Debt which is money that is owed to someone else has become an issue for many in developed countries. They are liabilities that drain money out of you, since part of your monthly income will have to go towards servicing the debt and the interest that go with it.
Debt is bad to your finances when you run up your credit card balances in order to live beyond your means or to purchase goods and services that don't have a lasting value for you and your family. For example, restaurant meals, purchase wine, dying of hair don't have any lasting value but they sure increase your credit card debt. Debt is also a negative if you have so much that you have so much that you cannot repay it.
What is good debt then? Debt is good if it ultimately accumulate wealth for you. One example is getting a mortgage to purchase your home which grows in value over time. Another example is a loan to start your own business. Some debts help you to save money in the long run, like getting a loan to make you home or business more energy efficient so you can reduce on your utilities bill.
Wednesday, 16 November 2011
Tuesday, 8 November 2011
Compound interest, rule of 72
Building wealth takes time, even with the power of compound interest. Albert Einstein called compound interest "the most powerful force in the universe". Not only does your own money make more money, but the extra money your money makes also makes money for you.
How does compound interest works. Let's use an example whereby you deposit $100 in a fixed deposit account that pays 3 percent interest after a year. After the end of the 1st year, you will receive $103, which is your principal and your interest. If you place the $103 back to the account and the interest remains as 3 percent, you will receive $106.09 at the end of 2nd year.If the interest rate is higher, say 5 percent, then you see your money grow at a much faster rate with compound interest.
Do you have any idea how long does it take to double your money with a given interest rate? The "rule of 72" can give you a general idea. Divide 72 by the interest rate you get on your savings. If you are earning 4 percent, it will take about 18 years for your money to double (72 / 4 = 18). If you earn 6 percent , your money will double in 12 years.
To make your money work for you, you have to leave it in a interest bearing instrument or vehicle and let it do its job, which is to earn money. Your money cannot work for you if you let it idle by placing them under the pillow for example. Everyday that you delay putting your money to work, you lose out on the magic of compound interest.
How does compound interest works. Let's use an example whereby you deposit $100 in a fixed deposit account that pays 3 percent interest after a year. After the end of the 1st year, you will receive $103, which is your principal and your interest. If you place the $103 back to the account and the interest remains as 3 percent, you will receive $106.09 at the end of 2nd year.If the interest rate is higher, say 5 percent, then you see your money grow at a much faster rate with compound interest.
Do you have any idea how long does it take to double your money with a given interest rate? The "rule of 72" can give you a general idea. Divide 72 by the interest rate you get on your savings. If you are earning 4 percent, it will take about 18 years for your money to double (72 / 4 = 18). If you earn 6 percent , your money will double in 12 years.
To make your money work for you, you have to leave it in a interest bearing instrument or vehicle and let it do its job, which is to earn money. Your money cannot work for you if you let it idle by placing them under the pillow for example. Everyday that you delay putting your money to work, you lose out on the magic of compound interest.
Friday, 4 November 2011
What should I invest in?
Once you determined that yourself is financially ready to invest. The next question that will come to your mind will be "What should i invest in?". "What investment choices do u have?".
Investment instrument #1 : Stocks
Stocks are shares of ownership in a company. Collectively, the company is owned by all its shareholder, and each share represents a claim on its assets and liabilities. There are many ways to classified the stock market. You can classify the market by company size, sector, and type of growth patterns.
As the stock markets move on the financial realities of the economy as well as based on people's expectations and emotions(mainly fear and greed), investing in stocks can be very volatile in the short term. And while it is true that everything that goes down must come up, especially in the stock market - following Warren Buffet's example of swiping everything of value that is offered at a discounted price is just not for everybody.
Thus, before you start investing in stocks, you need to ask yourself whether you can stomach the short term volatility. Investing in stocks must be considered as a long-term endeavor if it is to be successful.
Investment instrument #2 : Bonds
Bonds are similar to fixed deposit, except that bonds are securities that you can trade in the market with fluctuating value. There are many types of bonds, they differ from one another according to a number of factors - length of maturity, credit quality, and the entities that issues the bonds. Example of the types of bonds include sovereign bonds and high yield bonds.
Bonds are generally perceived to be safer than stocks. However, it is not without risks. The main risks lies in the credit risk, with the credibility of the issuer of the bond constituting a major factor as to how risky the bond is. Credit agencies such as Moody's, Standard & Poor's and Duff & Phelps rate the credit quality of the bonds and its probability of default. The lower a bond's credit rating and quality, the higher the yield you can expect and rightly so.
The latest euro zone crisis has shown the world that all investment vehicles contain the element of risk. The collapse of MF Global after the decline in value of its substantial sovereign debt-related holdings shows that even governments can default.
Another risk for holding bonds is the foreign exchange risks. When the investment is in one currency (e.g USD) , and is different from the functional currency of the investor (e.g Singapore Dollar), the investor is exposed to foreign exchange fluctuation. The foreign exchange exposure may add or reduce the value of the bond investments depending on the movement of the foreign exchange the bonds are denominated.
