personal finance Archives | Page 27 of 37

Must Read: Best Financial Advice From The Experts

If a financial expert is out of your reach, the next best thing is to read about their nuggets of wisdom.

1. GEORGE KINDER

George Kinder’s professional background is impressive. He is a financial author, a certified financial planner, and a founder of The Kinder Institute. He surely know what he is talking about when he said:

“It’s about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life…the asset allocation, the estate plan, [and] the retirement plan might as well be thrown out [of] the window.”

Putting meaning to the currency motivates and directs you to your goals. If good health is vital to you then spending money on organic food is not a problem. And if family is your top priority, allocating assets to your children should be a part of your Last Will.

2. CULLEN ROCHE

Cullen Roche, the founder of Orcam Financial Group and Pragmatic Capitalism (website), shares that the primary way to financial success is more than just saving. It is by investing more…in YOU! Since your primary source of income is the person you see in the mirror, a good way to maximize your wealth is to make yourself valuable to other people or other companies.

To have an edge from the rest, you must never stop learning. Education that improves your skills so you can adapt to the ever-changing economy. I personally recommend you to start with free Internet education from YouTube’s Khan Academy, YaleCourses or Crash Course.

3. FRED SCHWED

A timeless advice resides in the classic book by Fred Schwed entitled Where Are the Customers’ Yachts?. As published in 1940, Schwed wrote:

“Like all of life’s rich emotional experiences, the full flavor of losing important money cannot be conveyed by literature. Art cannot convey to an inexperienced girl what it is truly like to be a wife and mother.”

Paradoxical as this may sound, the book expressed that life is more than just something you read from a piece of literature. Same goes for finance. You cannot simply learn and understand everything about money by merely reading two books written by experts. Instead, you must experience wins and failures firsthand. An investor can never detach himself from his portfolio gains or his portfolio losses.

4. MIRANDA MARQUIT

Miranda Marquit, the founder of Planting Money Seeds, highlights that by knowing that you have enough purchasing power may turn into comfortable spending without keeping the best options for your finances. Just because you can afford something, does not mean that you should buy it. Purchase within your means by balancing what you need and what you want.

5. WARREN BUFFETT

Warren Buffett needs no introductions. As he is extremely frugal, he shared this sentiment: “Price is what you pay; value is what you get.” Frugal people know how to distinguish between the price and the value in order to get the best deals and achieve long-term goals. For instance, a frugal person will use accumulated coupons and purchase items that are only on his or her shopping list. While a cheap person will highly decline to spend more than S$90 on a week’s groceries even though it is not sufficient for the whole family.

Be frugal and not cheap!

Sources: 1,2 & 3

4 Essential Money Questions Poly And Uni Students Shall Ask

Entering Polytechnic or going straight to University can be exhilarating! Some even move to different countries and make significant decisions by themselves. Managing your personal finances at this age can be challenging but it is always a good idea to start early.

Because of the hefty fees and other expenses parallel to Polytechnics and Universities, it is important to consider these aspects of your finances…

1. WHO IS RESPONSIBLE FOR PAYING WHAT?

Poly and Uni students can collect money from different streams such as their part-time jobs, parents, loans, grants, scholarships, or a combination of all these. On the other hand, the categories of expenses are varied too. You will be paying for tuition fee, books, transportation, food, living expenses (if applicable), and so on.

Sit down with your parents to discuss who is responsible for paying each of the expenses. Offer to help if possible.

2. HOW DO YOU MAKE A REALISTIC BUDGET?

It is easy to get complacent with your finances as a student especially because you do not have to pay for mortgages, for childcare, and for other “adult” responsibilities. However, it is easy to lose track of your cash flow if you are to lax about your money. Remember that your income is limited and infrequent so you have to save the most of it.

Start by creating an easy yet realistic budget with the envelope system. With this system, tracking your spending and analyzing which category to cut down does not take too much of your time.

3. WHAT IF I WAS SHORT OF CASH?

Say unexpected events happen and you run short of cash, will your parents help you out or not? If so, will the money be given as a gift or as a loan? Is it possible to get a part-time job instead?

