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4 Affordable Investments You Can Start With In Singapore

One of the most common barriers to getting started with investing is the belief that you must first have a large sum of money. While this is a prevalent myth, it is not uncommon to hear. Fairly speaking, not everyone has S$100,000 on hand. But the good news is that you don’t even need that much to get started.

Investing is assumed as an adulting milestone. After all, only a few of us would have considered investing for ourselves unless we attended business school or financial programs. You can’t smell, touch, or hear it, hence it is intangible.

However, there are numerous accessible investment options available today, and it pays to have the following things before you begin:

  • 3–6 months’ worth of emergency funds
  • Insurance plan(s) in place
  • Good control over your debt (being able to make on-time payments on all monthly loan obligations)

If you’ve already done all of that, here are 4 low-cost investments you can start with:

Singapore Savings Bonds (SSBs)

Singapore Savings Bonds (SSBs) are a type of government-issued retail savings instrument offered by the Singapore government. These bonds were introduced by the Monetary Authority of Singapore (MAS) in October 2015 as a way to provide individuals with a safe and flexible savings option.

The most commonly tracked index in Singapore is the Straits Times Index (STI), which represents the performance of the top 30 companies listed on the Singapore Exchange (SGX). Here’s an overview of index investing in Singapore:

Low Risk: SSBs are considered one of the safest investment options available to Singaporeans because they are backed by the Singapore government. Due to the Singapore government’s backing and the bond’s high credit rating from international rating organizations, it is thought to be almost risk free.

Accessibility: SSBs are accessible to individual investors, including both residents and non-residents of Singapore, as long as they have a Central Depository (CDP) account and a bank account with any of the three local banks: DBS/POSB, UOB, or OCBC.

Tenor and Flexibility: SSBs have a fixed term, usually ranging from 2 to 10 years, with interest rates that vary depending on the term. Investors can choose to redeem their SSBs at any time without incurring penalties. This provides flexibility for investors who may need to access their funds before the bond matures.

Interest Rates: The interest rates on SSBs are determined based on the average Singapore Government Securities (SGS) yields over the last month. These rates are typically higher than the interest rates offered by traditional savings accounts. SSBs also include having a 10-year maturity, which incorporates step-up interest rates. This implies that your coupon payments will increase the longer you hold your investment.

Monthly Application and Redemption: Investors can apply for SSBs during specified application periods, and the bonds are issued monthly. Similarly, they can redeem their SSBs monthly without penalties.

Investment Limits: There are minimum and maximum investment limits for SSBs. The minimum investment amount is relatively low, making it accessible to a wide range of investors.

Interest Payments: Interest payments are made every six months from the issuance date of the bond. Investors receive their principal amount back when the bond matures.

Index investing in Singapore, like in many other countries, involves investing in a portfolio of stocks or other assets that replicate the performance of a specific stock market index. 

Exchange-Traded Funds (ETFs)

ETFs are one of the most popular ways to invest in Singapore’s stock market index. There are several ETFs listed on the SGX that track the STI. These ETFs offer investors a convenient and cost-effective way to gain exposure to a diversified portfolio of Singaporean stocks. Some well-known ETFs tracking the STI include the SPDR Straits Times Index ETF and the Nikko AM Singapore STI ETF.

Unit Trusts and Mutual Funds: There are also unit trusts and mutual funds managed by various financial institutions that focus on tracking the STI or other specific market indices in Singapore. These funds pool money from multiple investors and invest in a diversified portfolio of stocks that closely mimic the index they track.

Robo-Advisors: Robo-advisors in Singapore often offer index-based investment portfolios as one of their investment strategies. They use algorithms to create and manage diversified portfolios of ETFs or index funds tailored to an investor’s risk tolerance and financial goals.

Diversification: One of the primary benefits of index investing is diversification. By investing in an index fund or ETF, you gain exposure to a broad range of companies and industries within the Singaporean stock market. This reduces the risk associated with individual stock picking.

Low Costs: Index funds and ETFs typically have lower management fees compared to actively managed funds. This cost efficiency can be particularly appealing to long-term investors.

