MoneyDigest - Personal Finance, Lifestyle, Money Saving Tips

How To Conquer A Mountain Of Debts

Hiking up successfully to a mountain of debts is a difficult task to anyone but, it is doable. All you need to get started is the application of money management skills.

The first step is to take a hard look at your cash flow. It is important to track where your money is going through observing the previous months’ bank statements and receipts. If an expense category is not necessary then, reduce or eliminate it from your budget. This includes magazine or newspaper subscriptions, cable television bundles, postpaid plans, gym memberships, and so on. Doing so will force you to come out of your comfort zone and live by your needs.

Instead of frequenting the gym, you can visit the nearby parks freely to have a recharging jog. You may also view the publications and reading materials available at the library at no cost. Read more books about personal finance to supplement your journey.

Now, we move on to a type of debt that most Singaporeans fall for – the credit card debt. There were more than 101,000 delinquent debtors in 2015 alone. Not to mention, the largest accumulation of debt last year was a whopping $1,552,000!

Its pervasive nature gave rise to the importance of controlling our credit card habits. Begin by collating all your credit card statements. List down your current balances and corresponding interest rates. Put these in order by starting with the greatest interest rate and down with the least interest rate. Pay of the debts with the highest interest rates first as it will be the most beneficial move in the long run.

Create a realistic budget that incorporates what you discovered about your cash flow and your debts. Stick with this budget! When all these are said and done, it is important to maintain healthy financial habits. Keep yourself motivated by setting financial goals. Sharing your progress to the significant people in your life can encourage you even more. You may also make an illustrated board (e.g., filled with pictures of your dream house or vacation) to visualize your goals.

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The road ahead may seem impossible at the moment. So, you better hang in there!

Frugal Mums’ Guide To Saving Money In Singapore

Here are five ways to save money as the head of the household:

SHOP ONLINE FOR SCHOOL SUPPLIES

There are many retailers that offer promotions and clearance sales on their own websites. You will not save money on the supplies but you will also save a lot on gas or transportation costs. If you have the time, purchase online.

Lion Stationery and Evergreen are the two local stationery websites you can visit.

LEAVE YOUR KIDS AT HOME

If you have the option to leave your children behind with a family member or a babysitter then, do so. Children play a huge role on what goes inside your basket. This is why marketers and store strategists put their items on a child’s eye-level.

You do not have to give in to what your playful kids wants if you go to the store alone. This will help you to save a lot more money!

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MAKE A LIST AND STICK TO IT

Say you have no choice but to bring your precious little ones along. Turn grocery shopping into a fun task by making a game out of it. Start by planning your menu throughout the week. Then, list down the ingredients and other products you need to purchase. Save more money by opting for the generic or store brands.

Have your children find each item on the list (much like a treasure hunt). The person who finds the most items at the end of the shopping trip will win a prize. It is up to you to choose which prize will entice your children.

SAVE ON KIDDIE PARTIES

You are not forced to send invites to everyone in your kid’s entire class. If your budget does not allow you to invite your kid’s entire class, employ the “age plus one rule”. For example, you are planning to throw a party for your 6-year-old son then, invite 7 guests. Keep the numbers down by making it clear that the guests’ siblings are not invited.

Aside from that, you can forgo printing services by sending out electronic invitations through Facebook or email. This gets the job done – fast.

STOCK UP DURING GSS

An easy way to save money in Singapore is to take advantage of the “Great Singapore Sale”. This event which happens once a year includes numerous retailers from all over the nation. Bargain hunters like you can get good deals on baby clothing, child’s school supplies, toddler’s toys, and so much more. Stock up on these items to cover your annual needs but, do not go beyond your budget!

You may also buy several gifts to be prepared for the upcoming festivities (e.g., Christmas or Chinese New Year).