Investment instrument #3 : Real Estate
If you have already bought your own home, using real estate as an investment may interest you. Over the last few years, real estate investing has generated healthy returns for its participants. Will this trend continues or its success succumb to the on-going euro zone crisis?
Real estate is different from most other investments because you can borrow 60 percent to 80 percent of the value of the property to buy it. Thus, you can use your down payment of 20 percent to 40 percent of the purchase price to buy, own and control a much larger investment; this concept is called leverage. You certainly hope that the value of your real estate goes up - if it does, you make money on your original dollars invested as well as on the money that you borrowed.
Investment instrument #1 : Stocks
Stocks are shares of ownership in a company. Collectively, the company is owned by all its shareholder, and each share represents a claim on its assets and liabilities. There are many ways to classified the stock market. You can classify the market by company size, sector, and type of growth patterns.
As the stock markets move on the financial realities of the economy as well as based on people's expectations and emotions(mainly fear and greed), investing in stocks can be very volatile in the short term. And while it is true that everything that goes down must come up, especially in the stock market - following Warren Buffet's example of swiping everything of value that is offered at a discounted price is just not for everybody.
Thus, before you start investing in stocks, you need to ask yourself whether you can stomach the short term volatility. Investing in stocks must be considered as a long-term endeavor if it is to be successful.
Investment instrument #2 : Bonds
Bonds are similar to fixed deposit, except that bonds are securities that you can trade in the market with fluctuating value. There are many types of bonds, they differ from one another according to a number of factors - length of maturity, credit quality, and the entities that issues the bonds. Example of the types of bonds include sovereign bonds and high yield bonds.
Bonds are generally perceived to be safer than stocks. However, it is not without risks. The main risks lies in the credit risk, with the credibility of the issuer of the bond constituting a major factor as to how risky the bond is. Credit agencies such as Moody's, Standard & Poor's and Duff & Phelps rate the credit quality of the bonds and its probability of default. The lower a bond's credit rating and quality, the higher the yield you can expect and rightly so.
The latest euro zone crisis has shown the world that all investment vehicles contain the element of risk. The collapse of MF Global after the decline in value of its substantial sovereign debt-related holdings shows that even governments can default.
Another risk for holding bonds is the foreign exchange risks. When the investment is in one currency (e.g USD) , and is different from the functional currency of the investor (e.g Singapore Dollar), the investor is exposed to foreign exchange fluctuation. The foreign exchange exposure may add or reduce the value of the bond investments depending on the movement of the foreign exchange the bonds are denominated.
Investment instrument #3 : Real Estate
If you have already bought your own home, using real estate as an investment may interest you. Over the last few years, real estate investing has generated healthy returns for its participants. Will this trend continues or its success succumb to the on-going euro zone crisis?
Real estate is different from most other investments because you can borrow 60 percent to 80 percent of the value of the property to buy it. Thus, you can use your down payment of 20 percent to 40 percent of the purchase price to buy, own and control a much larger investment; this concept is called leverage. You certainly hope that the value of your real estate goes up - if it does, you make money on your original dollars invested as well as on the money that you borrowed.
Tuesday, 1 November 2011
Are you ready to invest?
As mentioned in the previous post, investing is exciting and action packed. Investing is the way to grow your money. However, most people forget to ask themselves whether they are in the position to invest. "Are you ready to invest?" As with everything in life, there are two sides to the coin.
On the one hand, the current euro zone crisis could be taken as a clear warning for you to rush out and away from the market. On the other hand, the euro zone crisis can be a signal for long term investors to slowly work their way into the market with the belief that crises are often opportunities in disguise.
Before you start to invest, it is important that you get your financial house or financial statement in order. Certainly you want to earn a good return on your investment without being clobbered. Only when you have systematically reviewed your finance will you be able to assess your readiness to invest in the future.
Establish your cash flow statement
You should be able to keep track of the direction of the cash flow, whether it is getting in or getting out of your pocket. You can track your cash flow by tabulating your monthly income and expense. If you have more money inflow than your outflow, then you are financially sound.
Determine your asset and liabilities
Next, you need to determine what are your assets and liabilities. Someone who has many assets and few liabilities will certainly be more financial ready to invest than someone who has few assets but many liabilities.
Have an emergency fund
Life is unpredictable.No one can predict what life brings, so having a really accessible reserve of cash to meet unexpected expenses make good financial sense. Examples of unexpected expenses include doctor visits, rate hikes in utilities, computer repairs just to name a few.You certainly do not want to be in a situation where you have to sell your investment during a down period to meet you financial obligation.
Finally, while the investment market has been volatile for the last few months with the on-going euro zone crisis, it is still important for someone to invest to gain financial independent. Understand where you stand financially is the first step towards a sucessful investment. It helps you to recognise which instrument is in your best interest according to yout current financial situation.
On the one hand, the current euro zone crisis could be taken as a clear warning for you to rush out and away from the market. On the other hand, the euro zone crisis can be a signal for long term investors to slowly work their way into the market with the belief that crises are often opportunities in disguise.
Before you start to invest, it is important that you get your financial house or financial statement in order. Certainly you want to earn a good return on your investment without being clobbered. Only when you have systematically reviewed your finance will you be able to assess your readiness to invest in the future.