Dividends and Returns: Investors in Singaporean index funds or ETFs can potentially earn dividends and capital gains based on the performance of the underlying index. The returns will closely mirror the index’s performance.

Liquidity: ETFs and index funds are traded on the stock exchange, which means they offer high liquidity. You can buy and sell them throughout the trading day at market prices.

Risk Management: Index investing in Singapore can be a suitable option for investors who want to participate in the stock market while managing risk. Since you are investing in a diversified portfolio, your investment is less affected by the performance of individual companies.

Regular Savings Plans (RSPs)

These are a specific type of investment plan designed for individuals who want to save and invest regularly over time. These plans are commonly offered by financial institutions, including banks and investment firms, to help Singaporeans accumulate wealth for various financial goals, such as retirement, education, or wealth preservation. Here are some key features and details about RSPs in Singapore:

Regular Contributions: Singapore RSPs involve making consistent, fixed contributions to your chosen investment portfolio. These contributions can be scheduled on a monthly, quarterly, or annual basis, depending on the plan and your preferences.

Investment Options: RSPs offer a range of investment options, including mutual funds, exchange-traded funds (ETFs), stocks, bonds, and other asset classes. Investors can typically select the combination of investments that align with their risk tolerance and financial objectives.

Dollar-Cost Averaging: RSPs employ the dollar-cost averaging strategy, where you invest a fixed amount of money at regular intervals, regardless of market conditions. This strategy can reduce the impact of market volatility on your investments by allowing you to buy more shares when prices are low and fewer shares when prices are high.

Flexibility: Most RSPs in Singapore offer flexibility in terms of contribution amounts and the ability to change your investment portfolio or adjust your contribution frequency as needed. This adaptability allows you to respond to changes in your financial situation.

Long-Term Focus: RSPs are well-suited for individuals with long-term financial goals. They provide a disciplined approach to saving and investing over time, helping you accumulate wealth for retirement, a home purchase, or other major expenses.

Cost-Effective: RSPs generally have lower fees compared to making individual transactions, making them a cost-effective way to invest over the long term.

Automatic Deductions: Many RSPs allow automatic deductions from your bank account, simplifying the contribution process and ensuring that you stay on track with your savings and investment goals.

Tax Benefits: In Singapore, certain RSPs may offer tax benefits. For example, the Supplementary Retirement Scheme (SRS) is a tax-advantaged RSP designed specifically for retirement savings. Contributions to the SRS may be eligible for tax relief, and investment gains are tax-deferred until withdrawal during retirement.

Supplementary Retirement Scheme (SRS)

Investing through the Supplementary Retirement Scheme (SRS) is a tax-efficient way to save for retirement in Singapore. The SRS is a voluntary savings program established by the Singapore government to encourage individuals to set aside money for their retirement years. Here’s how you can invest through the SRS:

Open an SRS Account: To start investing through the SRS, you first need to open an SRS account with one of the participating SRS operators, such as banks and financial institutions in Singapore. These operators will facilitate your contributions and investment options. You can open an SRS account as a Singaporean citizen, Permanent Resident, or foreigner with employment income in Singapore.

Make Contributions: Once your SRS account is set up, you can make contributions to it. Contributions to the SRS are eligible for tax relief, which can reduce your taxable income for the year. There is an annual contribution cap, which may vary from year to year. Be sure to check the current contribution limits set by the government.

Choose Your Investments: The funds in your SRS account can be invested in various financial instruments, including stocks, bonds, unit trusts (mutual funds), exchange-traded funds (ETFs), fixed deposits, and insurance products. The specific investment options available to you will depend on the SRS operator you choose. You can create a diversified portfolio based on your risk tolerance and investment goals.

Enjoy Tax Benefits:

Tax Deduction: Contributions to your SRS account are eligible for tax relief. A portion of your SRS contributions can be deducted from your taxable income, reducing the amount of income subject to taxation. This can lead to significant tax savings.

Tax-Deferred Growth: Investment gains and interest earned within your SRS account are tax-deferred until you start making withdrawals, typically after the statutory retirement age, which is currently set at 62. This means your investments can grow without being subject to annual taxes.