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Do’s And Don’ts When Loaning Your Money To Family And Friends

Family gatherings and friendly reunions can be less awkward if you follow these tips:

DO FIGURE OUT THE WEIGHT OF REPAYMENTS

A friend or a family member asked for financial help from you instead of loaning from a credible financial institution. Before anything else, you must ask yourself about how important it is for a person to repay you. Are prompt payments necessary or will intermittent payments work?

Keep in mind that if an individual approaches you, it is typically due to weaker credit history. This means that there is a risk of not receiving the repayment. You must figure out the weight of repayments earlier on before emotions get in the way.

DO NOT EXPECT FOR ANYTHING IN RETURN

When you do good deeds for others, it best to not expect anything in return. There is nothing wrong with earning the cash you previously had. However, you may feel disappointment if you are expecting more than what you have agreed upon.

Reciprocity is not a part of everybody’s values. This is why it is unfair to place personal expectations on unsuspecting family members or friends. This statement does not only apply to loans.

DO GET EVERYTHING IN WRITING

If you are releasing a relatively large sum of money or if you are strict on full repayment then, you must get everything in writing. Make an agreement that states the terms of the loan. This agreement is called a promissory note. Have the promissory note signed by both parties and and a lawyer (if possible). This will ensure that pursuit of legal actions when necessary.

You may also document the entire process before handing over the money.

DO NOT BE TERRIFIED TO SAY “NO!”

Your hard-earned money belongs to you and you are in charge of it. If you do not feel comfortable in lending money to a friend or a family member then, be assertive. Genuinely say that you cannot loan the money at the moment due to your financial responsibilities. Discuss the matter in a mature manner.

People who care about you will understand. If they take it against you, you may be better off without them.

DO OFFER GENTLE REMINDERS

All was said and done. To approach the situation in a warmer light in respect to your relationship with the borrow, offer gentle reminders instead of asking direct questions. You are not in the business of interrogating or threatening people about repayment. Instead, you want to cultivate an smoother discussion.

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Sources: 1, 2, & 3

6 Money Mistakes That You Probably Make

As human beings that dwell on habits, our personal finance patterns have a huge impact on our monetary well being. Many people are trapped into the same faulty habits that lead to common money mistakes. Recognizing these mistakes is a vital step to improving your financial health!

MISTAKE #1: NOT SAVING FOR EMERGENCY FUNDS

Unforeseen events happen from time to time. Some are pleasant (i.e., birthday surprise) while others are distressing (i.e., sudden layoff). Once an emergency strikes, it have serious repercussions to your finances. Not saving enough money for emergencies such as fire or burglary can mean instant bankruptcy for your or your family.

So, it is recommended to set aside a portion of your earnings each month to an emergency fund. Discuss with a financial professional about the advantages of compound interest and about ask for a feasible money strategy that fits your goals.

MISTAKE #2: LIMITING YOUR INVESTMENT PORTFOLIO

A large number of Singaporeans believe that property is an investment. There is nothing wrong about that. However, you are displaying poor portfolio diversification if you limit yourself to properties alone. Not only that! If you can only afford to purchase a single property, you will be forced to be homeless soon after.

This scenario highlights the importance of combining different investment options in order to safeguard your retirement.

MISTAKE #3: NOT NEGOTIATING YOUR SALARY

When I was a fresh talent in the “working scene”, I constantly cut my worth short. I believed that my experience was so insufficient. However, my relatively negative mindset was demeaning my knowledge and skills. This is why it is important to evaluate your skills, education, and experiences.

Find out the average salary per year through PayScale. It provides salary information for a particular position from its global online database. For example, the average pay for a Sales Representative at Pharmaceuticals is S$47,566/year. Negotiate salary based on your substantial research. You can do it!

MISTAKE #4: TERMINATING YOUR CARDS PREMATURELY

Whether you are closing out your cards because they are underused or because you had finally paid off your entire balance, this act may not be the best move for your credit score. The utilization rate and he average age of your credit accounts are two important elements of your credit score. The goal is to have a long credit history and a low utilization rate. Both of these elements are affected if you closed out your cards.

