Category Archives: Financial Planning

Worst money habits millennials tend to have

Source: Asiaone, 5 Feb 2015

Source: Asiaone, 5 Feb 2015

As more and more millennials are graduating with a degree, they are able to earn good income after working for two to three years. However, this sudden burst of income can have a negative impact if they do not plan their expenses properly. The bad habits formed, if not changed, will definitely be a problem to them in future.

In Singapore, the percentage of credit cardholders with incurred debts beyond their annual income is about 3 per cent. Life-changing events such as marriage, financial downturn or medical problems can also cause a huge change in your financial stability. Acquiring good money habits will protect you from ‘financial storm’. One should be prepared to tackle money issues at any point in time, regardless how comfortable we are in our finances.

The 13 bad money habits that young people have include splurging on a car, not saving, taking up unnecessary loans, being a spendthrift, living on credit, not keeping track of their expenses, failing to invest, investing too aggressively, expecting their parents to save the day, not understanding finance, copying their friends’ spending habits, lending money to others and not having insurance.

Do you have the 13 bad money habits too? Are you savvy in budgeting – are you aware how many percent of your income goes to expenses and how many percent do you save? Which part of your expenses account for the highest percentage in your expenditure? Do you know any ways to save more money for your future or do you have any expenses which you can cut down more?

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Public Transport Fares to Rise by 1 to 10 Cents

Public Transport Fares to Rise by 1 to 10 Cents

Public Transport Fares to Rise by 1 to 10 Cents

Source: TODAY 22 January 2015

With effect from 5 April 2015, except for senior citizens and monthly concession pass holders, all commuters will be affected by a rise in fare price by 2.8%. Similarly, government-funded concession schemes for lower-wage workers and people with disabilities are also excluded from the price hike.

Those who frequently take public transport during off-peak hours will also benefit from the new off-peak travel passes for adults, disabled people and the elderly. The Public Transport Council (PTC) is looking into ways to make fares affordable so that the low-income families have the least impact.

The fare-review exercise will begin to take into account of the previous year’s indices and a similar method will also be used to determine the fares for next year. The PTC maintained a good balance between affordable fares and sustaining reliability in the public-transport system.

So with the increase of public transport fares, how is this going to affect you? Are you going to increase your income with more overtime or with another source of income or are you going to cut your expenses? What will you do?

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Are You A Saver or Spender?

Looking at the table below, can you tell the difference between the two scenarios and understand its implication?

Difference between these 2 scenarios?

What is the difference between these 2 Scenarios?

This table explains how we spend our income. In Scenario A, we spend our income and save the balance. Therefore, our savings may fluctuate every month depending on our expenses for that month. In the Scenario B, we set aside a sum of money for our savings first, and then we spend the balance. If we have any balance left, our savings will be more for this month. This is a form of discipline savings for ourselves so that we can accumulate more in the future.

So question you have to ask yourself is, “Am I a Saver or a Spender? Do I have a consistent sum of money save for the future or do I always complain that money is not enough for me?”

If your answer is that you are a saver, congratulations to you as you started your foundation for wealth management correctly and you are on the right track to accumulate more wealth in the future.

If your answer is that you are a spender, then you have to change your lifestyle now and reduce your expenses. First and foremost, do you know where did you spend your money? Did you keep track of your bills and receipts? Do you have a notebook to record down your expenses every day and categorize them properly so that you can identify where you spend the most on?

Once you identify the category, think of ways to save money, where you can reduce your expenses in the category. Some of the common money savings tips will be, instead of eating at restaurants every weekend, how about changing it to once a fortnight or once a month? Instead taking cabs and travel every day, how about taking public buses and trains? Instead of buying a luxury item in every boutique sales, how about buying some other brands instead? Instead of changing mobile phone every time there is a new launch, how about changing it only when it is faulty?

Reducing your expenses can be quite hard at first and some of you may find it uncomfortable to change as you are so used to the lifestyle you have now. However, if you see the benefits of having more money in your bank for emergency purposes or for your future big purchases such as a car or a house, then you find that it is worth to pay the price now and enjoy the fruit later. As many industry specialists have advised, we should have at least 6 months of our income as our emergency funds in our bank savings account.

So do you have at least 6 months of your income in the bank now? If not, start savings quickly now and build your foundation strong so that you can enjoy in the future without having any worries that money is not enough.

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Importance of Financial Planning

Recent survey showed that many people in Singapore are under-insured and do not have enough for their retirement. If this is the case, why is it that people choose to do nothing and do not enhance their existing coverage or enhance their wealth for retirement? Do you also fall under this category too? What is stopping you from enhancing your portfolio?

Is it that you find it too expensive to buy another policy now because of your current age? Do you find that financial planning is too comprehensive and technical for you to understand? Or you do not trust the financial planner as they are too aggressive and just interested to close the sale and earn the commission out of you?

That is my purpose of creating this website – to help you manage your wealth in terms of wealth protection, wealth accumulation and wealth distribution,  to give you a good understanding of what financial planning is about and how you can plan your personal finance to get sufficient coverage for yourself should any unforeseen circumstances happen. Most importantly, to have your retirement plan in place so that you can have a comfortable retirement.

If you are married with children, I will also discuss topics such as planning for your children’s tertiary education and their life insurance.

What is the opportunity cost if you do not take any action now? What is the implication on you and your family without proper financial planning?

Check this website regularly to keep yourself updated with the latest posts.

“If you fail to plan, you plan to fail” by Benjamin Franklin

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