Retirement Withdrawals: When you reach the statutory retirement age (currently 62), you can begin making withdrawals from your SRS account. Withdrawals can be made over a specified period or as a lump sum. Withdrawn amounts are subject to income tax, but they may be taxed at a lower rate because you are likely to have lower income during retirement.

Penalties for Early Withdrawal: If you make withdrawals from your SRS account before the statutory retirement age, you may incur penalties and have to pay taxes on the withdrawn amount.

Investing through the SRS can be a valuable component of your retirement planning strategy, providing both tax benefits and a disciplined approach to long-term savings. However, it’s essential to consider your investment choices carefully, stay within the contribution limits, and consult with a financial advisor to create an investment strategy that suits your individual financial situation and retirement objectives.

Ready to get started?

Speak with a Financial Advisor today to get a financial health check and advice on how to better manage your finances.

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Budgeting For Car In Singapore

It is well known that purchasing a car in Singapore is an expensive process due to the high density of vehicles on our roads and supplementary fees that car owners must pay.

Owning a car may be more of a want than a necessity for many people as a result of this as well as the accessibility and cost of public transport.

Undoubtedly, some people might view owning a car as a necessity if their employment required them to travel frequently during the course of the day, if they had children, or if they had elderly parents who were unable to care for themselves.

Budgeting is essential if you are considering purchasing a car, regardless of whether having a car is a need or a want for your lifestyle.

Depending on the circumstances influencing your purchase—such as whether you have a family to transport or whether the newest car model is simply too alluring to pass up—how you plan and prioritise it will change. 

What factors determine a car's initial purchase price?

The government has taken steps over the years to regulate traffic congestion at acceptable levels due to the large number of vehicles in land-scarce Singapore.

Examples include additional charges and taxes as well as the legendary Certificate of Entitlement (COE), which must be obtained prior to purchasing a vehicle.

Certificate of Entitlement (COE)

The procedure for purchasing a brand-new car in Singapore requires you to bid for a COE. Twice a month, open bidding exercises are held.

The prices are then decided when the bidding process is complete based on the demand as well as the vehicle limit allotted by the Land Transport Authority (LTA).

You can register a vehicle in the appropriate category for a term of ten years after obtaining a COE through the bidding process.

The A and B COE categories are the ones that apply when purchasing a car for personal use.

While Category A and B COEs cannot be transferred and must be bid for a specific vehicle registration plate, Category E COEs are transferable for up to three months.

Given the high pricing for COE, it should come as no surprise that it accounts for a considerable portion of your total purchase price. At the time of writing, the COE2 (1st bidding of January 2023) is $80,000 for Category A cars, and $105,501 for Category B.

Open Market Value (OMV)

The OMV indicates the vehicle’s open market value (OMV), which is the cost of the car itself. It establishes the maximum loan amount you are qualified for and is also used to figure out some of the fees and charges assessed.

Fee for registration and additional registration (ARF)

As of this writing, the cost to register a new vehicle is $350 plus a $27.82 processing fee.

When you register a vehicle in Singapore, you must pay a tax called the ARF. It is determined using a portion of your car’s OMV.

GST (Goods & Services Tax) and excise duty

Imported products into Singapore are subject to an excise duty, in this case 20% of the OMV. On the OMV, there is an 8% GST fee. GST in Singapore will increase to 9% on January 1, 2024.

Vehicle Emissions Scheme (VES)

The VES seeks to persuade motorists to purchase more environmentally friendly vehicles. You can either receive a rebate or pay a premium based on a set of standard testing mechanics to measure the pollutants your car emits. This sum is put towards the ARF.

The entire cost of the vehicle less the authorised loan amount will be the sum you must pay as the initial downpayment.

In addition to the charges already mentioned, the dealer from whom you buy your car will add a markup to the price of the vehicle as part of its profit margin and to defray its own expenses. Depending on whether you’re buying a cheap or expensive car, this can often range between 10% and 50%.

Next, what?

It’s time to celebrate the achievement once you’ve determined how much you can afford to spend, which bank to borrow from, how you’re financing your purchase, and subsequently what car you can (afford to) buy given your current financial condition.

