Many people tend to put off planning their finances as it can be stressful and intimidating, especially if you do not know where to start. Nonetheless, managing your finances and budgeting your expenditure can help you avoid making bad decisions in the early years of your life. In this article, we provide some simple tips that you can follow to keep your finances healthy.
1. Spend within your means
An extravagant lifestyle may look good for your social media, but certainly does not help your wallet. If you find yourself broke at the end of every month, it’s time to review where your money has gone. Well, we’re not expecting you to cut out all your social gatherings and leisure activities. For starters, try reducing the times you go out to eat at fancy restaurants from twice a week to twice a month. Otherwise, pay for movies once a month and subscribe to a streaming service instead. You’ll realise how much you can save at the end of the month!
2. Pay your credit card bills on time
Using a credit card is both convenient and simple, but never forget to pay off the outstanding balances before your statement deadline or risk paying the interest rate!
3. Save before you spend
Make it a point to put aside at least 20 to 30 percent of your salary each month into a savings account before you spend any of that money. Your savings should always come before your expenditure. That way you know for sure that you will not be spending more than you should be.
Once you have set aside money to save, you have a portion of income that you can spend. Consider putting it into investment plans such as unit trusts and endowments. Keep in mind that the earlier you start investing your money, the more you’ll gain at the end of a stipulated time period as compared to someone who started later.
5. Understand your investments
Do not invest in things you do not understand. For example, not everyone is suitable for high risk investments such as stocks and forex trading, therefore it is advisable to stay clear from them. Alternatively, a financial advisor can help find a best investment option that is suitable for your risk appetite.
6. Tax deduction methods
Firstly, find out how much you are paying for taxes every year. There are many tax reliefs for both individuals and couples. One example will be deductions on donations, where you can claim tax deductions of up to three times when you donate to eligible charities.
7. Invest in yourself
Upgrading your personal skills can help you in the long term! There are now courses subsidised by the government that you can sign up for self-improvement. It doesn’t hurt to learn a new skill or improve on your current skills set. You never know, it can even help you earn passive income!
8. Know your net worth
Your net worth is basically the difference between what you owe and what you own. In other words, calculate the total amount of assets you have and deduct your liabilities. Imagine you plan to buy a house by 35 years old, and are unsure of how much money you actually need and how far you are from that goal. Knowing how much you have currently helps you plan your expenses and helps you meet your financial goals easier.
Nonetheless, there may be times where things do not go your way. Imagine having an unplanned child on the way, an urgent need for a house upgrade or a sudden change in decision to pursue further studies – these can deter you from meeting your financial goals and you may find yourself in need of money fast.
Licensed money lenders are here to provide you with easy and personalised loan plans to help you tide over the difficult period! Soon Seng credit even provides study, wedding and renovation loans catered to your needs. Of course, the total loan amount you can get from unsecured loans depends on your annual income and citizenship! It’s easy, just drop by our store or contact us at +65 6292 5693 to enquire about our rates and procedures! Alternatively, visit our website and leave a message for us to assist you further!