08 December 2021
Ever-rising living expenses coupled with wage stagnation for the past decades are probably the key reasons why saving money has been increasingly difficult for many people. Saving money may seem like a pipe dream for many people. However, this may not be a very difficult task to achieve if you follow these 3 simple ways.
Pay off your credit card bills in full
Always pay off your credit card bills in full whenever possible. With credit card interest rates as high as 28% per annum or more in Singapore, it is easy to understand that unless you pay up your bills in full and on time, the amount of interest that you would have incurred can easily undermine your savings goal. Seemingly insignificant at first glance, the extra interest that you are paying could quickly accumulate to a hefty amount as you would also be paying interest on the interest that you just owed to the bank. If you are not careful in managing your finances, your credit card debt could piled up rather quickly. Unknowingly, you may find yourself in a very difficult situation.
If there is a tendency for you to consistently overspend beyond your ability to pay, then the best way out is to cancel your credit card.
Plan your budget
Budget is a key component in managing one’s finances. It helps you prioritize your expenditure and strike a balance between saving and spending money. Allocate budget for your expenses such as mortgage loan, Insurance and car loan. Ensure that they do not exceed your total income. In this way, you could build a positive cashflow.
It is recommended that you do a budgeting at least once a year. A quarterly review will be even better. If you still spend more than you earn, it is time to cut back on expenses that are less important or unnecessary.
Open a savings account
This may seem like an obvious task to do, but what we really meant here is to open a savings account for the purpose of solely saving money. Have you ever tried saving money using the same bank account which you also use to pay your daily expenses, bills, credit cards, and mortgage? Did it work well for you? The answer would likely be no for most people. Separating your savings into a standalone account will make your accounting clearer and also easier for you to work towards achieving your target goal.
Saving money can be simple and fun. Begin your savings journey today and be amazed at how easy it is to build your own money pot.