Is it true though?

This may only be the first in a long list of things to think about.

Owning a car entails ongoing expenses for its maintenance and operation.

Non-negotiable operating expenses

Some operating expenses cannot be negotiated. These are expenses that come along with owning an automobile.

Road tax must be paid on a regular basis, every six or twelve months, depending on the size of your car’s engine.

A legitimate driver’s insurance policy is legally required, and the annual premiums, which range from $700 to $2,000 depending on the insurer and the driver profile, vary.

To make sure your automobile is operating properly and is safe to drive, you should send it in for routine maintenance. Typically, this is done every six months or more frequently depending on mileage. Whether it is serviced by a dealership or a third-party workshop can affect the cost of the maintenance.

Don’t forget to factor in the cost of your monthly loan payment and interest if you borrowed money to buy your car.

Flexible operating expenses

Depending on your driving style and schedule, you may have more control over other operating expenses like parking fees and ERP. But over the past ten years, the prices have unfortunately been rising substantially.

Hidden operating expenses

Aside from all of the anticipated costs, using a car may also incur hidden expenses. These include possible fixes in the unfortunate case of an accident or if the car becomes scratched.

Yes, additional expenses could include a speeding fine, a parking ticket, or worse, depending on the intentionality or not of the offense.

Creating a car budget

As you can see, even if you have enough money on hand to cover the upfront expenditures of owning a car, you still need to think about your particular financial situation when determining whether you can responsibly handle the ongoing expenses.

Making time to perform a brief financial health check is a smart idea. Do you have money set away for emergencies?

If you are self-employed or have dependents, this should equal up to 12 months’ worth of living expenses. It should be at least 3 to 6 months’ worth. Before thinking about purchasing a car, you need also make sure that your fundamental insurance requirements are met.

Regarding your monthly cash flow, it’s crucial to make sure you can save at least 10% of your gross monthly salary each month while still having money for things like food, transportation, and bill payments.

Overall, owning a car is convenient, especially if you need to drive dependents around during the day or cross the island for work. Nevertheless, whether the benefits exceed the drawbacks overall depends on how much you value the car in connection to your personal preferences and routines.

In addition to the obvious drawbacks of owning a car, like the high initial and ongoing costs, there are also unspoken advantages to not driving. Not driving would surely save money given the speed of global warming.

Using a private rental or public transportation will also relieve you of the stress of probable traffic congestion and parking concerns, and may even allow you to rest and unwind while being driven around.

Cars are ultimately depreciating assets. If your lifestyle permits it, you can decide to divert the money you would normally spend on your automobile toward other future goals by investing it instead.

Ready to begin?

To get a financial health check and learn how to properly organize your funds, call a financial advisor now.

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How Important Is My Credit Score?

Are you aware that your credit payment history is “on the record” and has an impact on how lenders like banks view you as a borrower? This could be disconcerting to some. However, this is a reality in almost every country with a comprehensive financial system. So, instead of stressing out, learn how the system functions and remain in good standing to qualify for low-interest loans.

Credit Bureau Singapore (CBS) is the backbone of this system in Singapore; it compiles data from various sources (including but not limited to banks, finance companies, and credit card companies) to give lenders an accurate picture of a borrower’s credit risk.

Financial organizations will base their decision to lend to you and the interest rate they will charge you largely on the information provided by your credit profile.

In what ways does your conduct influence your credit score?

The “credit score” is CBS’s central metric; it provides lenders with an assessment of a borrower’s creditworthiness and indicates the likelihood of default.

The components of your credit score are as follows.

Number of credit applications and credit usage

Financial institutions may suspect over-extending if you have been taking on additional credit facilities (more debt) in a short period of time. Your grade might drop if they see this.

Overdue loan payments

Such behaviors are stigmatized as “delinquency” (another name for criminal behavior). Your credit score will take a hit if you have a history of paying bills or loans late.

Duration of your credit record

Lenders favor applicants with established credit histories over those who are just starting out. You should make it a point to pay your bills on time consistently to build a solid credit history.

