Give yourself a pat on the back if you’ve managed to save some money while everyone else is stuck at home with nowhere to go.
Don’t squander your circuit breaker savings. Discover how to be more financially responsible so that your future self will thank you!
You might be wondering why saving money is so crucial. Why should you worry about putting money aside each month if you have enough to cover all of your needs?
There are numerous reasons for starting or continuing to save money. People save for a variety of reasons, but having funds, in general, will assist you in the future, whether you’re avoiding hardship or pursuing your dreams. If you have a clear objective or purpose in mind for the money you’re saving, it’ll be easier to save.
Whether you’re a citizen or a foreign worker living here in Singapore, here are five things you can do with your circuit breaker savings. Start growing your money for the future by taking a step in the right direction.
Thinking of What to Do With Your Circuit-Breaker Savings Right Now? Consider These Tips!
With a pandemic or not, it’s important that you focus on things which you can control, one of which is how you handle your finances, and where you put your hard-earned savings on. Here’s our top 5 list of the best ways you can manage and use your savings, even (or especially now) in this pandemic:
Tip #1. Channel it towards debt repayment.
If you have some savings but are still dealing with high-interest, compounding debt, such as credit card debt, the first logical thing you should do, even if it doesn’t sound all that exciting, is to get rid of debt. Here are some debt-reduction strategies to get you back on track.
Remember, there is no such thing as a free loan — the longer you are in debt, the more money you will lose because compounding interest is a very slippery slope. The earlier you pay off your debt, the better.
Tip #2. Make your savings work harder.
You don’t have any debts that are weighing you down? Then, put your money to work for you by putting it in a high-yield savings account.
For the uninitiated, regular savings accounts at banks only offer 0.05 percent p.a. interest, so a wise move would be to transfer your funds to a high yield savings account to power up your emergency fund with minimal effort on your part.
Tip #3. Start investing.
Whether you like it or not, investing has replaced saving. Investing has a place in everyone’s life because it helps to steadily increase one’s wealth over time in order to meet long-term financial goals. To reap the benefits of compound interest, you must begin investing as soon as possible and, equally important, remain invested.
Not sure where to begin investing? You must first open a Central Depository (CDP) account and a brokerage account. The latter allows you to purchase and sell investment products.
Before investing your savings in investment products, do your research and do your homework — it is critical that you understand what you’re doing with your money, especially if you want to DIY and create your own portfolio.
When it comes to investing, consumers today have far more options than they did a decade ago. A robo-advisor, for example, can help automate your investments, whereas a regular savings plan operates on the premise of dollar-cost averaging, which eliminates the difficulty associated with ‘timing the market.’ Contrary to popular belief, you do not need a large sum of money to begin investing.
Tip #4. Fund a course or two.
Do you believe that you are never too old to learn? Congratulations! Lifelong learning is always a worthwhile practice, even if it isn’t always the simplest or most convenient.
If you have some spare cash, you should definitely consider using it to upskill by taking a course or two. Ensuring that your skills are up to date and relevant in a constantly changing job market will help to secure your job’s future.
Tip #5. Plan for retirement.
Even if you are in your twenties or early thirties, it is never too early to begin planning for retirement. If you don’t have any other pressing financial obligations, now might be a good time to get started.
As of now, new studies have revealed large retirement savings gaps in Singapore, which is why many people regret not saving sooner.
The ability to secure a steady stream of retirement income is dependent on the decisions we make today. For a start, look into retirement annuity plans. Depending on the type of plan you select, you could receive a monthly payment for a set number of years or for the rest of your life. In exchange, you would be required to pay a monthly or one-time premium for a set period of time during your working years.
Bonus Tip: Treat yourself to something nice.
While you’re busy making your money work for you, you’re free to treat yourself to something nice with a portion of your hard-earned savings. This could range from a relaxing spa treatment or a staycation to a meal or two at your favorite fine dining restaurant. You certainly deserve it!
Aside from taking steps to increase your wealth and improve your financial situation, make sure you’re adequately insured. After all, life is unpredictably unpredictable. Consider purchasing necessary medical expense insurance as well as term insurance to protect yourself and your loved ones in the event of disability, death, or a medical crisis.
The good and the bad times will keep on coming, but what you do in-between matters just as much as you what you want to achieve in the future. By taking into consideration the above-listed tips, you are several steps closer to realizing your financial goals, whether you plan to stay in Singapore or retire back in the Philippines. If you have additional tips you’d like to share, let us know by leaving a comment in the section below. We’d love to heard from you!