Wednesday, June 29, 2016

Brexit: How Will Singaporeans Be Affected?

The UK just voted in favour for British exit from the European Union. What does it mean for Singapore? What will happen now that British voters decided to leave European Union (EU)? The only honest answer is that we don’t know. A country leaving the EU isn’t something that happens every other month. The most we can do is speculate and play it safe – even if we’re all the way in Singapore.
Britain Isn’t Leaving the European Union Overnight
The United Kingdom (UK) is not leaving right after this referendum. It will probably be 2018 by the time they leave, and a lot of what happens next depends on withdrawal negotiations. That is, they need to work out what to do with the current EU migrants in the UK, and whether the EU is going to raise tariffs against British companies. All of these mean high volatility in the stock market, especially in bourses like the FTSE 100. Meanwhile, here is how Brexit is rocking the world economy, and the good and bad ways it can affect you:
1. Traveling to the UK Costs Less
The British pound is at a 31-year low today, making it very cheap for Singaporeans who want to visit the UK. It is not likely to stay this low for long; but with S&P threatening to downgrade Britain’s AAA credit rating, it’s likely that the pound will remain low for quite a while. That is good if you want to buy a house there, study there, or vacation there.
2. Investors Should Minimise Exposure to UK and EU Companies
Singaporeans should minimize their exposure to UK and EU companies to avoid volatility. This means looking into your mutual funds to see if you’re exposed, and consulting your financial advisor on rebalancing your portfolio. For example, if you have an Investment Linked Policy, you may want to make sure the various sub-funds do not hold much in the way of UK or EU based companies
3. Safe Haven Assets Like Gold and the Japanese Yen are Rising
Gold prices have already risen to $1,277 per ounce and can climb as high as $1,400 per ounce. Along with safe haven assets like the Japanese yen, this is likely to rise further. This is because investors will try to avoid volatility by putting money where they think it’s safe. As such, prices of gold and silver, as well as the strength of the Japanese yen, are likely to rise. It’s good news for those who already have such assets, but those looking to buy should speak to an advisor. It might be too late to do so at this point, and prices may already be too high.
4. Speak to Your Wealth Manager About Your Assets in the UK
If you own a house in the UK or hold other such assets, speak to your wealth manager about rebalancing your portfolio. It may not longer be wise to count on UK property holding its value if you’re nearing retirement, as the current turmoil will not be quickly resolved. It could take many years for the UK to recover, and that will affect asset values there.
5. Singapore Will See Fewer British Tourists
We may get fewer visitors from the UK over the next two years. This is not a HUGE deal, as British tourists only made up 3.2% of our visitor arrivals in April 2016. But we can expect to see less of them as their buying power plummets. Businesses that specialise in serving tourists from the UK may also feel the pinch from Brexit.
Do Not Make Financial Decisions Out of Fear
If you think you’ve just made a financial mistake after the Brexit announcement, give yourself a day or two to cool off. Do not try to “recoup” the loss by making brash and immediate investment decisions – this is akin to a common gambling fallacy, in which gamblers try to make up for a bad round by doubling or tripling the stakes on the next.
When you are anxious or distressed, you are more likely to make a mistake. Taking immediate action after a loss may compound the damage, rather than make up for it. Give yourself a day or two to reflect on what went wrong, and then carry on. 