Accessible credit

The number of credit lines you have available is what this means. Having too many credit cards and lines of credit can reduce your credit score.

What is your current credit score?

A credit score between 1,000 and 2,000 is calculated based on the aforementioned aspects of your credit behavior. Those who score below a thousand are considered to be at the biggest risk of payment default. They have an HH ranking in terms of safety. At the upper end of the scale, those with a score of 2,000 are considered to be the safest. And their credit rating would be as high as AA, the highest possible.

A borrower’s credit score will be considered by potential lenders. Your annual pay, tenure of employment, and any history of bankruptcy or litigation may all play a role. If you apply for a loan, your credit score could determine whether or not you qualify for the greatest interest rate the lender offers.

When determining your credit score, a rolling 12-month record of your account payments is used. If you make all of your payments on time, you can restore your payment history within a year.

However, enquiries made on your credit report by financial organizations will be kept for 2 years. There will be a three-year window where default records with a “negotiated” or “full settlement” status can be viewed. Records of default that are still pending, partially paid, or “sold off” will remain visible eternally.

When does debt become unmanageable?

This is why maintaining vigilance and command over your debt is crucial. If you owe more than $15,000 and are behind on payments, your lender might file for bankruptcy protection.

If you file for bankruptcy, your creditors will have the right to liquidate all of your assets (save for exempt ones like your HDB flat and CPF funds) to pay off your debts.

Working people are also required to pay into the “bankruptcy estate” on a regular basis. You can put this toward reducing your debts. The Insolvency and Public Trustees Office will report your bankruptcy to the credit bureaus for 5 years after your discharge.

Have you checked your credit score recently?

The vast majority of us have no idea where we are with creditors.

The online credit check only takes a few minutes and costs $8.00 plus GST at the current rate. The bank that handled your credit card application may give you a free copy of your credit report if you recently applied for a card.

Get going, already!

Get your finances checked up and learn how to better manage your future by contacting a Financial Advisor today.

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Are You In Your Twenties And Ready To Move Out?

Most of us who grew up in Asian houses don’t intend to leave our parents’ home until we get married and move into a BTO.

However, you may decide to take the plunge and move out because you are ready for some independence and no longer wish to be nagged about chores or because you are sick of your siblings taking up all of your closet space.

Unfortunately, your bank account will feel the pinch if you decide to leave home and fend for yourself at a younger age.

In a DBS article, they spoke with young adults in Singapore who made the leap to independence in their twenties and gleaned towards these following 5 financial tips:

Have three to six months' worth of emergency funds on hand

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Before you even think about packing your belongings, you should have at least a three-month emergency fund saved up.

A young adult who moved out on a whim for personal reasons told DBS, “I made the mistake of only taking into account the money needed for rent for the first month, and the deposit.”

A second young millennial agrees, saying, “You really understand that you need to have an emergency fund because you may have to deal with things like stamp duty or buy things you’ve never had to bother with before, like bedsheets and utensils.”

Even though you’re putting money aside specifically for your upcoming move, you should still aim to have at least three to six months’ worth of living expenses stashed away. A solid rule of thumb is to save at least 10% of your gross income per year.

After that, it’s crucial that you put aside some cash for unexpected expenses, such as your monthly rent. The expenses, such as purchasing new furnishings and filling up on kitchen supplies, could be reduced with the money you set up.

Maintain a debt servicing ratio that is no more than 35% of your income

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You’ve had three to five months’ worth of rent saved up, and now you’re trying to figure out where to live that won’t break the bank.

The Debt Servicing Ratio is a useful indicator of financial health because it prevents you from spending more than 35% of your monthly gross income on debt payments.

If you’re a millennial and you’ve just turned 19, moving out of your parents’ home may not be the most glamorous experience, so don’t overpay for an apartment just to show off.

The Debt Servicing Ratio is a useful tool for making sure you won’t run out of money while paying off your debts. It’s not a good idea to put all your money into an excessive rent payment if you’re already living paycheck to paycheck or have a mountain of debt.

Manage your money using a money tracking app

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Make a plan for your monthly and yearly spending and savings. Keep a monthly or quarterly record of your success in reaching your goals and sticking to your spending plan.

