For the majority of us, the COVID-19 situation is a major inconvenience, largely because of the CB measures. However, considering the many uncertainties ahead, it is also important for us to pay a little more attention to our finances during this period.
For those whose income has been affected especially, it’s time to take a step back and look at ways to improve your finances. So here are some practical tips to help you get started amid the current global crisis.
Think of the CB as a pause button for you to revisit how you use your money. The best way to start is to list down all your estimated monthly expenses.
Look at how much you’re spending in categories like food, clothing, travel, entertainment, monthly subscriptions, loan repayments, or even the allowance you give your parents. And yes, while this may seem like what an insurance agent would tell you to do, it’s a handy way to break down your expenses and it gives you a better understanding of where you can cut back on.
At the same time, make sure that you have a ‘rainy day fund’ that you can access easily. Most financial planners would advise to have at least 6 to 12 months worth of your salary in your emergency fund. This is particularly apt in the current situation, as some of us may have lost our source of income because of COVID-19. Having this pool of funds ensures that we have enough money to survive through such situations.
Once you’ve detailed your monthly expenditures, you will find yourself with several fixed expenses which may take a significant chunk off of your income. These include any loans and insurance policies you may have.
To help free up your cash flow, the Monetary Authority of Singapore (MAS) has launched measures that allows you to defer debt obligations. You can apply to defer premium payments on your life and health insurance for up to six months. If you are paying off your housing loans, you can also apply to defer your mortgage loans until the end of the year.
Many banks have also rolled out initiatives to further help their customers tide through this challenging period. For example, CIMB Singapore is offering deferments on its renovation and education loans, and OCBC is automatically reducing the minimum payments for its credit card to 1% of their statement balance.
If you are still struggling to juggle your daily expenses, find out if you qualify for any government relief and assistance here.
You may also want to consider a personal loan just to tide you through this period. There are several options available in the market, each with its range of benefits. For example, Standard Chartered offers a CashOne Personal Loan starting from an interest rate of 3.88% (EIR 7.67% p.a), and you also get a 50% off your first month’s instalment amount. (Terms and conditions apply.)
Besides keeping tabs on your spending, review your health and medical policies. This is prime time to ensure that you are sufficiently protected as you wouldn’t want your savings wiped out from a medical bill.
Know what you are covered for. This includes the extended protection you may be getting from your insurers. Many insurance providers and banks are offering complimentary protection plans for their customers. Be aware of these benefits as it will be a tremendous help should you contract the virus.
SingSaver has very succinctly compiled the list of extended and complimentary coverage from all the insurance companies in Singapore, which you can find here.
This CB period is the best time for accumulating your savings. Staying home would mean that you are already going to be saving the money you would have spent on travel or night outs.
Many brands are also running attractive discounts and promotions, but remember to spend wisely. Do you really need a new pair of sneakers during this #StayHome period or do you need groceries?
Chances are, food is the main aspect that you will be spending on this period, followed by other household necessities like toilet paper. All the supermarket chains in Singapore and smaller online grocers offer free delivery with a minimum order.
There’s even a comparison of the different online grocers available in Singapore, which will satisfy the Singaporean in you to find the ‘cheapest and good-est’ deals for your necessities.
Take this chance to bank on the best deals, bulk order your groceries online and have them delivered for free, and start saving on food by prepping your own meals.
Here is a list of over 30 budget-friendly meal prep recipes you can get started on.
Alternatively, if you need to order food, you can find a list of ongoing food delivery promos here!
Being forced to stay home frees up extra pockets of time, which is a golden opportunity to pursue all those things you have been wanting to do but could never find the time to.
Work on your fitness goals: Gyms are closed and fitness classes are all halted, but there is now an influx of online fitness classes which you can follow at home. This also means that you can save on gym membership or the usual paid fitness classes.
For example, Nike and Adidas have launched free fitness videos which you can follow at home. Gyms like Evolve MMA have also been holding live classes on their Facebook and Youtube channel.
Here’s more online exercise classes you can try!
Or perhaps you have always wanted to learn Korean, or improve on your photography skills, there’s no better time to pursue all those goals.
Pick up a new language with Duolingo, or take advantage of free online courses to learn a new skill. If you haven’t got around to using your SkillsFuture credits (which is $500 sitting there, waiting for you), take this chance to sign up for a course here.
Being at home 24/7 can get really stifling and dreary, but as with free online classes, there are many ways to keep yourself entertained (and sane).
Stay connected with your friends and family with Zoom, or play games together with social apps like Houseparty and Psych!. You can even get the KTV experience with this Chinese karaoke app, <a href=" Party.
For existing Netflix subscribers, there’s a Netflix Party Chrome extension that allows you to watch Netflix remotely with friends. The tool synchronises video playback and there’s even a chat bar for you to chat as you watch!
You can even <a href=" the Great Barrier Reef with David Attenborough if you want. There’s really an abundance of entertainment resources available online, and the best part is, all of these are completely free.
To help those who may need immediate help with their cash flow, SingSaver is also running an exclusive promotion with Standard Chartered regarding their CashOne Personal Loan. Each approved applicant will stand a chance to win a #cashcushion of up to S$10,000!
Simply apply for the Standard Chartered CashOne Personal Loan for a chance to win the cash cushion. The campaign runs from 6 Apr till 30 Jun and 3 winners will be picked every month.
Find out more about how you can win yourself a #cashcushion here!
(This article was written in collaboration with SingSaver.)
(Header Image Credit: Sam Dan Truong on Unsplash)
What is $200 to you?
