Come rain or shine, its time to start saving

We are coming towards the end of the Northeast Monsoon season, which means more sunshine and less rain! Typically lasting from late November to early March, the season brings periods of prolonged moderate to heavy rain, cooler temperatures and sometimes even resulting in flash floods around Singapore.

The weather is sometimes similar to our lives – there will be sunshine and rain, and the worse thing is you can’t really do anything about it except to ride with it. You can only ensure you are ready for it when the situation appears.

As with money management, the idea is the same. When an unforeseen crisis hits, are you ready for it? We may embrace living in the moment, living hand to mouth with our monthly salary, but what happens when a bad patch hits and you need money urgently?

There lies the wisdom of the adage – “Saving for a rainy day”.

Financial advisors often argue that one should have at least six months’ worth of salary kept in a rainy day fund, where the amount is justified as being sufficient to tide you over an emergency situation for half a year. This does not apply to only circumstances where one is being laid off from work, it could also mean having to stop work due to health reasons, in which the latter could incur additional healthcare costs.

Take a hard look at your current financial situation, are you ready for a rainy day? If not, the great news is that its never too late to start saving.

Despite a generally low interest rate environment, you can still find some great banks offering higher interest rates on savings even without a fixed deposit account.

For instance, from now till 31 March 2015, Standard Chartered has an e$aver account which gives you a high interest of up to 1.35% p.a. on your incremental balance. Your incremental fresh funds will earn you a 1.1 percent interest annually, which makes for great incentive to save more each month!

If you make regular purchases on your credit or debit card each month, Stanchart has another awesome product to optimise your saving/spending habits as well – the Bonus$aver Account .

What you need to do is charge at least $500 to your card each month and earn 1.88 percent p.a interest on your first $25,000 savings balance. Unlike other current and savings accounts, Bonus$aver is an unique account with interest rates that are higher than most time deposits.

Time deposits usually give you a higher interest rate than normal deposit accounts because there is a minimum lock-in period for your money. While this is useful if you have spare cash to keep aside for earning the interest, it may not be the best option as an emergency fund since you will probably need to withdraw the money urgently.

So act fast because from now till end of March 2015, deposit at least $3000 to start your Bonus$aver account and you get to receive a free fitbit flex. Deposit at least $50,000 and get a free Samsung GALAXY Tab 3! What’s great is that while you kickstart your new savings habit, the initial deposit that you put in will already be working hard at earning a high interest for you!