Establish your cash flow statement
You should be able to keep track of the direction of the cash flow, whether it is getting in or getting out of your pocket. You can track your cash flow by tabulating your monthly income and expense. If you have more money inflow than your outflow, then you are financially sound.
Determine your asset and liabilities
Next, you need to determine what are your assets and liabilities. Someone who has many assets and few liabilities will certainly be more financial ready to invest than someone who has few assets but many liabilities.
Have an emergency fund
Life is unpredictable.No one can predict what life brings, so having a really accessible reserve of cash to meet unexpected expenses make good financial sense. Examples of unexpected expenses include doctor visits, rate hikes in utilities, computer repairs just to name a few.You certainly do not want to be in a situation where you have to sell your investment during a down period to meet you financial obligation.
Finally, while the investment market has been volatile for the last few months with the on-going euro zone crisis, it is still important for someone to invest to gain financial independent. Understand where you stand financially is the first step towards a sucessful investment. It helps you to recognise which instrument is in your best interest according to yout current financial situation.
Wednesday, 26 October 2011
Pareto, or the 80/20 rule
I believe most of us have heard of Pareto Principle, also known as 80/20 rule, the Principle of Least Effort, and the law of the vital few). Named after Italian economist Vilfredo Pareto, who observed in 1906 the unequal distribution of wealth in his country, that is 80 percent of Italy is owned by 20 percent of the people.
The 80/20 Rule means that in anything a few (20 percent) are vital and many (80 percent) are trivial. You can apply the 80/20 rule to almost anything from saving money to investing and to the physical world.
You observed 20 percent of the suppliers are responsible for 80 percent of supplier related concerns. You observed that 20 percent of the items or services you bought account for 80 percent of your monthly expenditure. Also, you observed that 80 percent of your success come from 20 percent of your efforts.
Understand the Pareto principle will help you to focus your energy on those items that account for most of your monthly expenditure if you are contemplating how to increase your saving. In addition, it reminds you to focus your time and effort on those 20 percent investment that bring you 80 percent of the return.
A Pareto diagram on monthly expenditure may look as below:
The 80/20 Rule means that in anything a few (20 percent) are vital and many (80 percent) are trivial. You can apply the 80/20 rule to almost anything from saving money to investing and to the physical world.
You observed 20 percent of the suppliers are responsible for 80 percent of supplier related concerns. You observed that 20 percent of the items or services you bought account for 80 percent of your monthly expenditure. Also, you observed that 80 percent of your success come from 20 percent of your efforts.
Understand the Pareto principle will help you to focus your energy on those items that account for most of your monthly expenditure if you are contemplating how to increase your saving. In addition, it reminds you to focus your time and effort on those 20 percent investment that bring you 80 percent of the return.
A Pareto diagram on monthly expenditure may look as below:
Monday, 24 October 2011
Investing Risk
Investing is an exciting and action-packed idea that for a long time has make people excited about it. Even if you have little money to invest, there is a possibility for you to build wealth through investing.
However, though it is possible for you to make money through investing, it is possible to lose as well. Understand the whole question of risk is thus very important. Risk is in the eye of the beholder. Some people think that the sole risk they face in investing is directly related to profitability. If you make a profit, you beat the risk; if you have a loss, you lose.
Experienced investors understand that investing is a number game. You are going to have some losses along the way, and the key to succeed is creating profits that are higher than the occasional loss, and for which the dollar amount is much greater.
Here are a number of different risks every investor face when investing:
Market Risk
This is the risk that price will decline reducing the value of the investment with changing market condition, including the forces of supply and demand and interest rate changes
Knowledge and Experience Risk
The risk involves the combination of two things: your knowledge and experience risks. These include your investing background as well as the collective research you have performed for yourself in the past - performing online searches and studying books or magazines. Knowledge and experience ultimately determines how you view the markets and how you approach the selection of your investment
Foreign exchange risk
When the investment is in one currency (e.g USD) , and is different from the functional currency of the investor (e.g Singapore Dollar), the investor is exposed to foreign exchange fluctuation.
Inflation risk
Increase in the cost of living (i.e. inflation) can erode the purchasing power of money. For investor, inflation requires ever-higher returns on your investment to offset the effects of inflation.
However, though it is possible for you to make money through investing, it is possible to lose as well. Understand the whole question of risk is thus very important. Risk is in the eye of the beholder. Some people think that the sole risk they face in investing is directly related to profitability. If you make a profit, you beat the risk; if you have a loss, you lose.
Experienced investors understand that investing is a number game. You are going to have some losses along the way, and the key to succeed is creating profits that are higher than the occasional loss, and for which the dollar amount is much greater.
Here are a number of different risks every investor face when investing:
Market Risk
This is the risk that price will decline reducing the value of the investment with changing market condition, including the forces of supply and demand and interest rate changes
Knowledge and Experience Risk
The risk involves the combination of two things: your knowledge and experience risks. These include your investing background as well as the collective research you have performed for yourself in the past - performing online searches and studying books or magazines. Knowledge and experience ultimately determines how you view the markets and how you approach the selection of your investment
Foreign exchange risk
When the investment is in one currency (e.g USD) , and is different from the functional currency of the investor (e.g Singapore Dollar), the investor is exposed to foreign exchange fluctuation.
