In a blink of an eye and click of a mouse, 2022, the Year of the Water Tiger, has finally made its grand appearance.
If you have been feeling like money has escaped you like water these past few months, you are hardly alone.
After two festive seasons in quick succession the past couple of months, your wallet must be feeling the pinch and your bank account must have taken a big hit. Blame it all on the presents you gave and red packets you probably had to dole out.
So if your finances are somewhat battered now, how can you recover your losses? The easiest way would be to stop spending and start saving more.
But as it is with many things in life, this is easier said than done. If sheer discipline has never been your strong suit, you have to resort to some other means to force yourself to set aside some money every month.
Here are some ways to get started.
Set up an automatic bank transfer
Most of us spend whatever is in our bank account after our pay has been credited, and hope we didn’t overspend for the month.
That can hardly be termed saving – especially if you don’t keep track of how you spend. Not to mention the abysmal interest that the bank pays you.
What would be a much more effective way is if you automate your savings. Set up another account from which no withdrawals are made.
Then transfer say, $300 to that account every month. Automate this process via GIRO so you don’t forget to make the transfer or get tempted to spend it instead.
Save your loose change
Small savings add up to a lot, even coins. The next time you accumulate a bunch of coins, separate them into different coin or piggy banks according to their denominations.
Empty the piggy or coin banks after a few months, count the coins, and change the coins into notes at your nearest convenience store or neighbourhood store.
You’d be surprised by how much they can add up to be!
Opt for a bancassurance account
Bancassurance refers to the selling of life assurance, as well as other insurance products and services by banks.
The insurance coverage provided may not be as comprehensive as what a critical illness insurance policy covers for example, but it will suffice if you want some basic insurance coverage plus a way to save some funds.
Just like an insurance policy, the bank holds this amount of money for you and grows it, so by the end of say, 10 years, you get back what you invested plus a little more – on the condition that you do not withdraw any funds from the account during the tenure.
You can opt for monthly or yearly transfers to pay for the premium. Choose an amount that you can comfortably afford.
However small the amount, don’t make the mistake of thinking it doesn’t matter – for instance, setting aside just $1,000 per month means you save $12,000 a year!
The returns may not be massive but what you want here is a system that will help you autosave – and this is exactly what banc assurance does. It’s like a fixed deposit with a little extra something – and better returns.
Start planning for retirement
Retirement may be still a couple of decades away, but there is no reason why you can’t start planning for it now.
In fact, the best time to be saving for your retirement is when you are still relatively young and healthy.
You can contribute funds through the Supplementary Retirement Scheme (SRS), which complements the Central Provident Fund (CPF); but unlike CPF, is completely voluntary.
Depending on how much excess funds you have on hand, you can contribute varying amounts to SRS – subject to a cap – after which you can use the funds to purchase various investment products.
The biggest plus point of SRS is that apart from helping you save for retirement, you are also eligible for enjoy tax relief in lieu of the SRS contributions you make.
SRS contributions made on or after 1 Jan 2017 are subject to a cap on personal income tax relief of $80,000 per Year of Assessment from Year of Assessment 2018.
Meanwhile, investment returns are accumulated tax-free and only 50% of the withdrawals from SRS will be taxed at retirement.
So in other words: You get to save on tax and plan for retirement. Definitely worth considering.
Get funds for emergencies from Friday Finance
It pays to save for a rainy day, as you never know what life will throw your way. But what if even your savings can’t tide you over?
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With interest rates as low as 1% a month, a flexible repayment plan, loan insurance and on-time repayment rewards, taking a personal loan should be a like Friday, a stress-free experience.