Stop making costly financial errors
Given that financial literacy is a topic that has only gained attention in the last 10 years, most Singaporeans who are above 30 years old may find themselves slightly lacking in the planning of their personal finance. While obviously there are those who take the time to read up to ensure they are on the right path, there are many others who sometimes rely on hearsay in managing their money. Here at Enjoycompare, we cover three top financial errors to avoid as a Singaporean:
Getting into unnecessary debt
Late last year, a survey by job-portal Jobstreet.com saw about 45 percent of the executives they interviewed claim that they were tied down with various debts originating from car, credit card or property. If you are one of those who delay your credit card payments or roll over your debt each month, you should try to spend some time and thought on how you can re-structure your spending habits.
You may not see the immediate impact but having debts means you risk your credit reliability. This will ultimately affect how a bank assess you as a potential credit risk should you need to apply for a loan in future. To find out more about how you can prevent falling into the debt-trap, read this article.
Not saving enough/at all
Any adept financial advisor will tell you, you need to pay yourself first! What they mean is to remember to pay yourself first by saving, not spending.
Many of us forget this, especially so if we have just started in the work force. We may need to repay our study loans, go on a holiday to relieve all that work stress, or buy a branded bag to up our status in the society. So how does one save up when there are so many temptations each month? Well, it’s pretty simple. Open a savings account and set aside a set amount each month to save once your salary is in. You can even do this automatically with some banks. If you have been saving up for a couple of years now, give yourself a pat on the back! Why not make your savings work harder for you by putting them into some of these higher interest savings account?
Not getting a healthcare insurance
While we love Singapore for its meritocratic values, we also know that one of the lacking point in this little red dot remains its expensive healthcare system. Yes, the government has done its part in introducing compulsory savings via the CPF, many of us also know that the CPF is hardly enough as both a retirement and healthcare scheme. Supplementing it with a healthcare insurance is certainly a much recommended approach to take in case we become a financial liability to ourselves and our family.
The key is to take advantage of cheaper prices to buy a healthcare insurance when you are young, since premiums typically increase with age. Our advice is to keep to simple insurance products unless you are savvy enough to understand the hidden costs in structured insurance products that allow you to invest in funds as well.