Saving money is often one of the top few financial resolutions. After all, it is the foundation upon which other financial resolutions can be achieved. Without savings, you don’t have the required capital to be investing. Thus, becoming a better saver is the top of our recommended financial resolution that every Singaporean should be making. But we don’t just stop at telling you the ‘why’. More importantly, here’s the ‘how’.
1. It is all in the mind: A small mindset change can make a huge difference
When you set your mind to becoming a better saver, the first thing that comes to mind is to think of 1,001 tangible ways to save more. But sometimes, a small mindset change is much more important than brainstorming for ideas to save more. The ‘why’ of saving is much more important than the ‘how’ because the ‘why’ keeps you motivated to sustain your savings efforts. Without the ‘why’, it is no surprise if you only sustain your savings efforts for 1-2 months.
Read on to find how these mindset changes can help you up your savings game: 4 Small Mindset Changes That Can Help You Up Your Savings Game
High interest savings account: Why settle for less when you can get more?
Singaporeans, typically set aside a part of their income and save for a rainy day (if it even comes). And yet, despite all the savviness in savings, they sometimes fail to realize a simple thing such as to put your savings in a high interest savings account. After all, why settle for 0.05% interest rate when the banks are offering 1.55% (or more) by just fulfilling some criteria like crediting your salary with them?
Check out which are the Best Savings Accounts in Singapore that you should be switching to
Where do I start: Simple saving hacks to kickstart your savings journey
All journeys start with a single step. The same applies to your journey towards becoming a better saver. It all starts from a single step. A good first step to take towards kickstarting your savings journey is to find ways to help you to save effortlessly. Ideally, you want to have money saving tools that help you automate your finances and keep your budget in check. You don’t want to be spending time keying in your money transactions into excel spreadsheets. Instead, you want saving hacks to quickly turn you into a savvy saver.
Find out more about saving hacks from 5 Frugal Things to Do Daily for Better Savings and Feeling Broke? You’ll Need This List of Money-Saving Tools for Working Adults
One wrong step is a step too many: Avoiding saving mistakes is also vital
Besides thinking about ways to do it right with savings, the alternate perspective of avoiding mistakes is also key. In all honesty, one wrong step taken in the savings journey can be one step too many. A wrong step will need you to take 2 (sometimes 3) steps in the right direction just to unwind the wrong step. Thus, avoiding saving mistakes is crucial if you want to become a better saver.
Find out what are the mistakes that are commonly made when people think about saving money. Make sure you avoid them vehemently.
2. Be a smarter spender
Controlling where your income flows to is only the first step to step up your personal finance game. If you have already taken that step, congratulations. You are now ready to embark on the next step, i.e. to be a smarter spender. A smart spender possesses two key characteristics. Firstly, a smart spender doesn’t spend where it is unnecessary. Secondly, a smart spender gets more even by spending less in areas where the spending is necessary. If you are aspiring to become a smarter spender, here are some tips that will be useful for you.
Switching to a new electricity provider: Why pay so much for your electricity bills?
Did you know that Singapore transited to an Open Electricity Market last year? If you don’t already know that, the transition means that Singaporeans are now able to choose your own electricity provider. You no longer have to stick to the mandatory SP Group to supply your electricity. The transition not only means that you get more flexibility, it also means that you can get your electricity at a cheaper rate. You can get your electricity at a discounted price (>15% discount) by simply switching out of your existing SP Group subscription. Plus, with the Open Electricity Market, electricity providers are fighting for your business. It is just like the telcos that are offering you more to switch over to them. Surprisingly, despite the heaps of discounts that new electricity providers are offering, some of us are still fighting that inertia to change.
Check out Bankbazaar’s guide to picking the best electricity provider to help you cut back your electricity spending: A Guide to Picking the Best Electricity Provider in Singapore to Suit Your Needs
If you still need more convincing, read more on 5 Reasons Why Switching to an Electricity Retailer Benefits You
Take advantage of credit cards to get more with less
Some people claim that credit cards are a bane that should be avoided. But truth be told, credit cards are one of the best tools that is made for smart spenders. The only caveat is that you need to be smart about how you use it and which credit card you are using.