A better option is to store your credit cards in a safe place and make a purchase every once in a while to demonstrate that you are a good steward of your card. Immediately pay off the balance too.

MISTAKE #5: NOT HAVING ENOUGH MONEY FOR YOUR START-UP

Having scarce funding because of underestimating the start-up expenses can lead you to using your own savings just to meet the company’s monetary needs. You can either use your retirement savings or borrow money from friends and family. Furthermore, you will not be able to optimize your product to its full potential. This is not a good disposition to have!

A usual start-up goes through several rounds of funding. It is necessary to analyze all the areas of your budding business and each type of funding opportunities in order to begin the operations on the right foot.

MISTAKE #6: EATING OUT EXCESSIVELY

It is no secret that Singaporeans love to munch! We are blessed with a myriad of cuisines that one cannot resist the temptation of eating out. As with everything that is good, too much can be a sin too.

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You may feel that eating out during lunch or dinner daily does not make a difference. But, all your costs add up. The cost of one restaurant meal may be equivalent to three home-cooked meals. Consider packing lunch from home as it is cheaper, most of the time.

Are You Ready To Stake Your Claim On A Property?

How many times have you heard the statement: “housing is one of the biggest investments that one can make”? It is true!

Whether you want to become a successful property investor or a proud flat owner, you must use a logical and a practical buying system to make good decisions. For starters, it is ideal to choose a unit that has attractive features, wide appeal, and low maintenance.

There are many factors that can pinpoint whether you are ready to stake your claim. Here are some of them:

1. YOU CLARIFIED YOUR PURPOSES.

In the business perspective, the needs assessment is one of the first steps to building a strategy. Do the same thing when you are hunting for a new pad! Know your needs, intentions and purposes in order to guide your decisions.

Do you desire to move right away, to rent it out, or to sell it in the future? You do not want to dive in the market unprepared as everything may sound good to you at first sight.

2. YOU DID YOUR RESEARCH.

You know you are in the process of getting all the aspects settled when you have done substantial research. Use both the Internet and a pool of professionals (i.e., reliable real estate agent or lawyer) as your resource. Compare essential factors such as unit layouts, transport systems, unit locations, and building amenities.

It is ideal to move to a flat that has easy access to the shops, schools, and public transportation. And if you are renting a property, find a layout that can attract diverse groups of individuals, couples, and families.

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3. YOU DETERMINED YOUR FINANCIAL SITUATION.

It is crucial to know where you stand financially before purchasing a property. Who wants to be stuck in a mountain of debts, anyway?

This is why you must know how much you can realistically afford, how much you are willing to loan, and how much you can shell out immediately. Research about the various payment schemes that are available in the country. Do not forget to prepare a fund for additional (mandatory) costs too!

4. YOU KNOW WHICH TYPE OF PROPERTY YOU DESIRE.

Much like the abundant number of gyms in the Pokémon universe, there are numerous real estate options which one can choose from. You must equip yourself with the knowledge of knowing the differences between these options. Let me define three types, namely: Build-To-Order (BTO), Design, Build, and Sell Scheme (DBSS), and Executive Condominiums (EC).

a. BTO allows locals to apply for flats at a location of their choice. The construction work begins once about 65% of the flats are booked.

b. DBSS is a public housing scheme under the HDB (Housing and Development Board) system, which is curated by private developers. It can be found in Ang Mo Kio, Bishan, and Tampines.

c. ECs are sold by private developers and have the facilities that are comparable to that of the private condominiums.

5. YOU SAVED ENOUGH MONEY FOR THE HIDDEN COSTS.

Aside from allocating money for the total price-tag of the property, you know you are ready when you saved a great deal of money for the hidden costs. I am talking about the late payment fee and its similar expenses. As an example, developers may charge you for insurance and maintenance costs. Be prepared!

Image Credits: wikihow.com/Buy-Property-in-Singapore

There are more factors that can affect your buying decision. However, may aforementioned factors give you a head start in figuring out your dream property!

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