During my first year in Uni, I did not expect the influx of social expenses such as club registration fee and school dinners. I had to save up some of my allowance and pack some lunch in order to settle this unforeseen expenses. Aside from this, you can gravitate toward part-time jobs. Your part-time job can either add to your school allowance or buffer emergency fees. Know how to hunt for a job through this simple guide.

4. WHERE DO YOU LOOK FOR FINANCIAL GUIDANCE?

Every student has a different financial circumstance influenced by how much or how little the parental involvement is. I was very fortunate that my parents supported me all throughout my years as a student. I did not even have my own bank account then! Thus I can say that my parents were the ones who guided me financially as a student.

In contrast with my situation, I had two friends who were basically financially independent during their Poly and Uni years. One was a scholar while the other was in army. They monitor their own bank accounts, control their own budgets, and dictate their own spending. For financial guidance, they still seek their parents’ advice at times but mostly do everything on their own.

Image Credits: pixabay.com

If that is not enough for you, you can always consider getting useful guidance from qualified financial professionals.

Sources: 1, 2, 3,& 4

Lethal Credit Card Mishaps You Must Avoid

A recent study showed that 85,352 Singaporeans have unsecured debt and missed payments attached to their credit card bills. Whether it is due to untidiness or carelessness, these missed payments increase the charges and interest rates to further trap you into a vicious debt cycle.

These credit card mistakes are lethal as it causes great destruction to your finances.

SETTLING YOUR BILLS LATE

One of the most harmful credit card mishaps are late payments. Not only are you bound to pay the “late payment charges” but you also have to pay interest rates for some banks. Interest rates elevate your outstanding balance with each passing day.

For example, if the minimum payment is not received upon the due date, you will have to pay S$60 for your DBS Live Fresh Card and S$80 for your OCBC 365 Credit Card. If you pay your outstanding balance by the due date of your statement and there are no additional balances from the previous statements then you will pay no charges.

Solution: Stay organized to keep up with your bills. Set aside some time in the beginning of the month to make a list of the bills you are expecting to receive. Put it on your working desk or create a file for it. It is safer to pay the bills at least two days before the due date.

Alternatively, you can get your payments automated. Since you are prepared for the bills earlier on, you may have available money in the bank to pay it the same day as you received it. If you have automatic payment scheduled and you still received a billing statement, call your bank or creditor.

GETTING INFLUENCED BY THE PERKS

A number of Singaporeans are swayed by the credit card companies because of the free gifts and the attractive reward system they offer. While there is totally nothing wrong with desiring these things, it is a mistake to choose a card for its benefits alone. These “free gifts” you receive upon signing up usually come with several terms and conditions.

For example, credit card company A offers you a free luggage as a welcoming gift. However, you have to fulfill the minimum purchase of S$1,500 to claim this gift. If you cannot accomplish this within the given amount of time then your “gift” will no longer be received.

Solution: Before choosing a credit card, you must compare its entire features as well as its fine print. In the fine print, you will discover the different charges, limits to rebates and terms of the welcoming gift.

Image Credits: pixabay.com (CC0 Public Domain)

CLOSING OUT YOUR CARDS

Closing out your cards because they are underused or because you had finally paid off your entire balance may not be the best move for your credit score. Remember, two important elements of the credit score are the utilization rate and the average age of your credit accounts. 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.

Solution: Keep 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.

Sources: 1, 2, 3, & 4

6 Major Reasons Why Young Working Adults Are Not Saving Enough

1. MINIMUM WAGE

As fresh graduates enter the workplace with little to no experience, some are forced to settle for entry-level jobs with minimum wages. Whether you are a secretary at a recruitment firm or a personal assistant at an advertising company, the relatively low salary you earn every month makes it difficult to save money.

2. RECURRENT RENT EXPENSE

Some young adults move out once they start earning a decent amount of money. The independence, freedom, privacy, and convenience can be attractive but the reality of the rent expenses can hit you hard.

In the city centre, it will cost you at least S$500/month to live in a single room and at least S$1,500 to live in a small apartment by yourself. It makes more economic sense to stay at your family home and set aside the hundreds of dollars per month to your savings or investments.

