How many times have you looked back at certain actions or lack thereof and hoped you could have done things differently? What if you hadn’t ordered that extra side of fries with your burger? Should you not have skipped the gym to go out drinking with friends? What if you managed your finances better so you wouldn’t be so broke towards the end of the month?
We look at success stories around us and wish something similar would happen to us as well. But, why wait until it’s too late and add more things to our list of ‘what ifs’. By implementing certain steps today, we can ensure that we have better control and grasp of our finances tomorrow. Read on to find out what you should be doing today that will pay off in the future.
- Start with a budget
It doesn’t matter if you’re fresh out of college or been on the hamster wheel for a few years now. Savings is a must and the more you do it, the easier life gets. One of the simplest ways to jumpstart your savings is to simply spend less than you currently do. A good budget app can help you with this.
It doesn’t have to be New Year’s for you to make a resolution to start saving. The trick of creating a budget is making one which you can stick to. Unrealistic budgets normally result in us falling off the wagon and setting our efforts back to square one.
Creating a budget you can stick to also instils discipline and helps you be more responsible with your finances and spending.
- Ditch the old savings accounts for a high-interest savings account
One step towards ensuring you have enough savings is to transfer a portion of your paycheck into a savings account. There are many high-interest savings accounts and while these accounts won’t give you as high returns as investments, they still offer you more than the bare minimum.
Most of these accounts give you higher interest rates when you perform certain transactions such as credit card use or online bill payments using your account.
- Get insurance
Medical inflation has been on the rise and it is estimated that insurance premiums can rise by almost 85% by 2030. Regardless of how much you’ve saved, an emergency medical expense can dwindle your savings down to nothing. It is imperative that you get yourself an insurance policy, whether it is an Integrated Shield Plan with MediShield Life or a life/term insurance policy.
There are a multitude of policies out there which can help you protect your loved ones against any financial hardships should something unfortunate happen to you. Insurance policies come with additional riders and sometimes even an investment portion.
- Get a head-start on your children’s future
Whether you’re on your way to welcoming a new member to your family, having serious thoughts about doing so, or already have your little ones, it’s time to begin saving for their future. With inflation on a constant upwards trend, you need to account for a multitude of costs.
You might be saving for immediate costs such as diapers, clothing, or day care, which will then progress into education costs, higher education costs and a whole lot in between.
You should estimate these costs and set up an auto transfer facility and set aside a fixed sum of money on a monthly basis. This practice will not only allow you to build up savings to meet these expenses but also help you get adjusted to the lifestyle of having a child. Also consider starting an education endowment plan for your child.
- Diversify your investments
Savings can only get you so far in life. You need to invest your savings accordingly in order for it to grow. And ensure that you are choosing to invest in a diverse portfolio.
While equities can give you greater returns, they also come with greater fluctuations and risks. Consider low risk options such as fixed deposits, topping up your CPF, or online savings plans as ways to protect your savings while generating some returns.
It’s important to have a healthy mix of high and low risk investments because if one of your investment instruments fail, the others can go on to help minimise your losses. Remember, always protect your downside.
Get the help of an investment advisor if you are unsure of how to proceed with investments or what investments would be the right choice for you.
- Embrace retirement
We’re not asking you to go ahead and retire just yet. What we mean is if you’re worried about what your lifestyle could be after retirement, you should try and live off a retirement income. Cut down your expenses to the bare necessities.
If your monthly expenses amount to S$3,000 a month, cut it down to S$2,500. Not only can this help you decide how retirement life will be but will also allow you to save an additional S$6,000 a year.
If you can implement these simple steps in your life, we guarantee that you can have a more disciplined and financially stable future!
This post was contributed by BankBazaar Singapore team
Bankbazaar.sg is a leading online marketplace in Singapore that helps consumers compare and apply for a credit card, personal loan, home loan, car loan and insurance. Like BankBazaar Singapore on Facebook to discover tips, clever hacks, and deals to save and help you save and earn more money.