It’s useful to keep track of your expenditures and consolidate your accounts. You may both protect yourself from going into debt by recklessly overspending (a la “Bling Empire”) and increase your wealth by taking advantage of this opportunity to save money.

You can easily keep tabs on your spending by using an app to check the in and out of your money such as Household Account Book, Spendee, and etc.. In addition, you may see which of your spending categories is responsible for the largest outflow of funds. If your bubble tea habit is eating up your funds, you just cannot continue to deny the problem any longer.

Do your own cooking instead than going out to restaurants

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“Cooking my own food has helped me save quite a bit,” a millennial says.  While it may seem like common sense, preparing your own meals at home is a great way to save money, eat better, and have more say over what goes into your body than if you ate out.

Apply for a credit card that offers rewards for everyday purchases like food, Internet service, and utility bills.

Expenses like groceries and utilities are fixed costs that can’t be avoided every month, so any way to reduce their impact on your budget is welcome.

You should apply for a credit card that offers rebates on services like electricity, phone service, and internet service. When you’re living on your own, you’ll almost certainly be doing your own grocery shopping, so cashback on groceries is wonderful.

Develop a long-term source of supplemental income

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When you’re on your own and paying your own way, having a little extra cash on hand can be a lifesaver when the bills start piling up.

If you want your savings to increase, you need to diversify your income.  This will guarantee that your savings will increase at a quicker rate than your rent, and that your income will be much higher.

Get going, already!

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Talk to a financial advisor if you want an honest assessment of your current financial situation. The best thing is that it requires no effort on your behalf; we will calculate your cash flow and give you financial advice.

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Going Cashless Without Overspending Your Budget

A widespread misconception is that people who overspend usually buy a lot of expensive things. The truth is that most people who are in debt have spent too much money on everyday items like eating out, transportation, and vacations. They are like a frog in gently boiling water; they don’t realize they’re in the soup until it’s too late.

The fact that more options exist for making cashless payments hasn’t helped is significant especially with the growth of e-commerce. This includes mobile payments, e-wallets, debit and credit cards. With people remaining indoors and avoiding public transportation as a result of the Covid-19 outbreak, the use of cashless payment methods is set to increase.

Included in this category is the increasingly common “Buy Now, Pay Later” (BNPL) plan. In most cases, there are no costs involved, and you can pay it off over time with zero interest. You don’t need a credit card to participate in a BNPL program, unlike the conventional “Installment Payment Plan” that’s popular among credit card holders.

Customers, especially the younger demographic, have benefited from the convenience of cashless payment options. Installment plans can be helpful for some customers. This comes in handy when you need to make a large purchase, like a TV, but you also want to limit your spending or utilize less of your available credit that month.

The truth about overspending

Those who don’t have a firm grip on their finances, though, run the risk of overspending. Let’s pretend you opted to make installment payments on your purchases. It’s possible that making a product temporarily more “affordable” will lead to more frequent and larger purchases. Splitting up your payments makes it more difficult to keep tabs on how much money you’re actually spending, which can lead to poor money management. In addition, late payments result in fees that increase the total amount owed. Keep in mind that putting off paying off debt is still adding debt.

Average consumer expenditure growth rates (by type)

A recent survey by DBS titled “Are you losing the race to inflation” found that these three primary spending categories—transportation, shopping, and food—saw the greatest increases over the past few years. The biggest increases occurred in discretionary spending categories including shopping, going out, and vacationing (+56.7%), followed by transportation (+60.2%).

Customers may wish to think about the long-term effects on their finances as the latest inflationary pressures coincide with post-Covid pent-up demand.

In Singapore, overspending is far more common than losing money at the casino or making poor investments. People who tend to overspend rarely realize they have a problem until they are already drowning in debt. When that happens, your only options are bankruptcy or assistance from banks and Credit Counseling Singapore (CCS).

Their ability to get a loan to buy a house or a job may be hindered if they have a poor credit history. Stress, sadness, and physical health problems are just some of the many non-financial concerns that can arise as a result of carrying too much debt.

