{"id":1171,"date":"2023-03-06T18:22:32","date_gmt":"2023-03-06T10:22:32","guid":{"rendered":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/?p=1171"},"modified":"2023-03-06T18:39:47","modified_gmt":"2023-03-06T10:39:47","slug":"here-are-the-top-five-reasons-why-you-should-prioritize-financial-planning-in-singapore","status":"publish","type":"post","link":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/here-are-the-top-five-reasons-why-you-should-prioritize-financial-planning-in-singapore\/","title":{"rendered":"Here Are The Top Five Reasons Why You Should Prioritize Financial Planning In Singapore<\/strong>"},"content":{"rendered":"\t\t
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Many people in Singapore are too busy with the day-to-day grind to deliberately carve out time for future-focused pursuits like financial planning.<\/span><\/p>

A survey conducted by St. James’s Place Financial Management Asia found that <\/span>41% of Singaporeans do not have a financial plan<\/span><\/a>.<\/span><\/p>

This is concerning data because long-term financial stability is directly linked to a good quality of life.<\/span><\/p>

In this article, we will discuss the advantages of financial planning and why it is crucial to begin early.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Why You Need a Financial Plan\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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As the old adage goes, “If you don’t plan, you plan to fail.”<\/span><\/p>

To get by financially, some people strive to save as much money as they can or shop around for the best discounts and offers.<\/span><\/p>

While these are beneficial to your financial well-being, these actions won’t get you where you want to go if you don’t have any specific plans or goals in mind.<\/span><\/p>

Here are several important reasons why financial planning is essential:<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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1) Keep up with the rapidly increasing cost of living<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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One of Singapore’s most recognizable characteristics is its astronomically high cost of living.<\/span><\/p>

Singapore was dubbed as the world’s most expensive city to live in<\/span><\/a> (mostly for foreigners) in the Economist Intelligence Unit\u2019s (EIU) Worldwide Cost of Living 2018 survey.<\/span><\/p>

Inflation, meanwhile, is expected to push up consumer prices. Over the course of 2022, <\/span>core inflation averaged 4.1%, a number that was significantly higher than the 0.9% seen in 2021<\/span><\/a>. When compared to the 2.3% predicted for 2021, last year’s headline inflation rate of 6.1% was clearly higher.<\/span><\/p>

If you leave your money in a savings account or other options with a negligible rate of return, its purchasing power will dwindle over time.<\/span><\/p>

To keep up with inflation, it is wise to invest any extra funds you have (depending on your comfort level with risk). You can invest in a wide variety of low-risk vehicles, such as fixed deposits, endowment insurance policies, and Singapore Savings Bonds (SSBs).<\/span><\/p>

These less risky investments may be a smart place to begin if you’d like to play it safe, even if their potential returns don’t compare to those of the stock market. You should at least attempt to have the rates be high enough to counteract inflation.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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2) Maintain a sound state of your own financial affairs<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The term “financial health” describes how well off you are economically.<\/span><\/p>

To get a full picture of your financial situation, you need to track all\u00a0 your income and expenses.<\/span><\/p>

According to the SmartWealth Survey, <\/span>52% of Sinagporeans have no idea how much money they are spending each month.<\/span><\/a><\/p>

How can you cut costs and make improvements if you don’t know where your money is going?<\/span><\/p>

The vast majority of people who keep track of their expenditures in some way tend not to go over their budgets.<\/span><\/p>

A growing income stream, disciplined spending, a growing cash reserve ready for deployment, and robust investment returns are all signs of financial health.<\/span><\/p>

The 50\/30\/20 rule can be used as a good budgeting guideline. This guide advocates spending half of your disposable money on necessities, 30% percent on luxuries, and 20 % on savings and investments.<\/span><\/p>

While this budgeting guideline is a good starting point, it should be modified based on your unique circumstances and financial goals.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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3) Be financially ready for unexpected events<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In case of an unexpected event, you will be better equipped to handle it if you have done some financial preparation ahead of time.<\/span><\/p>

Accidents, illness, or losing your job are just a few examples of the kinds of unforeseen events that might cause your regular spending to spike or your income to plummet.<\/span><\/p>

Because of this, having sufficient insurance coverage is essential.<\/span><\/p>

Although MediShield Life may offer some coverage, it may be inadequate. For instance, it largely covers government B2 wards and below and does not cover pre- and post-hospitalisation fees. That’s why 66 percent of Singaporeans and permanent residents have a full Integrated Shield Plan (IP).<\/span><\/p>

