Do you seek to attain financial independence? Well, you may consider taking “frugality” at heart. Frugality is the quality of being thrifty, prudent, or economical in the consumption of consumable resources (e.g., food). This quality is embodies while avoiding waste and extravagance.
For people who are mystified by this term, keep reading along.
MYTH #1: FRUGAL PEOPLE HAVE NO CHOICE
For a fortunate number of people, frugality is a choice. They see frugality as a method to create a strong link between time, labor, and money. Every purchase represents the time and effort they have spent working. It is a conscious decision to plan ahead for their short-term and long-term financial goals.
MYTH #2: FRUGAL PEOPLE ARE CHEAP
On the surface, people may assume that frugality and cheapness are one and the same. Similarities may be present, but these two are entirely different characteristics. A frugal person sees the best value for his or her money. While, a cheap person focuses on the lowest price.
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Say that you are grocery shopping for the entire family. A frugal person will use accumulated coupons and purchase items that are only on his or her shopping list. On the other hand, a cheap person will highly decline to spend more than S$50 on a week’s groceries.
MYTH #3: FRUGAL PEOPLE NEVER SPLURGE
Even frugal Millennials splurge from time to time! When you are able to skip on things that are not essential to your lifestyle, you will be able to free up more money for the things that are important to you. It’s a no brainer! For instance, I spend most of my money on quality food and cosmetics.
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Frugality is not all about self-sacrifice. If you are skilled in long-term savings, you may choose to spend the excess on something that you deem to be priceless. Personally, catching a sunset in Santorini sounds like a great idea to me!
Maintaining a healthy relationship with your significant other entails stabilizing the disposition of your finances.
Read thru this article to know how bad monetary habits can potentially harm your relationship. Furthermore, you will get an idea on how to conquer these habits.
#1: AVOIDING FINANCIAL CONVERSATIONS
A healthy long-term relationship is built on trust and transparency. As things get serious with your partner and marriage becomes a viable option, consider discussing about finances. You need to resolve your potential spouse’s money problems before it is too late.
Fully disclosing about your financial circumstance to your partner can be uncomfortable at first but, you have to at least try. Tell your partner about your outstanding debts, financial obligations, income sources, and other assets. This will make you empathize with each other more. From time to time, do not forget to check if your goals are in lined with each other.
#2: STICKING TO YOUR OUTDATED BUDGET
Improve your financial state this 2017 by establishing a robust budget. The budget that you created when you were single may be efficient, but you are now budgeting for two. Being in a committed relationship means that you have to take on more expenses with more resources. Begin by studying each other’s spending habits. Then, trim down unnecessary expenses after compromising. You may also adapt the budgeting techniques of your partner.
I, for one, allocate a small portion of my income to date nights. Let us face it! We belong in a generation where it is acceptable for women to split the tabs with their dates. Give this new perspective a chance as a loving relationship is a two-way street.
#3: LOANING YOUR VACATIONS
I know how much travelling can ease the stress of a hard working Singaporean. However, consistently deducting your romantic vacations on your credit card can take a toll on your wealth. Spending money that you do not have is a dangerous habit to possess. Imagine the arguments that boil down due to the frustration of not being able to meet up with the outstanding debts. This is why you must cultivate a travel fund in advance.
#4: SKIPPING THE BUDGET FOR GIFTS
According to the internationally-acclaimed book by Gary Chapman, there are five ways to express your love to your partner. These five ways include gift giving, quality time, words of affirmation, physical touch, and acts of service. Understanding your partner’s love language will help you to strengthen your bond.
I am only going to focus on one love language – the gift giving. For people who place importance on the tangible symbols of affection, it is important to remember your special dates. You are bound to celebrate various occasions together such as anniversaries and birthdays. Not to mention, Valentine’s Day is coming up soon. Is your wallet ready?
It is a good idea to allocate a budget for gifts before buying one. Otherwise, you have to face budget trimming and other financial woes.
#5: KEEPING A MONETARY SECRET
Secrecy is rarely beneficial to a relationship. Research showed that 1 in 10 people considered breaking up with their partners upon the discovery of a financial secret. Millennial participants were even less forgiving as reaped a figure of 1 in 5. These numbers convey how secrets can strain a “loving” relationship.
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The impact of keeping a monetary secret depends on the couple’s income, the item purchased, and the frequency of purchases. Another significant monetary secret is having a stash for escaping the relationship. Having undisclosed assets and secret bank accounts can affect the level of trust given by your partner. The primary source of damage is not money on its own, but it is the unpleasant habit of concealing the truth.
Quantify your progress by calculating the percentage of living expenses that your passive income covers. When you reach 100% then, you attained Financial Independence by this definition. Having a full-time job is certainly optional with this circumstance!