Some people develop a psychological dependence on money, which can lead to overspending. They use the money to deal with issues like stress and anxiety in their life. While some may go overboard while trying to make a good impression on coworkers and friends by footing the tab for an expensive supper.

In order to stay afloat in the face of growing inflation and the prices of necessities, it is crucial to reduce wasteful spending, adhere to responsible spending patterns, and stick to a monthly budget.

Here are 7 ways to avoid overspending when switching to a cashless lifestyle

1. Establish a sensible spending plan and savings goals

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The first step in any successful financial strategy is creating a reasonable budget that includes both savings and spending goals.

 A summary of your financial habits should include the following:

  • Your financial plans that keep you from going overboard
  • The cash flow comparison over the past three months
  • The top spending categories display allows you to keep tabs on your monthly spending by category

You can save hundreds, if not thousands, of dollars yearly by gaining insight into your spending habits. An extravagant meal out or a new designer purse can quickly drive up your monthly costs if you aren’t careful.

By having a firm grasp on your financial condition, you’ll be better equipped to make decisions about your money, both now and in the future, that will help you reach your financial goals.

2. Establish a savings plan and an emergency fund

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When your paycheck arrives, make it a habit to immediately put money aside for yourself. If possible, try putting away ten percent of your monthly salary. Separate your savings from your checking and use a higher-yielding account.

In addition, you should save up enough money for three to six months of living costs in case of an emergency. This will provide some breathing room in case you end up having to make some unanticipated expenses. It also helps you avoid the unfavorable scenario in which you have to sell off investments before they are ready in order to raise cash.

3. If you are frequently short on cash, do not finance a purchase with future revenue

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Not everyone can or should use the option to pay for products in installments. It makes more sense for some of you to wait and buy later on while others should start saving now.

Those who are frequently short on funds should avoid installment programs. If you just pay a small amount toward your balance each month, it can be easy to lose track of where your money is going. It might also make you more prone to making impulsive purchases. If you fall into this category, you should put off buying what you desire until you have the cash on hand to pay for it in full.

4. Affordability is a major factor

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Cashless payments and installment systems might be beneficial to consumers who are financially responsible and can pay off their installments within the time frames specified. This will be helpful for them in controlling their own finances.

These options allow young people who may not have considerable funds to buy things like laptops and PCs without resorting to credit cards.

Pricing should be reasonable. Make sure you can afford the purchase and the cost of repayment before doing it.

5. Don't give in to the allure of online shopping

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When shopping online during the 7.7, 9.9, or 1.1 sales periods, it might be tempting to get sucked in by seemingly irresistible deals and convince yourself that you need to make a purchase right away.

First things first: delete all of these tempting pictures from your social media accounts unless you’re actually looking for specific things. Doing so will help you control your spending habits and avoid wasteful impulse buys.

6. Put your credit cards to better use

Using a credit card doesn’t automatically mean taking on more debt. They also give you access to perks like price reductions, bonuses, and points for future purchases. Pick a credit card that fits your way of life so that you may get the most out of your spending.

Spending on one or two cards allows you to earn rewards and discounts more rapidly. Reducing your credit card’s spending limit is another option. If you find it difficult to keep your spending in check, you might ask your credit card company to lower your credit limit to, say, one month’s wages.

Make sure you pay off your credit card bills on time and in full to avoid paying hefty late fees and interest.

7. Do not let your debt to get out of hand

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Eliminate unnecessary payment options and consolidate due dates to gain command. Set alarms or calendar reminders, or use a service like automatic Giro payments, to ensure that your credit card payments are always made on time. In the same vein, these notifications will be useful for canceling an online service membership before its renewal is automatically processed.

Credit cards, BNPL, and personal loans are all forms of credit, and if you’re using them to pay for your monthly expenses and then have trouble paying them back, it’s time to take a serious look at your financial situation. If debt restructuring is something you need, look for assistance. You could benefit from CCS’s Debt Management Programme or the bank’s Debt Consolidation Plan.

Get going, already!

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Get in touch with a financial advisor immediately for an assessment of your current financial situation and advice on how to improve your long-term planning.