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How to stay focused on your financial goals

We’re down to the final week of February. Do you already find yourself struggling to put away some money for the upcoming months ahead?

You’re not alone. It’s harder than most people think to stay focused on their financial goals, and we’re here to lend a hand in finding your way forward.

Stay on this page if you want to find out more on ways to stay focused on your financial goals amidst the prolonged pandemic.

Factor in your dreams for the future

Do you know that many people don’t plan for the future because they don’t take enough time to dream about their financial goals and what they can hold?

Pondering over what you want to achieve this year and beyond can help you stay on track to reach it. For instance, are you looking to buy a house? Or are you looking to pay off your loans in two years?

Figuring out what you want to achieve will assist you in crafting a game plan to get there.

Be realistic and take concrete steps

Image Credits: TLNT

Some of us come up with lofty dreams when planning for the future. Perhaps you’re trying to achieve your goals too quickly without considering the finances you have available. Or it could be that the dreams themselves aren’t that reachable based on your current financial status.

If your dreams aren’t attainable, you will find yourself sidetracking on your financial goals down the road. So, plan your next steps based on your available budget and be practical about what you can or cannot do.

For example, if you have plans to buy your first home in the future, these are some real questions to ask:

How much do I need to save?
How to set aside this big sum?
Do I need to create an emergency fund?
How to grow my pot of savings?
Should I maximise my CPF?
Can I maintain a healthy credit score?

Take concrete steps (no matter how small) if you want to stay focused on achieving your financial targets.

Tweak your plans if necessary

If there is anything that the COVID-19 situation has taught us, it’s that life throws us lemons sometimes unexpectedly. Always be ready to rethink your financial goals should more lemons be thrown your way.

Maybe you’re expecting an unplanned baby, which means there will be changes in money priorities in the years to come. You don’t have a lot of time to make adjustments because once the baby arrives after 40 weeks, there will be significant changes to your lifestyle.

With that said, your immediate focus should then be on how to survive the first year financially. Take it one step at a time, and you will eventually get there.

Keep your eye on the finishing line

Image Credits: scientificamerican.com

You’ve designed your financial future for a reason. When you forget what that reason is, it’s easy to get distracted and go off course. To stay focused on your financial goals, make sure you keep an eye on the finishing line. That’s what you’re working towards.

Several banks in Singapore like OCBC and DBS allow you to save a sum automatically each month. This automated savings will be a great tool to help you gather your money for that big purchase in the future.

Final thoughts

Your financial goals matter, and to keep that at the forefront of your mind, you will want to consider the tips mentioned in this article. Read this if you require more motivation to reach your saving targets!

6 Financial Resolutions For Every Singaporean

As I receive my annual bank statements and credit card summaries, I realize how my financial year went by. January is a fantastic time to review your financial strengths and weaknesses. Where did you fall short? Not only is it a good way to reflect on your spending habits, but it is also a good way to craft your financial goals.

Use your year-end resources to establish your financial resolutions for the year 2020!

1: IDENTIFY YOUR FINANCIAL GOALS

Several articles from Money Digest highlighted how helpful it is to determine your financial goals. Start your journey by identifying both your short-term and your long-term financial goals. Are you hoping to earn a degree or to expand your retirement fund? Do you see yourself purchasing a new flat with your spouse? Or, do you want a to lead a different career?

To illustrate your path in a detailed manner, you may create a Financial Vision Board. Take some time to think about how to achieve your financial goals this year. Consider your outlook before your plan of attack.

2: SAVE MORE MONEY

How many times have you heard about “saving more money” as a resolution? This is a common financial resolution for many Singaporeans. However, most people do not know how to start. It is recommended to be specific to increase the chances of success. Increase the percentage of your monthly income that goes into your savings.

Save at least 15% or your monthly income and increase the percentage whenever you feel more comfortable. If you are already saving 20% of your income then, you are in good place. A person who is earning S$4,000 per month can reap the benefits of having S$9,600 by the end of the year. Raising the percentage to 30% will equate to having S$14,400 by December 2020. Saving more money gets you closer to achieving your financial goals.

3: PAY OFF YOUR DEBTS IN FULL

Two years ago, MAS estimated that there are 9 million credit cards in circulation in Singapore, with Singaporeans charging an average of S$555 per card. Imagine how much these numbers have grown since? Credit card debt is rising in the country as convenience is hard to resist.