Inflation risk
Increase in the cost of living (i.e. inflation) can erode the purchasing power of money. For investor, inflation requires ever-higher returns on your investment to offset the effects of inflation.
Friday, 21 October 2011
Renting, sharing and swopping, rather than buying
Collaborative consumption is the "rapid explosion in traditional sharing, bartering, lending, trading, renting, gifting and swopping reinvented through network technologies on a scale and in ways never possible", explains the book What's mine is yours, written by Rachel Botswan. Other resources with similar ideas on sharing include the book "The Mesh: Why the Future of Business is Sharing" by Lisa Gansky and the Shareable websites.
In the books What's Mine is Yours, the author describe three systems of Colloborative Consumption- Product Service Systems, Redistribution Markets and Collaborative Lifestyles.
Examples of collaborative consumption in Singapore include:
Product service systems: Consumers pay a small fees to enjoy the benefit of using something without owning it outright.
* Rent That Toy
(rent-that-toy.com): Rent children's toys
* The Baby Specialist
(thebababyspecialist.com.sg): Rent baby equipment
* Maternity Exchange
(maternityexchange.sg): Rent and buy maternity wear for mums-to-be
* Clean Mobility
(clean-mobility.com.sg): Electric vehicle sharing and rental
* MyRideBuddy
(myridebuddy.com): Car and taxi pooling
Redistribution markets: The transfer of used or unwanted goods from where they are not needed to where they are:
*SG Freecycle
(sgfreecycle.org): Give away or get used items free
*Barterfolks
(barterfolks.sg): Trade services or goods for other items
Collaborative lifestyles: Sharing skills, time, space and money with people of similar interests
*Cowork.SG
(cowork.sg): Share a workspace
*Learnemy
(learnemy.com): Teach anything or find a lesson
*HelloworldHQ
(helloworldhq.com): Explore or guide visitors around a sub-culture, such as the cycling scene or golf scene.
*Give Singapore
(Give.sg): Allow anyone to organise their own fundraising campaigns
Wednesday, 19 October 2011
Money Saving tips on transport
Do i have real need to own a Car?
One of the most expensive items in Singapore is the car. Before you decide to buy the car, ask yourself whether you real need for it. If you cannot fully utilise the car, it will be sitting idle and continue to depreciate away. In general, car prices had doubled over the last 2 years. The price of a Toyota Corolla 1.6 has rocketed from $55,000 two years back to about $110,000 today. The bigger Camry 2.0 has gone from $78,000 to $152,000. Economics aside, it is relatively painless time to give up buying a car because Singapore's MRT expansion programme is back on track. The Circle line is up and running, improving connectivity and convenience for thousands of households along its 33.3 kilometres alignment. And with one rail project scheduled for completion every single year till 2017, the need for car is no longer a dire need as before.
Avoid the surcharge when taking the cab.
Most of us is aware that surcharge is applicable if we take a cab during peak hours and midnight. During peak hours, the surcharge is 35% of metered fare while the midnight surcharge is 50% of metered fare. What it means is that if you make a trip from Seng Kang to Ang Mo Kio and the metered fare is $8, you will need to pay a surcharge of $2.80. Your fare for the trip will be $10.80. If you have make the same trip just after midnight, your fare will be $12. So the next time you intend to take the cab, do plan the trip to avoid the surcharge.
Enjoy early bird discount on SMRT
You are entitled to a 30 cents discount if you travel on SMRT's train lines before 7.45am. The discount applies to commuters who enter the train system from stations on the North-South, East-West lines and Bukit Panjang LRT lines, which is run by SMRT. The discount does not apply to SMRT's new circle line. To enjoy lower fares, commuters must also exit at nine city stations: City Hall, Lavender, Bugis, Raffles Place, Tanjong Pagar, Outram Park, Dhobby Ghuat, Somerset and Orchard, before 7.45am. Though the saving may not be significant, every penny counts.
One of the most expensive items in Singapore is the car. Before you decide to buy the car, ask yourself whether you real need for it. If you cannot fully utilise the car, it will be sitting idle and continue to depreciate away. In general, car prices had doubled over the last 2 years. The price of a Toyota Corolla 1.6 has rocketed from $55,000 two years back to about $110,000 today. The bigger Camry 2.0 has gone from $78,000 to $152,000. Economics aside, it is relatively painless time to give up buying a car because Singapore's MRT expansion programme is back on track. The Circle line is up and running, improving connectivity and convenience for thousands of households along its 33.3 kilometres alignment. And with one rail project scheduled for completion every single year till 2017, the need for car is no longer a dire need as before.
Avoid the surcharge when taking the cab.