For those without credit card experience, starting with a cashback credit card can be a good starting point. Cashback credit cards allow you to get instant discount on your spending when you spend at a designated retailer. For example, OCBC 365 credit card lets you get 3% cashback on your grocery spend and 6% on your dining spend. It also gives you significant cashback on big ticket items like petrol where you can save more than 20% if you pump at Caltex or Esso.
Check out Bankbazaar’s trove of cashback credit card guides to help you find the best cashback credit cards for you.
Online shopping: Hacks that every smart spender should know
Did you know that when you shop, your brain produces a type of hormone known as dopamine? It is the exact hormone that is produced when drugs and alcohol are consumed. No wonder we are unable to resist the urge of shopping. While it is a tall task to ask of anyone, but here’s the next best alternative: Online shopping. Online shopping lets you satisfy that biological need to shop but helps you keep your spending in reign. After all, if you can buy a similar item online for a much lower cost, why buy it from the retail shop?
Check out some online shopping hacks that you should know: Online Shopping Hacks: 7 Ways to Crack the Best Deals
Be smart about your loans and reduce your interest payments
If you are the proud owner of a HDB or private property, then a bulk of your monthly income goes into paying off your mortgage. Although you know the money goes into a valuable asset, don’t you just wish that there is a way for you to reduce your monthly outgoing cashflow to the bank? Well actually, you can. First, review your home loan and compare against the rest of the deals in the market to see if you are getting the best deal. If you aren’t and your loan isn’t in a lock-in state, you can switch from your current loan to a more attractive loan. This can potentially help you save a few hundred dollars every month.
Trying to hunt for the best home loan deal in the market? Let Bankbazaar’s ultimate guide on home loans make it easy for you. The Ultimate Guide to the Best Home Loans in Singapore for 2019
Not sure how refinancing works? Here’s a quick guide to help you understand refinancing. Refinancing Your Home Loan: Why Do It and How?
3. Become a savvy investor
For newbie investors, one of the things you definitely should avoid is to dive head in to investments. But without getting into the right investing mentality, you might find yourself prone to making newbie investor mistakes that can jeopardize your portfolio. Investing isn’t just all about the hard skills. Often, it is the soft skills that determine whether you will become a savvy investor. If you are investing for the first time, make sure you go through these guides to set your investing mentality right for success:
Singapore Savings Bond: Who says risk averse should stop you from investing?
For risk averse Singaporeans, Singapore Savings Bond is a good starting point. It is a sure-win investment (guaranteed interest rate) that you won’t regret putting your money in.
Check out Bankbazaar’s Singapore Savings Bond guide and how you can start investing easily with Singapore Savings Bond: How to Buy Your First Singapore Savings Bonds in 4 Easy Steps
Robo advisor, regular savings plan, ETFs: Simple fuss free investing for the busy and newbies
After hearing so many stories of people burning their fingers in the stock market, who can blame them? It is little wonder why you might want to know everything before they plunge into the world of investing. The other common excuse that is often quoted for not investing is that we are simply too busy. You can be a savvy investor even if you have a very packed schedule. This is because there are simple fuss free methods to help you become a savvy investor like robo advisors, regular savings plan and ETFs. You don’t need to be spending hours doing your research and nitpicking stocks.
Check out the following guides to help you achieve simple fuss free investing:
Robo Advisory Guides
Regular Savings Plan Guides
Now that you have the ultimate guide to achieving your financial resolution, the rest is now up to you. Just a word of caution: If you diligently follow this financial resolution guide for the rest of the year, you will be surprised at the result. Make sure you mark your calendar now to see how much you progress by the end of the year. We won’t be surprised if you manage to out-do yourself with your financial resolutions.
Read also: Top 10 New Year Resolutions on Saving Money