Many credit card holders enjoy the attractive benefits or the good rewards programs of several issuers. While there is nothing wrong with paying using cashless methods, you need to be responsible with paying the hefty interest rates and balances. Commit to paying the full amount of your monthly debts this 2020!

4: GROW YOUR INVESTMENTS

Aside from increasing your savings, you can make your money work for you by investing each month. There are many ways to invest your money such as putting it in high-interest savings account. This can increase your earnings by 2% per annum.

Another approach is to sign-up for investment-linked insurance policy where a portion of your premiums will be invested in specific investment funds. Review your insurance policies and ask your financial adviser about this option.

5: GO ON A CASH-ONLY DIET

You have endured the back-to-back expenses brought by the Holiday season. Chances are, your credit card got exhausted due to the year-end sales and other Christmastime delights you spent for your beloved ones.

Cushion these expenses by going on a “cash-only” diet for a few weeks or a couple of months. Begin by allocating a monthly budget based on the money you have. Give yourself a specific cash amount per week and work your way around it. Doing this will challenge your self-control and your resourcefulness.

6: AUTOMATE YOUR SAVINGS

Transform your new year enthusiasm into something productive by automating your savings. Commit to this new habit by researching on the available services of the local bank institutions. For instance, I recently came across with the UOB Stash Account.

UOB Stash Account allows you to accumulate your savings for up up to 1% p.a. interest, simply by maintaining or increasing your previous month’s Monthly Average Balance. An initial deposit of S$1,000 is needed to open the account, which is open for all. You can apply for your Stash Account and get an approval within minutes by simply going to the website. Terms and conditions apply.

Sources: 1 & 2

Small Financial Steps To Complete This 2019

As the new year chimes in, there will come a chance to set new resolutions or goals.

The other day, my sister and I were casually chatting about her 2019 resolutions. She reiterated how important skincare is. She seeks to apply sunblock and lotion on a daily basis. Her skincare resolutions were concrete and doable. So, I asked her why she kept her goals simple. She looked at me and said…”If I cannot follow through these simple goals, how can I complete the bigger ones? I have to start with smaller chunks.” She made a valid point.

The best way to achieve your desired outcomes is to start small. This statement applies to your financial life. On that note, here are some “small” financial steps that you may consider this 2019.

Image Credits: pixabay.com

#1: READ AT LEAST THREE FINANCIAL BOOKS

Without a shadow of doubt, knowledge is power. Research and further study on the different techniques to manage and grow your wealth will help you develop essential financial skills.

Aside from visiting educational websites such as Money Digest, you may find quality information in the nearest public library. Books are gateways to a new world. Who knows? The financial book you just pick up at the bookstore may just lead to the completion of your financial goal.

#2: ESTABLISH A WELL-STOCKED EMERGENCY FUND

Time and time again, I shared how important it is to build a sufficient emergency fund. Having an emergency fund or a financial reserve is usually perceived as a short-term financial goal. However, its personal benefits last long!

For starters, it diminishes your money worries as you will have a cushion to support your tight budget. Secondly, it can cover sudden events such as job loss or medical expense. Lastly, it exercises your ability to save money.

#3: CUT DOWN YOUR UTILITY COSTS

Utilities are essential to one’s daily life. Just because you have to spend money on utilities does not mean that you have to be lax on it. Continue to look for ways to save on electricity and phone bills. Also, you must apply money-saving techniques to cut down a basic need – water!

For instance, you may eliminate your cable bundle by subscribing to mobile streaming services (e.g., Netflix or Toggle Singapore) instead. Or, you may simply turn off the switches when not in use.

Be frugal! You will save hundreds of dollars a year by cutting costs on these mandatory expenses.

#4: HAVE SUFFICIENT INSURANCE

2018 was the year that I actively to built my insurance umbrella. I wish to continue to drive to this path in 2019. When it comes to insurance, many people either pay too much for their coverage or pay too little to cover what they need. Striking a balance between these two is a good financial goal.

A significant aspect of this goal is to find a credible and competent insurance agent, who understands your situation best.

#5: EXPAND YOUR REPERTOIRE

I was fortunate enough to have ridden a cab with a man full of wisdom. The driver was a retired Engineer who worked in Singapore and United States. In the span of his career, he observed how most of his co-workers preferred to stay in a box. They kept their first jobs due to level of comfort and security it entails.

Many of us choose to stay in our comfort zones. However, growth comes from shaking things up! If you choose to stay the same, nothing will happen. You need to embrace change.