Most of us is aware that surcharge is applicable if we take a cab during peak hours and midnight. During peak hours, the surcharge is 35% of metered fare while the midnight surcharge is 50% of metered fare. What it means is that if you make a trip from Seng Kang to Ang Mo Kio and the metered fare is $8, you will need to pay a surcharge of $2.80. Your fare for the trip will be $10.80. If you have make the same trip just after midnight, your fare will be $12. So the next time you intend to take the cab, do plan the trip to avoid the surcharge.
Peak Hour Surcharge
|
||
Monday - Friday : 7.00am to 9.30am
|
35% of metered fare
|
35% of metered fare
|
Monday - Saturday: 5.00pm to 8.00pm
|
35% of metered fare
|
35% of metered fare
|
Applicable at the time of boarding. Not applicable on Sundays
and Public Holidays
|
Midnight Surcharge
|
|
Midnight - 5:59am
|
50% of metered fare
|
Enjoy early bird discount on SMRT
You are entitled to a 30 cents discount if you travel on SMRT's train lines before 7.45am. The discount applies to commuters who enter the train system from stations on the North-South, East-West lines and Bukit Panjang LRT lines, which is run by SMRT. The discount does not apply to SMRT's new circle line. To enjoy lower fares, commuters must also exit at nine city stations: City Hall, Lavender, Bugis, Raffles Place, Tanjong Pagar, Outram Park, Dhobby Ghuat, Somerset and Orchard, before 7.45am. Though the saving may not be significant, every penny counts.
Monday, 17 October 2011
Saving Money tips on income tax
Making the most out of your income tax relief, you can save yourself some money:
Top up your family members's CPF account
Central Provident Fund (CPF) allows members to top up their families' CPF account. If you decide to use cash to top up the CPF account of family members, who may include grandparents, parents, siblings, and your spouse, the CPF board will grant a tax relief of $7,000 per calendar year.
To qualify for the tax relief with cash top-ups for siblings/spouse, your sibling/spouse must not have income exceeding $4000 in the year preceding the year of the top-up. The sibling / spouse also qualifies without an income test if he is handicapped.
Top up your own CPF account
In addition to topping up your family CPF account, you can top up your own CPF account using cash as long as it is below the minimum sum. The CPF board will grant a tax relief of $7,000 per calendar year for this case. The minimum sum is currently $131,000.
Top up your SRS account
If you do not have a Supplementary Retirement Scheme (SRS) account, do consider opening one. SRS is a financial tool to help Singaporeans save more for their old age. Whereas CPF participation is compulsory, participation in SRS is not. SRS offers attractive tax benefits. Money set aside in SRS are eligible for tax relief subject to a contribution cap. Only 50% of the money withdrawn from your SRS account is taxable if you withdraw your money after the retirement age. In addition, it is expected that at your retirement age, your income bracket is much lower than your prime career period, this it is possible that you achieve little or no tax when you withdraw your money. The revised annual SRS contribution cap is $12,750 for Singaporeans and Permanent Residents, and $29,750 for foreigner. However, it is important to note that if you withdraw your SRS money before the retirement age, the money withdraw will not enjoy tax concession of 50% and 100% tax will be imposed. Thus, please make sure the money you put in your SRS account is not something you need in the short term.
Top up your family members's CPF account
Central Provident Fund (CPF) allows members to top up their families' CPF account. If you decide to use cash to top up the CPF account of family members, who may include grandparents, parents, siblings, and your spouse, the CPF board will grant a tax relief of $7,000 per calendar year.
To qualify for the tax relief with cash top-ups for siblings/spouse, your sibling/spouse must not have income exceeding $4000 in the year preceding the year of the top-up. The sibling / spouse also qualifies without an income test if he is handicapped.
Top up your own CPF account
In addition to topping up your family CPF account, you can top up your own CPF account using cash as long as it is below the minimum sum. The CPF board will grant a tax relief of $7,000 per calendar year for this case. The minimum sum is currently $131,000.
Top up your SRS account
If you do not have a Supplementary Retirement Scheme (SRS) account, do consider opening one. SRS is a financial tool to help Singaporeans save more for their old age. Whereas CPF participation is compulsory, participation in SRS is not. SRS offers attractive tax benefits. Money set aside in SRS are eligible for tax relief subject to a contribution cap. Only 50% of the money withdrawn from your SRS account is taxable if you withdraw your money after the retirement age. In addition, it is expected that at your retirement age, your income bracket is much lower than your prime career period, this it is possible that you achieve little or no tax when you withdraw your money. The revised annual SRS contribution cap is $12,750 for Singaporeans and Permanent Residents, and $29,750 for foreigner. However, it is important to note that if you withdraw your SRS money before the retirement age, the money withdraw will not enjoy tax concession of 50% and 100% tax will be imposed. Thus, please make sure the money you put in your SRS account is not something you need in the short term.
Thursday, 13 October 2011
Saving Money tips on phone, internet
Bundle Your Phone, Internet and Cable TV
If you pay separate bills for home phone, cable, and internet service, you will be able to save some money by bundling all these services together with the telecom company.
The disadvantage is that you will be contracted to the telco for a fixed period. Example of a bundle plan is the mio home plan from Singtel.
