MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

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

Why You Should Not Keep Your Entire Wealth At Home

Not every Singaporean believes in the prowess of financial institutions. There are some people who prefer to hide their wealth in a personal safety deposit. If you are one of these people, take time to introspect.

What is the real reason why you keep bundles of cash at home? Do you foresee a need in the near future? Lacking immediate reasons why you need the money highlights that stashing your cash at home is not necessary. Do not get me wrong! It is alright to spare a decent amount of cash for emergency purposes. However, it is not advisable to store your entire savings at home.

I shall share my own experience to put things into perspective. I started to build my savings in my late teens. As a newcomer in the workplace, I was completely transparent with how I manage my money. Oh! How I wish that I was not. Unbeknownst to me, my boss was a member of a financial “support group”. Those type of groups exist in Singapore. Some of these groups even advocate different methods of expanding one’s income. It was natural for my boss to question my ways. He pointed out how keeping my savings at home will not allow my wealth to grow. At that point, I did not absorb what he meant. So, I did my resarch. I eventually understood the importance of compound interest. I opened my own savings account at a local bank.

The interest rates offered by banks may not seem a lot, but every bit counts! The slightest percentage you would earn in a standard savings account is much better than what the 0% interest that you will receive at home.

The second factor focuses on the “safety” aspect. The mere presence of tangible cash makes you vulnerable to uncontrolled circumstances such as fire, pest infestation, and theft. Despite the relatively low crime rates in the country, you cannot deny the possibility of getting robbed. The temptation can be irresistible for your teen who wants to party on a Friday night or your toddler who wants to create a beautiful artwork. This is why you must place your wealth in clever hiding spots (look through this list). Simply remember where you put it!

The third factor involves accidents. You might actually throw or leave your cash behind. It is easy to neglect where you hid your fund if you are really good at it. What is worse? Someone else may find it and get rid of it. In 2009, a woman in Tel Aviv (Israel) gave up her old mattress. The only problem was that she placed a million of her savings inside the old mattress.

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The moral of this story is to consider safer alternatives than keeping your wealth at home. For instance, you can pay with your credit card when the rainy day comes.

Sources: 1 & 2

Extend Your Computer’s Longevity To Save More

I can vividly recall when my MacBook’s motherboard crashed. It was just like yesterday. I have to admit that it was entirely my fault as I spilled a decent amount of hot beverage on it. The situation is bad as the motherboard holds many crucial components together such as the CPU and the memory.

To my horror, the damage took me back by S$500. This amount is almost half the price of a brand new iPhone 7. It was too much! This faux pas was a buzzing reality check for me. I needed to take care of my devices for many years to come.

Keeping your laptop or computer working is vital for your sanity, productivity, and budget. So, consider these tips:

BLOCK THE NASTY BUGS

Upon opening the fresh boxes of your laptop or computer, one of your top priorities is to install an anti-virus application. An adequately protected device will prevent the corruption of personal data and other important files. Furthermore, it will give you a smooth functioning operating system. Worry not about shelling tons of cash as you can download free applications such as Avast and AVG 2017.

DECLUTTER YOUR SPACE

Aside from the viruses and malware attacks, too much clutter can slow down the operation system. A quick way to clean your space is to transfer your bulky files into an external hard-drive or hard disk. A 1 TB portable disk can cost you about S$80 at Lazada Singapore and S$89 at Courts Singapore.

The more space you have, the better your device will run.

CLEANSE YOUR KEYS

A filthy keyboard is not only a health hazard, but it can also damage your keyboard completely. Make it a habit to sanitize your keyboard and track pad.

Cleanse your keys by turning it upside down to release any loose materials. Then, blow into it to remove any debris between the keys. The last step is to dip a cotton swab into rubbing alcohol and wipe your keys and track pad gently.

STRENGTHEN THE BATTERY

The battery is an essential part of any device. Take care of your computer or laptop’s battery by draining it at least once a month. Afterwards, you must allow it to have a full cycle before you use it again. For laptop users, unplug it and rely on the “stored battery life” to keep it working.

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The act of draining and recharging helps to maximize its performance. When battery replacement is necessary, look for lithium ion (Li-Ion) batteries as they have the greatest longevity.

Sources: 1 & 2

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