Tips on how to be Money Sensible

Personally I adhere to my own set of PSI. Protect, Save and Invest.

Firstly for the start, we have to protect what we have. Our health, insurance will cover this, medical, life and etc… This may not seems to be personal finance but it safeguard our most basic needs. Our safe-net for the future. Future is always uncertain so we have to plan for uncertainties.

Next, after we are comfortable with the most basic covered by insurance, we can look at savings. Of course most naturally all of us would be saving in banks.. that’s the most typical way of savings. For me, I would be doing some research into different banks and different insurance companies providing saving plans to broaden my spectrum of choices. Knowledge comes the power to choose and decide what’s best for myself. Savings come a promising safety net for myself on rainy days and the later stage of my life.

With savings settled, we can look at investments to grow our nest. Apart from working all day long to meet daily expense, let money work for you. They will not work as hard if you do not choose where to put them wisely. OCBC 360 Account is a good place to store funds.

Together with stocks and bonds for the huge appetite. Bottomline is to do your homework in investments and never go into something which you’ve no knowledge of. You do not want to risk your savings for that. And it is certainly not wise to create a man-made rainy days for yourself to settle.

Only spend within your limit. Buy what you need instead of what you want. Keep that in mind.

Of course, once in a while, indulging in things you like is a great way to motivate yourself to save. But do have financial discipline.

Save before expenses. Never the other way round.

Expose yourself to different financial advises and options to keep yourself updated of the latest initiatives.. such as government initiatives SSB.

To sum it all, always plan for the long term and only to start a commitment if you are sure to keep it for long term.

by Ghee Hing

I plan ahead financially for my future by considering major expenses I’ll make during my lifetime – such as buying a home or raising a family – as well as future goals and the role that money will play in the things I hope to accomplish. Currently I try to save at least half of my income regularly, and plan to start investing after doing sufficient research and setting aside an emergency cash reserve first. I’ve also bought insurance to guard against any unexpected medical expenses.

One of my concerns right now is finding ways to boost my income, whether by learning a new skill for that competitive edge, refining my existing abilities or capitalizing on a talent or interest. For example, I intend to start learning to play the piano again through free online lessons (haven’t touched it since I was a kid). I want to learn it for my own pleasure and it’ll take time to reach any decent level of ability, but in the future and with consistent practice, I may be able to turn my hobby into something that can bring both money and joy.

I also avoid debt like the plague – but it’s been tricky. Traditional routes to securing big goals, like purchasing a home, seem to lead straight into debt. Priorities clash all the time. I’m at a turning point in my life where I have to make a decision on whether to further my studies, which would – unsurprisingly – incur significant debt. But do I want to be burdened by debt when I might want to start a family by the time I graduate? What if an aging parent falls ill, or if the economy takes a turn for the worse? Is a degree these days really worth its cost anymore? And so on. Another example: I have zero interest in getting a credit card, but occasionally have had to ‘pay through a parent’ for credit-only expenses. In a world which revolves around money and often seems to encourage one to spend, sometimes making the right decision or striking a balance seems difficult or impossible, and I can only take small, concrete steps in the hope that things will work out.

Beyond practical concerns, I think questioning the importance of money in one’s life is an essential part of financial planning, as much effort and long hours of work are usually invested in accumulating wealth – often at the expense of other things. Despite our best efforts, genuine security can be hard to come by, especially when based on such a powerful but volatile force. The financial disasters I’ve witnessed in my relatively short lifetime – from the collapse of Wall Street to entire countries teetering on the brink of bankruptcy – suggest to me that currency can be easily destabilized by events that few can foresee or prevent in an increasingly unpredictable world. Money may be useful and even ‘necessary’ for living in the modern era, but an overreliance on it has its pitfalls.

The degree of influence money has over our lives and our subsequent dependence on it has led me to begin exploring alternatives, as well as to look at money in broader terms – from how it relates to other aspects of life, like time and happiness, to people who attempt or succeed in living without the presence (and governing force) of money in their lives; to how money has been viewed and treated throughout history as a whole and to counter-cultural ideas like the Tiny House Movement (not directly applicable in SG, but inspiring nonetheless).

by Mae Tan

I take charge of my personal finances by sticking to a monthly budget and tracking every expense I make – big or small. After landing my first job, I started this habit for several reasons: firstly, I wanted to know how much I usually spent in order to start saving in earnest for future goals; secondly, despite the fact that my pocket money used to vanish more quickly than expected, I couldn’t pin down exactly where it had gone to. And lastly, although I’ve never been a big spender, my piles of unused clothing and clutter accumulated over time suggested that I could be spending my money more wisely.

Earning a paycheck for the first time, through my own hard work and labor, made me realize the true value of every cent. My small salary forced me to reevaluate my spending habits, separating wants from actual needs and cutting back on things I used to take for granted (like dining out on a regular basis). These days I choose my purchases very carefully – from the bare necessities to little indulgences like the occasional fast food meal. I also try to stretch my dollar whenever possible, whether it’s shopping at a discount store, packing meals to work, walking instead of taking the train, or making full use of resources I already have instead of buying something new. At the end of each month, I tally my records and assess if I’ve kept to or strayed too far from my budget, as well as if my expenditures were balanced with substantial savings.

It’s been nearly a year since I started my routine, and although I’d like to say that I stuck to my budget perfectly all this time, I’ve found that it’s necessary to be flexible. Life will inevitably throw curveballs at you – whether for an unexpected monetary contribution at work, or an urgent visit to the vet – and it’s important to adjust one’s expectations accordingly, rather than get disappointed or upset. There will also be times when increased spending will be difficult to avoid, such as for gifts during the holiday season. Foreseeing this, I try to make up for the extra expenses and save more during normal months. I’ve also compiled a list of events I intend to spend on (such as annual book sales and upcoming movies in theaters), so that I can better anticipate them beforehand.

Being able to glance through months of spending in my little notebook gives me a broad view of my spending habits over the long term, and helps me reflect on whether the choices I make are in line with what I actually want for myself and the world (such as the environmental cost of my consumerism). Now when something shiny catches my eye, I saunter over but then ask myself: is this something I really need? Will its appeal wear off quicker than I realize? Will it really make me happy to have it? More often than not I end up walking away again. I’ve found a new appreciation for frugality. I’ve learnt to base my spending habits around simplicity and functionality, rather than luxury and excess.

by Mae Tan