man calculating his finances

Managing Your Finances Like a Pro

2020 highlighted how fragile our finances can be. While you might have money in the bank, one or two disasters can easily put a strain on your savings. Don’t end up being broke by managing your money properly and fortifying your savings. Here’s how you can do just that:

Avoid Unnecessary Spending

Cut the expensive store-bought lattes in the afternoon and make your own coffee at home. Your need for expensive coffee probably stems from social pressure or a learned routine. Eat at home if you can — preferably with the food you cooked on your own. If you don’t have the time, spend two or three hours on the weekend cooking for the whole week. You’ll be eating healthier, and controlled portions will keep the extra weight off. You can dine out or have a cup of latte once a week; just don’t make it a regular thing.

Don’t buy a car if you can take public transport. Less than 12 percent of Singaporeans own a car, and there are no justifications for owning one in the city aside from vanity and extravagance. Time your vacations on off-seasons. You can probably save up to 50 percent on accommodation expenses if you travel on relatively quiet months.

Manage Your Credit Card Debts

Singaporeans rarely have problems with their credit cards. Most have debts of less than $2,000 or $1,500. In comparison, the average U.S. citizen has more than $5,000 in credit card debt. Of course, if you’ve overdrawn your credit card or incurred significant debt, it’s best to opt for an effective debt consolidation plan, so you can begin paying off what you owe.

Debt consolidation loans restructure your debts, allowing you to pay with reduced interest. Start bringing cash and hold off on using digital avenues of transaction. Spending with your card or phone doesn’t have the impact of paying in cash. Once you’re done paying off your card debts, be sure to use your credit card only in emergencies. Avoid buying on installment and try to save up the cash if you really want to buy a big item.

couple looking at a house

Invest in a Home

Buying a home is one of the best investments to secure your future. Property prices in Singapore might be a bit high, but you can still purchase a decent three-room apartment for around $300,000 $200,000 (if you buy a non-mature estate). Most Singaporeans earn around S$5,000. Saving half of that for 2-3 years should be enough for the 25 percent downpayment, and the rest can be covered through a bank loan.

It might take more than 10 years to cover the loan, but you won’t have to worry about rent for the rest of your life. You can also opt for longer terms if you want to keep more of your money, but you’ll be paying higher interest rates.

Plan Your Retirement Early

Put as much money into your retirement fund as early as possible. You’ll have limited funds once you retire. Ensuring that your finances don’t dry out is essential if you want to live a long happy life after retirement. Most Singaporeans live for more than 80 years, so expect to draw out your retirement fund for 2-3 decades. You can also keep working if you are still able.

By 2022, Singapore will raise the retirement age to 68, allowing workers to stay in their jobs for a few more years and continue earning. Allocate some of your earnings into investments. Opt for a reputable financial manager or advisor and choose an investment program with minimal risks.

Stay Fit and Healthy

The biggest financial drain on Singaporean retirees is healthcare. Singaporean healthcare might be subsidized, but it’s far from being free. Healthcare costs are rising and one way to avoid them is staying away from illnesses. Stick to a proper diet and perform physical activities. Being overweight or obese drastically increases your chances of hospitalization. Gaining extra weight increases your risk of Type II diabetes, coronary heart disease, stroke, kidney problems, liver problems, and a host of other medical conditions.

Singapore has a rich fitness culture. You won’t have problems finding running or cycling groups that are willing to take you in. Joining a group keeps you motivated and makes it easier to stick to a routine. You can also join a gym or just do your workouts at home if you prefer a bit more privacy.

Earning money is not enough. Learn to keep as much of your earnings as you can, so you can make it grow with proper investments for your future.

Scroll to Top