Complacency breeds mediocrity. Open new doors in your life by learning a new skill. Let’s take my uncle as an example. To negotiate a higher salary, he furthered his skills by attending seminars and trainings. You may also further your educational background. Start small by learning a new skill from an online course.

Image Credits: pixabay.com

Fully improving yourself is often time consuming. A lot of hard work and money goes into it. But, improvements will help you take on bigger challenges and responsibilities in the future!

Sources: 1 & 2

Celebrate These “Small” Financial Achievements

Do not underestimate the strength of your “small” wins. These are pivotal to tracking incremental achievements and working towards larger goals. You see, most financial goals (e.g., purchasing a flat or saving for retirement) can take a long time to achieve. It can be too intimidating!

Breaking your goals into finer pieces can help you visualize your financial path. What’s more? It can motivate you to work harder.

#1: MOVING INTO YOUR FIRST FLAT

Living alone can be challenging in the first few months. However, nothing replaces the feeling of independence that comes from cultivating your own place. You are free to march to the beat of your own drum – within the bounds of the building management or the landlord. Sometimes, it can get lonely to live by yourself. Your bravery to take the plunge is an accomplishment on its own.

#2: PAYING OFF YOUR DEBTS EVERY MONTH

Along with growing your wealth, you must diminish your mountain of debts. Start spending and saving wisely to cover your monthly balance per month. Are you capable of paying it fully? If so, then consider doing it. Nonetheless, contributing a significant amount to your debts will enable you to maximize your retirement contributions.

Image Credits: pixabay.com

Think about that!

#3: GETTING A PAY RAISE

Words cannot encapsulate the wonderful feeling of being recognized and paid for one’s hard work. We are quick to press the “Like” or “Heart” button on Facebook whenever someone announces his or her promotion. It is a celebration indeed! But, remember that you do not have to wait for your coveted moment to begin celebrating. Every pay raise counts! Pour yourself a well-deserved drink and bask in the glory of your accomplishment for a night.

#4: INVESTING IN YOURSELF

Whether you are advancing your degree or continuing your certification in the field, you will more likely to increase your earning potential by receiving further education and training. Not to mention, you will widen your network and knowledge in the process.

Image Credits: pixabay.com

Increasing your professional value by investing in yourself can ignite your ability to achieve long-term independence. Hence, I encourage you to set some money and time this cause.

Sources: 1, 2, & 3

Benefits of Having A Financial Planner

Financial planning goes beyond the calculated investments. Building a financial plan helps you visualize the “big picture” and set financial goals (i.e., both long-term and short-term). This is a crucial step in mapping out your financial future. And, a financial planner or financial advisor may just help you with that!

Image Credits:pixabay.com

BENEFIT #1: ENUMERATING ONE’S FINANCIAL GOALS

The first step that financial planners partake in is the identification of the client’s financial goals. For couples, this activity is enough to get the two individuals on the same page. It highlights their similarities and differences. The funny thing is that many Singaporeans spend more time planning their travels than planning for their financial goals (e.g., retirement fund).

BENEFIT #2: DETERMINING WHETHER YOUR GOALS ARE SMART

After listing down your financial goals, the financial planner visualizes how you can get there. How much do you need to save S$10,000 a year? Should you invest your income in mutual funds? A cost-benefit analysis will be done. This act will put each of your goals in a microscope to see whether they are SMART! SMART stands for Specific, Measurable, Attainable, Realistic, and Time-bound. The financial planner must ensure that both your goals and your timeline are attainable.

BENEFIT #3: HAVING PEACE OF MIND

Certified financial planners have years of education, training, and experience working with different clients of diverse situations. Their broad professional background aids in assessing your needs. They are qualified to give you advice that reflects the best practices of the financial industry. Simply put, having a financial planner gives a sense of peace when it comes to knowing that you have an in-depth financial strategy in place.

BENEFIT #4: HIGHLIGHTING THE MONEY MISTAKES YOU MAKE

Analyzing your holistic financial picture exposes the mistakes that you are currently making.

Image Credits: pixabay.com

For instance, you disregard some of your credit card debts. This leads to paying a significant amount of money for penalty fees. Said mistake will be highlighted to ensure that you can apply an efficient fix.

Sources: 1 & 2

Factor in your dreams for the future

Be realistic and take concrete steps

Tweak your plans if necessary

Keep your eye on the finishing line

Final thoughts

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