Did you know that Singapore is one of the top 10 most expensive cities1 to live in? The cost of living will only continue to surge due to inflation. In recent current affairs, the government has announced their intention of raising the goods and services tax (GST) as covered in our last article. This means that an increase in our expenditure is unavoidable in the years to come. Some of us may need to tighten our belts and pay more attention to how and where we are spending our money. Financial planning is key to ensure that we remain self-sufficient in the long run. Here are a few financial planning tips to help you manage your money well through rising costs!
Set Financial Saving Goals
Take a look at your new year resolution list. Did it include any financial saving goals? If not, now would be a good time to do so – better late than never!
For starters, try setting specific and realistic goals on actions you can take to help you save money. A good starting point would be to consider your monthly income and set aside a sum of money you wish to save every month. After which, it is also useful to list concrete ways for you to save money such as dining out less or buying second hand items. Setting such goals will help you to save in the long run. Moreover, it helps you visualise better, plan and strategise for a smoother financial management journey! Here are some tips on how to manage your money more effectively.
Expense Tracker and Budgeting
A big part of good financial management is knowing where and how your money is spent. Once you start tracking your expenses, you might be surprised at where your money is going without you even realising it! HappyDot.sg’s survey in Singapore revealed that 68% of participants keep track of their expenses. A good budgeting app will be able to highlight such expenditures for you. Examples include Spendee, Seedly or Expensify, all of which are designed to help you track your spending efficiently. From there, it becomes easier to look at areas where you can cut down on spending. Setting achievable goals will also make it simpler for you to adjust your lifestyle without feeling like you are missing out on life’s pleasures.
Comparing Online and Physical Course Prices
In recent current affairs, GST will be imposed on non-digital services including classes and consultations from 2023 onwards. Online courses through schools or service providers such as Udemy could have GST imposed on them. At the peak of the global pandemic, many have turned to online learning to safeguard their health. However, as Singapore starts to ease measures and we learn to live with COVID-19, it might be time to start comparing the cost difference between online and physical classes. This helps you to upgrade your skills in the most cost-effective way.
Minimise Credit Card Purchases
Credit cards are popular as they allow users to spend even when they may not have enough on hand. There are those who may not even consider if they can pay the balance after. The final bill can therefore come as a shock to them when it is time for payment. Some might even have to use money from their savings to cover their credit card bills. If you think you may be prone to using credit cards on purchases you cannot afford, the best way to steer clear of this would be to set a limit on your credit card purchases. This will help you to avoid incurring unnecessary credit card expenses.
In a nation where the cost of living is extremely high and is projected to continue increasing, understanding how to plan and manage your finances is crucial. In addition, with the upcoming GST hike, now is the best time to start adopting these tips. As long as we keep ourselves updated with announcements that may impact our cash flow and plan accordingly, we will be on the right track towards better financial management!
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