiful beaches in the world to bask in the summer heat.

Fly to Barcelona from SGD935.

Helsinki, Finland

While many visit Helsinki during the Christmas period as it is widely known as the “Christmas City”, Helsinki has so much more to offer than just snow and Christmas lights. In the summer months, temperatures are cool, yet warm enough for you to tour around the seaside city. Pay a visit to the Suomenlinna Fortress, a UNESCO World Heritage Site, and spend a tranquil day at a café or simply pack a picnic with your loved ones at one of their lush gardens.

Fly to Helsinki from SGD965.

Pisa, Italy

Needless to say, you should definitely drop by the iconic Leaning Tower of Pisa and take as many touristy shots of you trying to support the tower as you can. If time permits, take a train down to Cinque Terre and be wowed by the spectacular sights of the colourful houses built on a hill by the cerulean-blue sea. Hiking Cinque Terre can be done within the day between the different towns. Proper hiking shoes is advisable.

Fly to Pisa from SGD1,085.

Paris, France

Paris is a top tourist favourite due to what it has to offer in the fields of art, fashion, gastronomy and culture. With so many popular tourist spots such as the Eiffel Tower, the Louvre and Arc de Triomphe, be sure to pack comfortable shoes as your travel itinerary is guaranteed to be packed!

Fly to Paris from SGD1,150.

London, UK

Nothing spells London more accurately than the Big Ben and the London Eye. Harry Potter fans can also watch their childhood dreams come to live when they drop by the Warner Bros. Studio to check out the filming set, props and costumes used in the Harry Potter films. Also, be sure to reserve a full day and take a trip down to one of the Seven Wonders of the World, the Stonehenge.

Fly to London from SGD1,200.

All you have to do is visit qatarairways.com/sg and book your air tickets by 7 June 2017 for travel up to 31 March 2018.

Good news for all POSB and DBS cardmembers! Enjoy up to additional 15%* off to more than 40 cities in Europe when you book with your DBS/POSB debit and credit card via qatarairways.com/dbs by 15 June 2017.

Should You Spend Your Hard-Earned Money On Fitness Accessories?

At a young age, my parents instilled the importance of cultivating a healthy lifestyle. Our collective hobbies consist of cycling at East Coast Park and swimming in the nearby community pool. I do not mean to brag! You see, my mother works in the field of fitness. On the other hand, my father has prior experience in making workout programs for diverse body types.

My parents taught me that staying fit is not an easy task. This is why many Singaporeans seek motivation by hiring a professional trainer or by purchasing a fitness accessory. Fitness accessories include trackers, watches, bands, and so on. The goal of these accessories is to make your routine more exciting and more effective. During my exposure to these products, it made me wonder if investing one’s hard-earned money on fitness accessories is worth it.

To make a solid decision, you will have to consider various factors that interact in this situation. Start by determining what you need. When it comes to fitness accessories, a particular size does not fit all! Health-conscious individuals gravitate to either the smartphone apps and the wearable tech. Some wearable fitness accessories are created to capture the intricate details such as the heart rate, foot-ground contact time, and runner’s cadence. These details may not be accurately captured by a smartphone app alone. If you are placing more value on the functions then, you may consider purchasing a wearable tech.

Second, you must determine what you can realistically afford. A nice trick is to visualize the act of replacing your accessory every month or two. As you visualize this, think of an amount that you can easily work with if you are going through the constant replacement. Please do not spend more money than you can afford in a short-term basis.

Shelling out hundreds of dollars on wearable fitness accessories do not necessarily mean that you will get the best results. In a study published recently in the Journal of American Medical Association, researchers found that “smartphone apps could prove to be a more widely accessible and affordable way of tracking health behaviors”.

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I suggest that you test the waters first! Commit to a quality (yet free) smartphone app such as Moves, before you purchase an expensive activity tracker or a fitness band.

Sources: 1 & 2

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