Use Skype to reduce Cell-phone Charges
Talking on a cell phone can be expensive, especially international call. To save on international calls, use Skype when you are at the computer.
Skype turns your computer into phone. You can call other Skype users for free, and other phones for very cheap. All you need is an internet connection and a headset.
Pre-paid cards
If you are mostly not on the phone, you probably want to use a pre-paid card instead of signing up for a post paid plan. My son and my wife use pre-paid card as they are seldom on the phone. They top up $10 for the card every 3 months. I don't see any post-paid plan that cost below $10.
Choose the appropriate post paid phone / broadband plan
Choose the apppriate plan according to your need. If you talk a lot over the phone, you certainly want to choose a plan that give you a lot of free call minutes. If you do not need high broadband bandwith, subscribe to the lowest plan. I just recontracted my 3mps unlimited broadplan.
If you pay separate bills for home phone, cable, and internet service, you will be able to save some money by bundling all these services together with the telecom company.
The disadvantage is that you will be contracted to the telco for a fixed period. Example of a bundle plan is the mio home plan from Singtel.
Use Skype to reduce Cell-phone Charges
Talking on a cell phone can be expensive, especially international call. To save on international calls, use Skype when you are at the computer.
Skype turns your computer into phone. You can call other Skype users for free, and other phones for very cheap. All you need is an internet connection and a headset.
Pre-paid cards
If you are mostly not on the phone, you probably want to use a pre-paid card instead of signing up for a post paid plan. My son and my wife use pre-paid card as they are seldom on the phone. They top up $10 for the card every 3 months. I don't see any post-paid plan that cost below $10.
Choose the appropriate post paid phone / broadband plan
Choose the apppriate plan according to your need. If you talk a lot over the phone, you certainly want to choose a plan that give you a lot of free call minutes. If you do not need high broadband bandwith, subscribe to the lowest plan. I just recontracted my 3mps unlimited broadplan.
Wednesday, 12 October 2011
Saving Money tips on Groceries
"Prepare to pay more for Thai rice" - Straits Times October 11, 2011
"Hungry world will drive up food prices even higher" - Straits Times October 3 2011
"Singapore inflation rate expected to remain high" - Straits Times Sep 3, 2011
When you are constantly bombarded with all these headlines, you understand why the dollars you have seem to buy you much less food than one year ago.
In order to stretch your food dollars, here are some super saver tips:
1. Frozen Option
- Opt for frozen meat rather than fresh cuts. It could reduce your bill by up to 50%. Frozen cuts are just as tasty as fresh ones, and as nutritious.
2. House Brand Advantage
- Buy supermarket house brands and items produced in Singapore and the region. They cost less. Example of house brand in Singapore supermarket are those from Fairprice and Cold Storage.
3. Less Meat, More Vegetable
- You could substitute meat dishes in your diet with bean and tofu dishes. And eat more vegetables. These are cheaper and healthier
.
4. Buy in Bulk
- Some essential items like rice can be much cheaper when bought in bulk. If the amount is too much for your household, ask the neighbours or your family members to share in the purchase.
5. Buy items on Sale
- Look over the newspaper advertisements and you will find items that are on sale for the week. However, buy it only if you need it. If you buy an item, store it and never use it then you have wasted your money.
6. Use coupons and discounts / rebates
- There are supermarkets / shops that offer discount to senior citizens on one day of the week. Another may tie up with a credit card company to offer rebates/ supermarket after you chalk up enough points.
"Hungry world will drive up food prices even higher" - Straits Times October 3 2011
"Singapore inflation rate expected to remain high" - Straits Times Sep 3, 2011
When you are constantly bombarded with all these headlines, you understand why the dollars you have seem to buy you much less food than one year ago.
In order to stretch your food dollars, here are some super saver tips:
1. Frozen Option
- Opt for frozen meat rather than fresh cuts. It could reduce your bill by up to 50%. Frozen cuts are just as tasty as fresh ones, and as nutritious.
2. House Brand Advantage
- Buy supermarket house brands and items produced in Singapore and the region. They cost less. Example of house brand in Singapore supermarket are those from Fairprice and Cold Storage.
3. Less Meat, More Vegetable
- You could substitute meat dishes in your diet with bean and tofu dishes. And eat more vegetables. These are cheaper and healthier
.
4. Buy in Bulk
- Some essential items like rice can be much cheaper when bought in bulk. If the amount is too much for your household, ask the neighbours or your family members to share in the purchase.
5. Buy items on Sale
- Look over the newspaper advertisements and you will find items that are on sale for the week. However, buy it only if you need it. If you buy an item, store it and never use it then you have wasted your money.
6. Use coupons and discounts / rebates
- There are supermarkets / shops that offer discount to senior citizens on one day of the week. Another may tie up with a credit card company to offer rebates/ supermarket after you chalk up enough points.
Tuesday, 11 October 2011
Saving Money tips on Utilities
All households rely on utilities such as electric, natural gas, and water service to meet basic, everyday needs. Each day, you use these utilities to perform many daily tasks. As the price of energy continues to rise, so does the cost for these necessities, and many households are looking for ways to reduce the cost of their utilities. By practicing energy /water conservation, we can develop habits to reduce our energy/water usage and save money on our utility bills.
