If you’re anticipating your first paycheck and the possibilities it will open up for you, we have this advice: go forth and multiply. Learn ways to grow your salary!
Here are six recommendations to get you started increasing your salary if you don’t know where to begin.
#1: Know where your money is going when you're an adult
Everyone hates becoming an adult, yet it is a necessary aspect of development. Are you concerned that you are not maximizing your pay? Start by saving before you spend it. As soon as your paycheck is sent into your bank account, try to set aside at least 10% of it.
Regardless of how little your spending are, you should still create budgets and keep track of them. One suggestion is to make a bigger monthly budget than you did when you were in school. That’s because your expenses when you’re “adulting” are probably going to be more than when you were a student, such as a new phone plan, extra transportation costs (due to overtime and cab fees), lunch and dinner out with your new coworkers, and even renting your own house.
#2: Upgrade your savings account
You’re bound to transact or even invest more if you go farther into the “adulting” realm; you probably won’t have a choice.
But when it comes to the interest rates you can earn, you might have a choice. For instance, the interest on the account you had as a child is probably very little.
Growing your salary through a high-interest bank account in Singapore is a good financial strategy. Singapore is known for its stable and well-regulated banking sector, making it a safe place to park your savings and earn interest.
Here are some steps to consider:
Research Banks: Start by researching the various banks in Singapore that offer high-interest savings accounts. Look for banks that consistently offer competitive interest rates and have a strong reputation for customer service.
Compare Interest Rates: Compare the interest rates offered by different banks. Keep in mind that interest rates can fluctuate, so it’s essential to choose a bank that consistently offers competitive rates. Consider both regular savings accounts and fixed deposit accounts, as fixed deposits typically offer higher interest rates.
Minimum Balance Requirements: Some high-interest savings accounts may require you to maintain a minimum balance to earn the advertised interest rate. Ensure that you can comfortably meet these requirements without affecting your day-to-day finances.
Remember that while a high-interest savings account is a secure way to grow your savings, the returns may not be as high as riskier investments. It’s essential to strike a balance between safety and growth based on your financial goals and risk tolerance. Consulting with a financial advisor in Singapore can also provide personalized guidance on optimizing your salary growth and investments.
#4: Maintain your security
You’ve probably heard that starting an insurance coverage at any time is a good idea. That appears to be accurate.
Even though you may still be in your 20s, now is the ideal moment to select between life and term insurance. That’s because when you’re younger and healthier, your premiums are lower. If you choose an endowment policy, you will benefit from compound interest and move closer to your aspirations of getting married and buying a home.
#5 Invest in Stocks and Investments
Consider investing your savings in stocks, bonds, or other investment vehicles. Over time, well-managed investments can provide passive income and capital appreciation, contributing to your overall wealth.
Investing in stocks and other investment vehicles is a viable way to grow your wealth over time.
Here are some common types of investments to consider in Singapore:
Stocks: Investing in individual stocks or exchange-traded funds (ETFs) allows you to buy shares of publicly traded companies on the Singapore Exchange (SGX). Stocks can offer capital appreciation and potential dividends. Conduct thorough research before selecting specific stocks.
Bonds: Bonds are debt securities issued by governments or corporations. Singapore Savings Bonds (SSBs), government bonds, and corporate bonds are available options. Bonds provide regular interest payments and are generally considered lower risk than stocks.
Real Estate: Singapore has a vibrant real estate market. You can invest in physical properties such as residential or commercial real estate. Alternatively, consider Real Estate Investment Trusts (REITs), which provide exposure to real estate without direct property ownership.
Mutual Funds and Unit Trusts: These investment funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets. They are managed by professional fund managers and offer diversification.
Exchange-Traded Funds (ETFs): ETFs are investment funds that trade on stock exchanges and aim to track the performance of an index, commodity, or basket of assets. They provide diversification and are typically more liquid than mutual funds.
Government Investment Bonds: The Singapore government occasionally issues retail bonds to fund infrastructure projects. These bonds may offer attractive interest rates and can be purchased by individual investors.
Checkout our recent post on 4 affordable investments you can start with.
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.