Prioritizing savings is a vital step to ensure financial stability. But there are times when people choose to meet their needs at hand and put off saving for the future. However, spending smartly and saving regularly is the best way to manage finances. By savings, it does not mean that you have to cut on weekend dinner outings or not give in to the retail therapy once in a while. You just need to be smart and make it a part of your lifestyle.
Singaporeans are known as one of the world’s biggest savers. In 2017, the World Bank data stated that Singapore was at the top, saving 46% of its GDP ahead of China’s 45%. But that data not mean that the average Singaporean household saves 46% of its income as the GDP is not the same as total income accruing to households in Singapore. The 2012-2013 household expenditure survey by Department of Statistics states that the average Singapore household spent S$4,720 on goods and services per month against income of S$10,500 which is an exceptionally high savings rate of 55% including employer CPF contributions.
To save more, here are a few tips on how to get smart with your savings:
- Set saving goals
People usually have poor saving habits. To improve this behavior you should set specific, attainable goals and reward yourself on reaching each goal to help you stay motivated. One can also automate his/her savings by depositing into savings account the day salary is received.
- Get the best deal
Negotiation plays a significant role in saving money and getting the best deal. One must not hesitate to ask for complimentary services or products because as a consumer, you have the right to demand a discount on the maximum retail price printed on products.
- Credit card debt
Avoid shopping on impulse. If you still want to shop and your financial position cannot support then, you should avoid using plastic cards. Credit cards are not to sustain a lifestyle you cannot afford, they are actually a means to provide convenience. Subscribe for SMS or email alerts for your transactions. Keep a list of your credit card toll-free numbers in case your card is lost or stolen.
- Eliminate debts
Debt payments have a high-interest rate whereas savings have a low-interest rate. Establishing a saving habit will help in eliminating your debts. Doing so will provide you the money for emergencies and you will not be pushed into unnecessary debt. This way, you will be ready when some investment opportunities arise.
- Have an emergency fund
In case a job loss or huge expense pops up, an emergency fund is a savior in such cases. One must also build a fund for smaller irregular expenses such as medical prescription costs or appliance repairs. Quick payday loans can work as an option in an emergency as a payday loan provider provides the loan online instantly at short notice by submitting a few information thus, saving time and money.
- Get a plan to monitor your progress
The final step is to monitor your progress toward your budget targets on a regular basis. If one’s original budget assumptions were unreal or if some expense has changed in his/her household’s financial list, accordingly plan and execute your budget.
Financial planning may become better with age and experience. But for those in their 20s, it is the time when you explore different fields, decide how you want your career to unfold, start earning, and learn how to manage finances. Developing the habit of spending money along with prudent investing and judicious saving can help you in the long run personally and professionally.