If you are interested to know more water saving habits or energy saving tips , you can refer to PUB or SP Services websites respectively.
Climate change is a global problem.
All of us contribute to climate change whenever we switch on an electrical appliance such as the air-conditioner, the radio or the lights. That is because our power plants generate the electricity we use in Singapore by burning fossil fuels such as oil and natural gas. Burning fossil fuels releases carbon dioxide (CO2) which is a greenhouse gas. Excess CO2 traps more heat from the sun via the greenhouse effect, causing climate change. Electricity generation accounts for 48% of Singapore’s CO2 emissions in 2005.
We can all do our part to help fight climate change by reducing the electricity used at homes. Reduce CO2 emissions, help the climate and save hundreds of dollars a year!
So take steps to reduce your CO2 emissions now…..and save money at the same time. It is a “win-win” situation for all.
Monday, 10 October 2011
How you can save money?
With fear of a recession coming, it is believed that those who earn just enough to survive but have a little saving will be dealt with the biggest blow. While they are financially afloat for now, their saving would not be enough for them to ride out an economic storm.
At this point, i find it useful to recap on some money saving tips to increase one own savings.
Below is an extract from the free 'Survival Guide' provided by Central Singapore CDC.
HOW TO SLASH YOUR UTILITY BILLS:
Keep them off
- Switch off electrical appliances at the plug point when you are not using them.
Use a Flask
- Switch on your electric airpot only when you need it.
Cool Temperature
- Set the thermostat of your air-conditioner at 25 degrees Celsius, deemed the optimal temperature by experts. Each degree you raise the temperature takes $25 off your bill a year.
Desktop Helper
- Do not keep your computer running if you are not using it.
Four Ticks is Best
- Buy only appliances, like refrigerators and air-conditioners, with energy efficient labels. The more ticks an appliance has, the less energy it uses. The difference in an electricity bill between a four-tick and a one-tick air-conditioner could be as high as $460 a year, and as much as $130 a year when it comes to refrigerators with four ticks.
Better Bulbs
- Use energy saving or compact fluorescent bulbs, and watch your bill drop by $20 a bulb a year.
MONEY SAVERS water
Five-Minute Shower
- Keep your showers short. Turn off water while soaping.
Use a Thimble
- Attach one of these water-saving devices to your taps, especially the ones at the kitchen sink. Thimbles can be bought at kitchen equipment outlets, hardware shops and home improvement stores. To get a free thimble from PUB, National Water Agency, call 1800 284 6600, or send an email to PUBone@singnet.com.sg. Give them your mailing address and they will post a thimble to you.
Bottle Helper
- To reduce the amount of water you flush away, fill a 500ml bottle and put it in your cistern. Make sure the bottle touches the floor of the cistern. But do not let it touch the cistern’s mechanism.
Re-use water
- Don't wash your vegetables under a running tap. Wash them in a basin of water. Then use that water from your washing machine too, to flush the toilet.
MONEY SAVERS food
Frozen Option
- Opt for frozen meat rather than fresh cuts. It could reduce your bill by up to 50%. Frozen cuts are just as tasty as fresh ones, and as nutritious.
House Brand Advantage
- Buy supermarket house brands and items produced in Singapore and the region. They cost less.
Less Meat, More Veg
- You could substitute meat dishes in your diet with bean and tofu dishes. And eat more vegetables. These are cheaper and healthier.
Buy in Bulk
- Some essential items like rice can be much cheaper when bought in bulk. If the amount is too much for your household, ask the neighbours or your family members to share in the purchase.
MONEY SAVERS managing your money
Pay yourself first
- Save at least 10% of your take home pay each month. You should have an emergency fund equivalent to 3 to 6 months of your take home pay.
Just say No
- The salesman is persistent and you are tempted. The best response is to say “No thanks” and walk away.
Track Expenses
- Jot down in a notebook what you spend your money on. This will allow you to track where the money goes and where you can cut down.
Work out a Budget
- Determine how much you have to spend each week. First subtract your savings from your salary, then your regular expenses, for example, school fees and utility bills. Divide the remainder by four.
At this point, i find it useful to recap on some money saving tips to increase one own savings.
Below is an extract from the free 'Survival Guide' provided by Central Singapore CDC.
HOW TO SLASH YOUR UTILITY BILLS:
Keep them off
- Switch off electrical appliances at the plug point when you are not using them.
Use a Flask
- Switch on your electric airpot only when you need it.
Cool Temperature
- Set the thermostat of your air-conditioner at 25 degrees Celsius, deemed the optimal temperature by experts. Each degree you raise the temperature takes $25 off your bill a year.
Desktop Helper
- Do not keep your computer running if you are not using it.
Four Ticks is Best
- Buy only appliances, like refrigerators and air-conditioners, with energy efficient labels. The more ticks an appliance has, the less energy it uses. The difference in an electricity bill between a four-tick and a one-tick air-conditioner could be as high as $460 a year, and as much as $130 a year when it comes to refrigerators with four ticks.