2. BY WORRYING LESS
For many people, Financial Independence is achieved once they can use their money to banish their stress. These people focus more on what they can accomplish – in the terms of minimizing the “gap”. The gap that I am referring to is the division that exists between your income and your spending.
By this definition, you can increase the gap and reach Financial Independence quicker by spending less and earning more.
There are numerous ways to minimize your debts and build a better relationship with money, learn some of them by checking out our helpful posts, here.
4. BY DOING WHAT YOU WANT
A refreshing definition of Financial Independence is shared by Investopedia. Its contributor believes that Financial Independence “should mean the ability to live more or less as one wants to, within reasonable limits.”
Financial Independence can be seen as being able to do and choose the path that you desire the most. Absolute autonomy mean not always be synonymous early retirement as it can refer to your power to quit a horrible job.
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In my opinion, this is the most achievable definition among the four.
Whether you are a concerned parent who needs to send money to your Singaporean child abroad or an honorable foreign worker who needs to send money back home, you must employ some strategies to remit.
The act of sending funds is called remittance. Remittance service involves the transfer of money to an individual that is a resident of another country or an individual that is temporarily staying outside of Singapore. To remit funds effectively, you must choose an appropriate type of service, determine the total cost, and confirm all the details.
SWIM THROUGH A SEA OF OPTIONS
The advancement in technology increased the options for global money transfers. To regulate this, the Monetary Authority of Singapore issues license to qualified remittance services in Singapore. You shall not engage and support the services of unlicensed people.
MoneySense advises the public to remit funds by approaching a licensed remittance agent or an established bank. Nonetheless, here are the common options to remit:
a. Cash to Cash
If your recipient does not have a bank account overseas, an ideal option is the cash-to-cash basis. In this service that is operated by Western Union and SingPost, you walk-in with the cash and let the company deliver it to the recipient of a particular destination. Since your funds will be converted to the country of choice, the service fee and exchange rates can vary.
b. Telegraphic Transfer (thru Banks)
Bank wire transfers move funds from one account to another – no matter where the other bank account is. Although this is usually the weapon of choice, it can be the most costly due to the high service fees and exchange rates. For instance, DBS Overseas Telegraphic Transfer charges about S$20. Payments made through this service usually arrive within 1-4 working days.
Please take note that some banks offer services that will let you remit online or through their Smartphone App.
c. Online Services
The most convenient option of them all is thru online money transfer services such as the renowned PayPal. Paypal enables you to send and accept moneys online without revealing all your financial information. In fact, you can send money to almost anyone with an email address or a handphone number.
What is nice about PayPal transfer is that there is no minimum amount and it charges as low as 0.5%.
FIGURE OUT THE TOTAL COST
The total cost to send money is determined by the fees charged by the service provider, the daily exchange rates, and the total funds that you need to transfer. These factors can vary and fluctuate frequently. Thus, you must collect and compare these information as soon as possible.
VERIFY ALL THE TRANSACTION DETAILS
Once you determined the most economical and convenient option, you must confirm that the provider will be able to promptly deliver your money to your desired recipient. Furthermore, you must verify all the information and get everything in writing. Keep all the receipts, emails, and documents in case something goes wrong.
Just as much as money crumbles relationships apart, it can also bring two people together.
As you settle down to the married life, here are some of the financial benefits matrimony can bring:
1. CHEAPER HOME EXPENSES
It takes no doctorate degree to realize that it is cheaper for two people to live together than to live apart. When living together, you are consolidating a singular mortgage or rent expenses. Not to mention, married couples enjoy the advantage of sharing the responsibility for the utility bills. Thus this arrangement can save you hundreds of dollars each month.
2. DOWNSIZED FURNITURE AND APPLIANCES
When married couples move in together, they get to keep some of their old furniture and appliances as they only need a set. Having one set of furniture and one set of appliances will reduce your maintenance costs.
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To make more money, you can sell your unused or underused furniture and appliances that are still in good condition.
3. INCREASED FINANCIAL STABILITY
It is easier to cope with the financial woes if you are married. For instance, if you get fired from your job but your spouse is still working, your partner’s income can support your family for the meantime.
4. PROTECTION OF THE ESTATE/S
If you are married, you can protect your partner’s properties and other assets once he or she dies. First, you must get the Will and contact the executors to ensure the smooth distribution of the estate/s to you and other family members. Then, you need to formally transfer the assets as well as the investments to your name.
5. IMPROVED RESOURCES TO PAY OFF DEBT
It is often challenging to pay debt with one income. By combining your income and your spouse’s, you get to expand your resources and increase your savings. Budget your combined income to pay off your credit card debts and other loans.
6. BETTER FINANCIAL ADVICE
In respect to your marriage, your spouse is supposed to know about your spending patterns and your cash flow. Aside from the financial expert, who can you turn to for reasonable and empathic financial advice other than your spouse?
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So when making important money decisions, it is best to reach an agreement with your partner first.