3. INDULGING ON DESIGNER LABELS

Most young working adults spend their fortune on designer labels such as Prada and Louis Vuitton as well as other artisan brands. You may think that you are standing out from the crowd by carrying your S$2,000 Prada tote bag and your S$300 artisanal fragrance but you are simply creating holes in your pocket.

4. CABBING EVERYWHERE

Heading to work late? Hail a taxi.

Coming home after a crazy night out? Hail a taxi.

Aside from designer and artisan goods, you are preventing your savings from growing by cabbing everywhere. Five late night taxi rides can cost you at least S$100 and that equates to about 10 lunches at the nearby food court. This is why you must set aside an “emergency taxi fund” with a maximum of S$60 per month. You must not ride a taxi beyond your intended budget.

5. TECHNOLOGY AS NECESSITY

Technology is so pervasive in a young adult’s life that its costs are virtually inescapable. Interacting through social media is not just a culture but also a necessity. But staying connected comes with costly price tags as having the latest gadgets and paying for the monthly broadband fees can affect how much you can save.

6. EASY ACCESS TO SAVINGS

Most of us struggle with keeping our hands off our savings accounts. With the easy access of Internet banking, credit cards and multiple ATM machines, it is more convenient to spend cash than to save it. For young adults with this dilemma, make spending a chore by converting some of your money to US dollars. The thought of having to go for and pay for the currency exchange will likely to dissuade you from spending!

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1 & 2

5 Efficient Ways To Manage Your Elderly Parents’ Money

Three months ago, social workers observed that there were more senior citizens who had been cheated or financially abused by their own children. There were some cases where the children would manage their parents’ money and end up taking their savings for themselves. While others trick their parents into selling their homes and leave them homeless. This is the sad truth that we have to swallow!

However, if you belong to the fraction of people who love their parents and want to take care of them from the goodness of your heart, consider these 5 Ways To Manage Your Elderly Parents’ Money:

1. DISCUSS ABOUT THEIR NEEDS AND GOALS

You have one task – to organize your elderly parents’ financial life. Know what issues or topics to discuss that will aid this task. Due to the declines in someone’s body as they age, topping the list is healthcare. You must introduce the advantages of life insurance, medical insurance, or long-term care coverage policies. Also, talk about estate and other assets. Having a last will and testament ready is a crucial thing. Then, talk about what they want to accomplish with their money.

Emphasize on the benefits of the talk and speak with love. Delaying the talk will only be more expensive because as health declines, premium prices increase.

2. DO YOUR RESEARCH

After seeing eye to eye on the important topics, you must prepare the documents needed. These documents are the bank statements, credit card bills, tax records, investment accounts, insurance policies, and so on. Review their current financial situation with these documents. Then put these in one safe place such as a relatively small safe deposit box at home. Grant access only to the people who are really trusted (e.g., the lawyer or immediate family members).

3. IMPLEMENT A MONTHLY PROCESS

Each month you must ensure that their bills are paid, their income are accessible, and their living comfortably.

To pay recurring bills automatically, some banks enable automatic transfer of payments. Use this system to pay for credit card bills, loans, and rent. To make their income from investments accessible, help them set up direct deposits. Lastly, to help them live comfortably, you must review their financial activities each month.

4. PROTECT THEM FROM SCAMS

From fake contractors to reverse mortgage scams, con artists of today had come up with more sophisticated ways to fool elderly people to get money or to sign away equity on their homes. Aside from this, handphone scams are on the rise. Common handphone scams occur when an unknown number contacts you and tells you to collect your prize or to pay for your kidnapped relative.

This is why it is vital to keep your parents updated with the newest scams. Visit Scams Singapore – a blog dedicated to identify and relay information about the existing frauds.

5. GIVE THEM ALLOWANCE

Protected by the law, senior citizens who are unable to sustain their lifestyle can apply to the court in order for their children to provide a monthly allowance. With the Maintenance of Parents Act, you have a responsibility to support your elderly parents. Instead of providing them with a certain percentage of your pay, it is good that you discussed their spending needs and goals first.

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1, 2, & 3

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