To a wealthy person, it is probably loose change. On the other end of the spectrum, the same amount could very likely feed an entire family for a month.
Money has always been a concern in our lives. After all, it is the only tangible currency that dictates our lifestyle. That is, unless you lead an ascetic life.
For average citizens like you and me, the ever increasing costs of living in Singapore continues to be a worry and that little voice nagging at the back of our minds every time we spend.
A lot of us also grapple with the fear of not being able to ‘afford our life' when we grow old, frail, and sickly. But when I look at how our mothers (and fathers) have saved up very decent (five-figure) sums of money not just for themselves but also for us, their children, it makes me wonder: How the heck did they do it?
Considering the circumstances in which our parents grew up made me genuinely wonder why we struggle with finances now. With the generally lower income they would have drawn compared to our salaries today, it should not be too difficult for us to achieve the same kind of financial stability and still lead a fairly comfortable lifestyle, right?
Maybe not.
Awhile back, I penned my thoughts on my future in Singapore, where I shared the fears I have and the uncertainty of whether I’d be able to afford (a graceful) retirement in Singapore. To which I believe is the same concern felt by many Singaporeans.
Over the last couple of months however, life milestones like marriage and home ownership has made me realise how clueless I had been with money.
Yes, of course. There are many factors to consider. Our policies, the ten-fold increase in housing prices, and inflation are all changes that has made it more challenging for us. But these are all areas that we have no control over, and are complex topics to debate over as itself.
On a more personal level, I have come to realise how little we know about money and affordability in our day-to-day lives.
“What does it mean to live within our means?”
It's a question that is so important, yet so hard to answer.
A lot of us spend based on our whim and fancy, not caring too much about whether we can afford it or not. Or rather, we spend based on a very vague assessment of whether we will be able to afford our meals (and necessities) for the rest of the month without going ‘broke’.
The problem with this is that when you add personal desire into the equation, you can bid logic and pragmatism goodbye.
Take for instance how we will usually avoid spending more than $20 on a meal, but we wouldn’t hesitate to spend $200 on a ticket to watch our favourite artiste live in concert.
It's exactly what 29-year-old Zafirah would do. $200 can be used to finance two to three weeks worth of her expenses, but like many Singaporeans, her spending is also very sporadic. As another millennial I spoke to explained, the amount he spends “is totally proportionate to how much of a life I have that week.”
While Zafirah avoids spending too much on lunches, she is willing to splurge on special occasions like birthdays and anniversaries, as well as concerts of her favourite artistes and on holidays.
“Beyond the price I look more at whether it's value-for-money. Even if I splurge or 'go big', I try to find vouchers and promos to reduce my spending. Like right now, I'm eyeing the Dyson Airwrap but I just can't justify spending $600 on a hairdryer.”
All of us attach a different value to the same amount of money, and even on the same amount of money, we perceive value differently based on context.
Take for instance a literal comparison of apple to apple. $5 apples Vs. $55 premium apples. The $50 difference is a lot for fruits. However, $50 is not that big of a deal if you’re comparing long-haul flight tickets, and nothing when you’re looking at housing prices.
There are also those who end up being in debt for years after spending a bomb on achieving their dreams, like a dream wedding—a once in a lifetime affair. A 2016 TNP article shared the struggles faced by a couple who spent $110K on their big day, which left them with a four-year debt.
Is the $110k considered affordable or not then?
Because the value of money is so intangible, it is very hard not to have a biased perception of value, which makes it very hard to discern whether one can really afford something or not. Personal preference, the context of which we're spending, and our earning power all affects our perception of value.
With plenty of payment options and interest-free instalment plans easily available today, the line between affordable and not over-budget isn't clear anymore. We’d all like to think that we are sensible enough to know what we can and cannot afford. But we probably don’t.
We spend on our whim and fancy because there has never been immediate pressure for us to save. For the majority of us, it is a fact that we have lived a sheltered life and never faced a real fear of not having enough to get through another day.
Financial literacy isn’t natural to us either. The only thing we’ve been taught is to save for a rainy day, period. As we grow older, we just grasp for information in the dark, trying to find out about the best savings account and plans, and financial planning tips through Google, friends, financial advisors, and through trial and error.
In our daily lives, we often blurt out the occasional “I can’t afford this.” But I’d make the bold claim that one will only truly know what one can or cannot afford when faced with either having to pay off student loans independently, or when one is getting married and buying a house.
From young, my mother has always stressed this to me: Every dollar counts. When I started working however, I began to lax on that principle. The liberating freedom of seeing 4-figure amounts deposited into my bank account every month gave me the false impression that I can afford luxuries.
There’s always that tiny voice at the back of my head that continues to make me feel guilty for splurging, but on most occasions, the lure of gratification is way too enticing, especially when it comes to food. Not forgetting the FOMO on trends: the seasonal McDonald's burgers, the carnivals, the countless new bubble tea brands in Singapore, and basically anything that's on everyone's Instagram at any certain period of time.
The scariest part is when everything is digital, because it is way too easy to just swipe the card and worry about the money later.
Honestly, it is only after having to pay for a wedding banquet and a house that made me truly realise how careless I have been with my money. And this is probably the same for many of us and going to be the same for many more of us.
It is when you put things into perspective, like how the bill of a wedding banquet alone can be 20 to 30 months of your take-home pay, when you realise how f**ked you are in terms of your finances.
Until then, enjoy all the little luxuries while it lasts.
This is not a sponsored post.
Also read: Are Young Couples Jumping Onto The BTO Bandwagon Too Soon?.
(Header Image Credit: Fabian Blank on Unsplash)
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