6 New Year’s resolutions on how you could save money in Singapore – After blowing large sums of money during Christmas, be it on presents or your satisfaction, we’ll think it is time to set a new year’s resolution for saving up money. Some solutions worked out and helped you grow personally, while others might increase your financial stability. So, why are you unable to reach your new year’s resolution goals?
The most underlying problem lies in setting a big goal with no plan to execute it. Larger goals are harder to achieve, whereas easier ones are often discouraging.
By setting reasonable goals that are achievable but not too easy to reach, you could effectively save yourself money. Starting small to achieve a greater purpose is essential to building a lasting habit.
Alright, let’s stop beating around the bush and get to the point. Here are 6 tips to save money for a new year’s resolution in Singapore!
- Set a Budget
You should first set up a budget and stick to it to save money. It might not seem like it would affect much at first, but you’ll see yourself saving much more money than before once you delegate your expenditure down to a single dollar. With all of us having different financial situations, it is clear that there is no one size fits all budget for all of us to use.
With this in mind, you should find some time to sit down and create a budget plan that works best for you. Through writing down every financial information, you have and how much each one is. It gives you a top-down view of how much and where your money is going.
Try to sort things from what is essential first, like utilities, rent and stuff along those lines. Then dive deeper into what is vital to your survival first, like housing, food, water, and electricity. After that, plan your expenses for other necessities like gas and clothing. The rest can be sorted into sinking funds, savings, and different categories specific to your needs. It takes a couple of tweaks with a couple of months to get it right, so don’t be discouraged if you have to shift your funds frequently.
- Add more funds to your retirement
Through adding funds to your retirement, be it under CPF (Central Provident Fund) or SRS (Supplementary Retirement Scheme) in Singapore. Placing a few dollars extra at a time could be a healthy habit to have as it sets aside some money that may seem financially uncomfortable for you now. But this would help you out in the long run in the future. You would be able to retire with more money than you would already have at the start. And with the high CPF Interest percentage for Singapore Citizens, it makes it all the more with it for you to invest in your retirement savings.
- Start saving for emergency funds
Before you fully invest in paying off your debt, securing at least one month worth of emergency savings is safer and much more urgent. An emergency savings fund could help you and your family survive financial hardship while keeping you from accumulating more debt while paying off your current ones. In addition to that, you should keep your emergency savings at a high yield savings account that you can access during emergencies. With one month being the bare minimum, you should be saving. Experts typically recommend keeping at least three months’ worth of living expenses.
- Reduce your debt
With lesser debt, you will be able to decide where your money goes rather than sending most of your income to someone else for payments. If you have a large sum of debts stored for you, order your debts from the highest interest rates to the lowest first and pay off debt from the highest first before reaching the lower ones as the longer interest accrues on a specific balance, the more you’ll have to pay this is also known as the debt avalanche method.
On the other hand, if you are having difficulty with your current bills, your resolution can be catching up to your invoices and settling your debt payoff in the next year or so. Once you pay the debts off, you would no longer have to make the minimum monthly payment you once have, so you could now repeat that by placing that amount to the next debt on the list.
- Invest some.
When you want to start investing, make sure you handle your financial picture first. So, get to know your spending, savings and taxes first, and after that, once you know how much you could invest, research the market trends within the company you are trying to support. With that, have a targeted asset allocation that could consist of the overall mix of stocks, bonds, and cash in your portfolio that you’re comfortable with, even in a down market. Bear in mind that it should be synchronized with your time frame, risk tolerance and the goals you set. With a longer time, frame, you’ll have to benefit from up and down markets in general potentially.
- Build your credit score
Last but not least, try to start building your credit score. The main reason to for the credit system is to create a place to give future lenders and creditors information about potential borrowers. This allows them to make informative decisions and weighing the risks of loaning money to you. With more credit score you could find yourself with much lesser interest rates and more banks that would try to reach out and lend their money to you. If you haven’t build your credit yet you might end up regretting it when you want to buy something big like financing for a car.
K Cloud Accounting is a Singapore Xero Accounting Services consultant.
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6 New Year’s resolutions on how you could save money in Singapore