Tips on how to be Money Sensible

I plan ahead financially by doing a forecast of the money I will spend for the next few months so that I am not left cash strapped. There is also a need to know when to pamper yourself and when not to.

I also try shopping online for the best deals available and it saves me time and money. Being a car owner, I only pump petrol at stations where I can enjoy discounts and I plan my route in advance to save on petrol which in turn the money saved becomes my savings.

Impulse spending is one of the factors to consider when you get out of cash pretty quickly. I do research on the things I want to buy and ensure that I am getting the best deal. For larger purchases, I also wait for a few days to make my decision as the saying goes, “if you still need the item after 5 days, it is probably not impulse spending”.

I am also going to take out a savings insurance to ensure that I am being “forced” to save up and on top of that I have set up my own savings account so that I can contribute a part of my earnings to that account.

When it comes to debts, I follow the principle of NOT taking debts which will not make me money or unless absolutely necessary, like for a flat. This ensures that I am not tied up in debts that will pull me down on my financial health while providing little or no benefits. Since debts are usually for the long term, this is also an important thing to consider.

Last but not least, I try not to apply for credit cards as future spending is highly dangerous. A debit card works just fine. We do not know how stable our incomes are in the future and by spending with a credit card we might chock up debts with exorbiant interest rates. That being said, it can save you a substantial amount if you are very, very disciplined on the use of your card.

by Daniel Tay

I plan ahead financially for my retirement by carrying out a financial health-check regularly. By doing so, I will learn if I need to re-assess my savings plan or seek more information. Firstly, I need to define my retirement goals. Hence, I need to determine the estimated amount I need in order to retire comfortably. The figure should take into account of inflation rate and the average life expectancy.

Secondly, I need to understand my current financial situation such as how much you have in your CPF, savings, assets, investments and insurance plan. I should take into account the debts that I will incurred such as student loan, mortgage loan and always to minimise debt obligations during my golden years. I should also take into account the fact that some of my savings and investment will go into other expenses such as medical fees. Hence, I should ensure that I allocate enough resources for these expenditures.

After that, calculate the difference between the funds I expect to have at retirement and the amount I will need. Then, work out how much I need to start saving each month from today in order to make up for this shortfall.

Thirdly, I need to understand much I can afford to invest and my risk profile – how much money I can afford to lose, before I begin to examine the wide range of investment products available. These will changes depending on my personal circumstances. For instance, when I am a young working adult, I can invest in investments that will generate higher return, hence higher risk. However, if I am approaching or at my retirement age, I may want to switch to less risky portfolio as I become less risk adverse due to the need for a more stable flow of income.

Hence, it is important to monitor my plan regularly and make changes to the plan according to my changing needs or appetite for risk. In addition, one should continue to reassess my plan to ensure that goes hand in hand with the changing environment situations such as inflation.

One can do this simply by using Excel and online calculators from CPF or MONEYSENSE website. However, it is always better to seek professional help from a financial adviser whom is certified and you trust.

In addition, it is important to avoid making assumptions such as my kids will take care of me, I can rely on CPF and I don’t need so much money to retire.

by Bee Geok Ong

I take charge of my personal finances in various methods, but these are the key strategies that I find most empowering and practical:

  1. Pay yourself first. Commit to saving a fixed, minimal percentage of your income every month. At least 30% is a good gauge, but if you’re new to this, even a few hundred dollars every month can make a big difference over time.
  2. Put your savings and spending money in separate accounts. For savings, UOB One and OCBC 360 are great options as they offer higher interest rates. Separating these helps me to ensure I never spend more than I can afford to, and that I never dip into my savings for expenses.
  3. Live frugally and not spend on excessive luxuries. I don’t buy into the need for branded items, regular cafe hopping or retail therapy. Meals are at restaurants only for special events or the occasional treat.
  4. Use public transport and public facilities wherever possible. I take trains and buses for my daily commutes, and I would rather jog at the (free) stadium track than to pay an expensive gym membership just to run on the treadmill.
  5. Cut down on Starbucks and other expensive snacks or treats like llaollao and Magnum ice-cream. I do indulge in them every now and then, but they are not a regular affair.
  6. Choose hawker centre food over restaurants or cafes. They are cheaper, and which true-blue Singaporean doesn’t love local food? Certainly not me! If there ever was an ambassador for hawker centre food choices, I would certainly be endorsing them all the way!

Most importantly, I commit to reading financial blogs (over lifestyle / beauty / food blogs) and news to become a more intelligent and knowledgable person enhancing my skills in personal finance. Life is too short to always be spending it on Facebook or gossip.

by Fiona Dawn Cher