personal finance Archives | Page 24 of 40

3 Things That Uni Students Should Not Spend Their Allowance On

Many university students have the discipline to save their allowance, but this does not mean that they are spending their money on the “right” things.

#1: FANCY DESIGNER GOODS

While I was completing my tertiary education, I noticed how some people flaunted their LOUIS VUITTON or MCM Worldwide bags. I wondered how there were able to afford such a splurge as mere students. With limited financial capacity, it is not practical to collect luxury items. Invest on a quality backpack instead.

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Not to mention, it is seldom that somebody cares about what you are wearing.

A friend of mine rarely showers before going to school. She rationalized her actions as a typical behavior from the norm. Everybody was doing it so, why cannot she? The point was that majority of students would not care about how you present yourself. You are not there to treat the school as your catwalk! Your top priority is to learn after all.

#2: FLASHY ROOM DECOR

As a young adult, you have the privilege to decorate your own room. You definitely want to feel relaxed in your own space – be it a dorm or a hostel. However, you do not have to shell out too much to do so. Mount some family pictures and make your own ornaments. There is no need to buy a lot of new things as you will not keep your furniture for long.

#3: FREQUENT EAT OUTS

It is impressive how Singapore embraces racial harmony. That said, it is common to be friends with international students. Many of these students reside in the school’s approved hostels. Due to their living situation, some opt to dine out. Who can blame them? Dining out is utterly convenient. You do not need to prepare your food or wash the dishes. However, frequent trips to the nearest restaurant or pub can quickly exhaust your allowance.

You would not even realize how much you are spending until it is too late! Put a realistic budget in action, if you do not want your finances to wore out.

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BONUS: Let us talk about textbooks. This expense category can be uncertain at times. Universities tend to provide a long list of reading materials. The mandatory and recommended books may not be clearly written out. Before you spend your entire allowance on the comprehensive list, be sure to buy what you will actually use for the course. Find second-hand books from the last year’s students or from the Bras Basah Complex. There are free online resources too!

Sources: 1 & 2

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

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

Overcoming 3 Financial Issues That Young Singaporeans Face

We encounter several new hurdles as young adults. We no longer receive a daily allowance from our parents and we have to pay the bills. Not to mention, our financial capabilities are seemingly low at the start of our careers.

On that note, here are three financial issues that young Singaporeans face and ways to overcome each one…

ISSUE #1: LACK OF FINANCIAL KNOWLEDGE

We cannot deny the fact that personal finance is rarely taught in schools. According to Kevin Gallegos, a consumer finance expert at Freedom Financial Network, the Millennials’ crying need for more financial literacy cannot be overstated. It is never too late! Financial literacy is something you shape through conscious effort, much like learning how to write.

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Young adults must take the initiative to educate themselves about the important topics surround money. These topics include budgeting monthly expenses, saving for retirement, and managing student loans. Following an online resource like MoneyDigest.sg or MoneySENSE.gov.sg can provide the foundation for you to learn the basics.

ISSUE #2: HAVING A LOW INCOME

Unless you are an heir to a successful company, the start of your career marks the time when your finances will be stretched. Having a low income impacts your ability to fulfill your primary needs such as food and shelter. Proper allocation of funds can help improve your situation.

Young Singaporeans shall distinguish between the needs and wants. If your income is not sufficient to address your primary needs then, you may consider taking a part-time job or freelance projects. Alternatively, you may eliminate unhealthy (and costly) lifestyle choices such as smoking. Imagine how much cash you will exhaust in a week if the price of a package of Marlboro cigarettes is about S$13!

ISSUE #3: CONFUSION BETWEEN SAVING AND INVESTING

Young adults are often experiencing a mix up between saving and investing. The idea behind it is similar, but the “mechanics” are different. Both involves the act of setting money aside for future use. The former is allocated after meeting your fixed and variable expenses. While, the latter is allocated if you want to grow your savings. Maintaining a realistic balance between these two is crucial for wealth cultivation.

Do not be afraid to read about investing as the power of compound interest works in your favor at the present time.

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To conquer the challenges that young adults face, they must educate themselves about personal finance. This will help them manage their spending habits, repayment of student loans, and so on. This is a great start to your financial journey.

May you have the confidence to overcome each financial issue ahead!

Sources: 1 & 2

How To Efficiently Declutter Your Personal And Financial Life

The perfect time to organize your thoughts, to arrange your bills, and to declutter your home is NOW! Here are five strategies that you can start with:

CLEANSE YOUR PHONE

We are constantly glued to our devices. I do not mean to be a bearer of bad news, but your devices are not entirely sanitary. Various researchers have found Escherichia coli bacteria, Streptococcus, and other pathogens living on mobile phones. It is important to employ measures to keep yourself healthy and to minimize medical bills.

One of the first few things that I do upon coming home from work is to cleanse my phone. I grab a couple of cotton pads and spray it with Isopropyl Alcohol. This helps me disinfect my phone as I am constantly in contact with relatively sickly children. You can adopt this habit too!

FLOSS YOUR PEARLY WHITES

Many experts encourage the importance of flossing in one’s daily grooming routine. A floss is designed to reach between the gums and the teeth. It acts as an efficient tool to lower the risk of gum disease, tooth decay, and periodontal disease.

You do not want to go to a job interview with a flaming bad breath!

PURGE YOUR ITEMS

Are you getting trapped under a mountain of rubbish? Tidy your space by practicing the one-item-in and one-item-out policy. This policy works by bringing a new item in and dropping an old item out. You can either donate, sell, or throw the old item. Doing this regularly will improve both your financial and mental health.

ORGANIZE YOUR BILLS

Never forget where you put the bills or when their due dates are by designating one place for them. You read that right! You have to decide whether you are going to file all your bills in a tangible box or in a computer folder.

Some bills arrive by electronic mail while some arrive by postal mail. Printed bills must be kept in a labeled box. While for virtual storage of bills, make scanned copies of those that arrive in the mail and put them into a labeled folder in your laptop.

EASE YOUR MIND

Create a healthy division between your work and personal life to lessen your stress. For instance, my co-worker does not respond to the client’s calls after 7 PM. You may do the same thing, if necessary. Another way to keep your mind at ease is by not checking your email before you go to sleep.

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It is inevitable to spot a message that will your mind buzzing all throughout the night. Furthermore, it may make you anxious to go to work the next day. Do you want that to happen?

Sources: 1 & 2

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