Better Bulbs
- Use energy saving or compact fluorescent bulbs, and watch your bill drop by $20 a bulb a year.
MONEY SAVERS water
Five-Minute Shower
- Keep your showers short. Turn off water while soaping.
Use a Thimble
- Attach one of these water-saving devices to your taps, especially the ones at the kitchen sink. Thimbles can be bought at kitchen equipment outlets, hardware shops and home improvement stores. To get a free thimble from PUB, National Water Agency, call 1800 284 6600, or send an email to PUBone@singnet.com.sg. Give them your mailing address and they will post a thimble to you.
Bottle Helper
- To reduce the amount of water you flush away, fill a 500ml bottle and put it in your cistern. Make sure the bottle touches the floor of the cistern. But do not let it touch the cistern’s mechanism.
Re-use water
- Don't wash your vegetables under a running tap. Wash them in a basin of water. Then use that water from your washing machine too, to flush the toilet.
MONEY SAVERS food
Frozen Option
- Opt for frozen meat rather than fresh cuts. It could reduce your bill by up to 50%. Frozen cuts are just as tasty as fresh ones, and as nutritious.
House Brand Advantage
- Buy supermarket house brands and items produced in Singapore and the region. They cost less.
Less Meat, More Veg
- You could substitute meat dishes in your diet with bean and tofu dishes. And eat more vegetables. These are cheaper and healthier.
Buy in Bulk
- Some essential items like rice can be much cheaper when bought in bulk. If the amount is too much for your household, ask the neighbours or your family members to share in the purchase.
MONEY SAVERS managing your money
Pay yourself first
- Save at least 10% of your take home pay each month. You should have an emergency fund equivalent to 3 to 6 months of your take home pay.
Just say No
- The salesman is persistent and you are tempted. The best response is to say “No thanks” and walk away.
Track Expenses
- Jot down in a notebook what you spend your money on. This will allow you to track where the money goes and where you can cut down.
Work out a Budget
- Determine how much you have to spend each week. First subtract your savings from your salary, then your regular expenses, for example, school fees and utility bills. Divide the remainder by four.
Sunday, 9 October 2011
What is investing and saving money?
What is saving money?
Saving money refers to putting money aside on a regular basis. You spend below your means and put whatever left behind in the bank. You should have this done automatically after collecting your monthly pay check. Before you have set aside an emergency fund ( normally people advise 6 months of expense), it is advisable that you do not invest.The easiest way to save is to view saving as part of your expenditure. Everyone should save for a rainy day because you never know when you will need the money. Cutting down on your expenses does not mean that you will not be able to enjoy life. The money save can then be channelled to accumulate wealth through investing. Starting on your saving plan can be tough mental and emotional challenge if you have never been saving all this while. However, after you have done it for a period of time, you will find that you actually get a charge out of saving.
What is investing?
Investing refers to once you have set aside the emergency fund, that is when you can begin to invest your money. Investing also means you have money put away for future use. Investing is the smarter way that you begin to really grow your money and begin to build your wealth. You just can't leave it in the banks here. If you keep your saving in a saving account with the bank, the amount of interest you earn may be too small. With inflation, the purchasing power of money will be eroded. When the general price level rises, each unit of currency buys fewer goods and services. However, if you invest in unit trusts, stocks or real estate, your return will probably be higher. In this case, your wealth begins to grow. Investing isn't a rocket science. However, before embark on the journey of investment, get yourself to be financially literate.
In the journey to financial independent, it is important that you spend less than you earn and focus on getting out of debt. If you accumulate debt as fast as you save and invest, then you are not going to come out ahead. Begin budgeting, then you can begin saving and investing.
Saving money refers to putting money aside on a regular basis. You spend below your means and put whatever left behind in the bank. You should have this done automatically after collecting your monthly pay check. Before you have set aside an emergency fund ( normally people advise 6 months of expense), it is advisable that you do not invest.The easiest way to save is to view saving as part of your expenditure. Everyone should save for a rainy day because you never know when you will need the money. Cutting down on your expenses does not mean that you will not be able to enjoy life. The money save can then be channelled to accumulate wealth through investing. Starting on your saving plan can be tough mental and emotional challenge if you have never been saving all this while. However, after you have done it for a period of time, you will find that you actually get a charge out of saving.
What is investing?
Investing refers to once you have set aside the emergency fund, that is when you can begin to invest your money. Investing also means you have money put away for future use. Investing is the smarter way that you begin to really grow your money and begin to build your wealth. You just can't leave it in the banks here. If you keep your saving in a saving account with the bank, the amount of interest you earn may be too small. With inflation, the purchasing power of money will be eroded. When the general price level rises, each unit of currency buys fewer goods and services. However, if you invest in unit trusts, stocks or real estate, your return will probably be higher. In this case, your wealth begins to grow. Investing isn't a rocket science. However, before embark on the journey of investment, get yourself to be financially literate.
In the journey to financial independent, it is important that you spend less than you earn and focus on getting out of debt. If you accumulate debt as fast as you save and invest, then you are not going to come out ahead. Begin budgeting, then you can begin saving and investing.
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