You can use your CPF MediSave balance to pay up to $600 in annual premiums to complement your CareShield Life insurance through an insurance company. If you become moderately or severely disabled, you can receive increased monthly payments.<\/span><\/p>

You may lose your ability to earn money for a significant amount of time if you become very ill and are thereafter unable to work. Also, the prevalence of diseases like cancer may be higher than you imagine.<\/span><\/p>

What’s more, what would your loved ones do if you suddenly pass away or become permanently disabled?<\/span><\/p>

Therefore, it is strongly suggested that you get yourself life insurance (typically term insurance or whole life insurance). As a result, you will be able to replace prospective income losses in the event of misfortune.<\/span><\/p>

Preparing an emergency fund is another form of protection you may give yourself.<\/span><\/p>

It is recommended that you put away at least six to twelve months’ worth of living costs in an emergency fund. Keep your financial head above water through times of transition, such a layoff or other sudden decrease in income, with the help of an emergency fund.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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4) Reach your long-term financial goals<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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There are a number of major life events that call for substantial sums of money. Such examples are your retirement, your children’s college funds, your down payment on a house, and your wedding.<\/span><\/p>

The average cost of a wedding, as an example, is between $30,000 and $50,000<\/span><\/a>.<\/span><\/p>

The cost of housing is rising as well. During the year 2000, private property values have increased by 64%.<\/span><\/p>

On average, <\/span>a college fee will cost you around $22,500 to $53,200 over four years at a university<\/span><\/a>.<\/span><\/p>

This is in addition to the money you’ll have to spend for your kids’ education from kindergarten through two-year college or polytechnic.<\/span><\/p>

Having a comfortable retirement nest egg obviously takes the lion’s share of one’s financial resources. Hence, you should begin saving for your retirement as soon as possible. A less attractive retirement lifestyle may result from failing to do so.<\/span><\/p>

It is not the intent of these numbers to induce fear. Instead, they should serve as a sobering reminder of the need for a good financial plan if one is to realize these aspirations in the future.<\/span><\/p>

Making your money work for you by investing at least some of it can help you reach your goals more quickly. Over time, compound interest can earn you substantial returns, helping you keep up with inflation and save more for big-ticket items.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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5) Enhance your own and your loved ones' standard of living<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Attaining financial security and retiring early are two goals shared by many.<\/span><\/p>

If you set your mind to it, you can accomplish these goals. Yet, you can’t get there without some forethought and budgetary restraint.<\/span><\/p>

Aside from independence, it’s natural to want a comfortable retirement that allows you to take trips with your loved ones, indulge in pursuits you truly value, and leave a lasting legacy for your offspring.<\/span><\/p>

With careful financial planning, you can satisfy both long-term needs and more immediate wants. You and your family can improve your standard of living by allocating sufficient funds for expenditures.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Final Thoughts<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Planning one’s finances is a disciplined and planned process.<\/span><\/p>

To do so, you must take a sober look at your current financial condition and your long-term objectives.<\/span><\/p>

As your income and spending patterns will vary over time as your responsibilities and priorities shift, it is important to revisit your financial plans annually to make sure they are still appropriate.<\/span><\/p>

Doing your own financial planning is certainly doable, but it might require a significant amount of time and research that could be better spent elsewhere, like on your work or family.<\/span><\/p>

With a good financial advisor, you may lighten your load considerably. In addition, he or she will be able to advise you on the most suitable savings, insurance, and investment options in light of the ever-evolving market for such products.<\/span><\/p>

If it’s been a while since you last looked at your finances, it’s time to do some serious planning.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Many people in Singapore are too busy with the day-to-day grind to deliberately carve out time for future-focused pursuits like financial planning. A survey conducted by St. James’s Place Financial Management Asia found that 41% of Singaporeans do not have a financial plan. This is concerning data because long-term financial stability is directly linked to […]<\/p>\n","protected":false},"author":1,"featured_media":1172,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[29],"tags":[32],"class_list":["post-1171","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-matters","tag-financial-matters"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-content\/uploads\/2023\/02\/1-4.png?fit=1507%2C969&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/posts\/1171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/comments?post=1171"}],"version-history":[{"count":5,"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/posts\/1171\/revisions"}],"predecessor-version":[{"id":1200,"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/posts\/1171\/revisions\/1200"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/media\/1172"}],"wp:attachment":[{"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/media?parent=1171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/categories?post=1171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sg-financialadvice.com\/UnderstandingCareshieldLife\/wp-json\/wp\/v2\/tags?post=1171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}