Saturday, June 25, 2016

How To Escape Living Paycheque To Paycheque In Singapore

Living paycheque to paycheque is not only stressful – it’s dangerous. Here’s how to stop and turn your finances around. If your paycheque seems to vanish as soon as it arrives, and you find yourself surviving on Maggi mee toward the end of the month – you have a problem. Specifically, you’re living paycheque to paycheque. Not only is it stressful; it’s dangerous. A single emergency, such as retrenchment, will send you neck deep in debt. Here’s how to break the habit:
1. Always Pay Yourself First
Before you start spending your money, make sure 20 per cent goes into your savings. We know the CPF does this for you already, but you can’t take out your CPF money easily. It’s important to have an emergency fund that you can tap into when you need. So the moment you get your pay, take 20 per cent and put it in a separate savings account. You’ll want to keep doing this until you accumulate six months worth of savings (however long that takes). Having an emergency fund means you won’t need to resort to loans in a crisis. It also gives you the confidence to make critical decisions, such as switching jobs or starting up a small side-business.
2. Reduce Your Loan Interest
If you find that almost all your money goes into repaying loans, it’s time to reduce the interest rates. One simple way to do this is to use a balance transfer to pay off a credit card completely, or to use a personal instalment loan to pay off higher interest debts. For example: Say you owe $5,000 on a credit card, which has an interest rate of 24 per cent per annum. You could take a personal instalment loan for S$5,000, at just six per cent per annum. You then pay off the credit card with the personal loan. This would effectively reduce your interest rate from 24 per cent to just six per cent. If you use a balance transfer, you might be able to get deals that reduce your debt to zero per cent interest for six months. This makes it considerably easier to pay off the amount owed. You can find the best balance transfer options on You should stop using a credit card or credit line after making a balance transfer to pay it off, or using a loan to do so.
3. Find an Expense Tracking Method That Works For You
What gets measured gets managed. If you track your expenses, you are less likely to overspend. Here’s the tricky part: the same tracking method won’t work for everyone. For some of us, having an Excel spreadsheet does the trick; the rest of us need methods such as sticky notes or phone apps. Experiment with the methods available, from writing things down to using phone apps. Stick to the one that feels most intuitive. This is the first step to developing a functional budget. Which leads to the next issue.
4. You Need a Budget, But Forget the Rigid Methods
The easiest and most effective way to budget is to deduct 20 per cent of a particular expense. For example, if you spend S$1,200 a month on food, see if you can cut it down to S$960. Do this by setting aside $960 in your food budget, and then storing the excess S$240 in savings. You are free to spend the S$960 on food any way you choose – but when you run out, you’ve run out. No cheating and tapping your savings to pay for more. This method is usually more effective than trying to plan out the dollar value of each and every meal. Because we are human beings and not companies, it is not natural for most of us to stick to corporate-style budgets, where the exact amount of each expense is predetermined. Try to use this method for two or three categories in which you spend the most (e.g. food, travel, and clothes). If you fail to keep the budget in one, you may still succeed with the others.
5. Stop Automating Payments
If you have automated payments, such as for gym memberships, MMORPG subscriptions, or clubs, we suggest you cut them off. You should always be aware of what you’re paying, and how much you’re paying for them. This will remind you to stop forking out money for services or goods you don’t actually need. On the other hand, you do want to automate your savings if possible. The reason your CPF seems so huge is because the 20 per cent is deducted for you – out of sight, out of mind.
6. Tighten Your Belt the First Week You Receive Your Pay
Make a pledge to do minimal to no shopping, on the very first week you receive your pay. The only thing you should do that week is transfer money into your savings account and repay any due debts. This will help to break the habit of overspending in the first week, and then needing loans or credit to get you through the rest of the month. It will also prevent you from needing an advance, something that employers look on negatively as it affects their payment process.
7. Let Someone Else Do the Shopping
As a last resort, if you truly cannot control your spending, consider letting someone else do the shopping. Get a spouse, parent, or close friend who is willing to help, and give them a fixed shopping list. Pass them the cash to do the shopping for you, so you don’t get tempted. You can still indulge in the occasional bit of shopping. During the LAST week of the month, if you have a surplus, you may take the money and go shopping yourself. However, you should not bring any credit cards, lest you be tempted to rack up debt.

Wednesday, June 22, 2016

5 Smartest Things To Do With Your Pay Raise In Singapore

There’s a good chance your income will increase in the coming years – but don’t waste your pay raise on expensive things. With the Progressive Payment Scheme in full swing, some Singaporeans can expect to earn more in the coming years. In fact, even though job growth has slowed, real wages in Singapore are up around seven per cent. Even labourers see a wage hike from the Progressive Wage Model, with median wages up by 20 per cent. So there is a very good chance that you will see your income rise this year. Before you rush out to splurge on a new tablet or shoes however, see if you can do something smarter with that money:
1. Pay Off Your Debts
There are many reasons to pay down your loans* early, if you can. Loans apply compounding interest to the amount owed. The longer the loan tenure, the more you end up paying. For example, your credit card debts grow at 24 per cent interest per annum. Assuming you owe S$5,000, and pay back S$200 a month, you would take 35 months to fully repay it. That’s a total repayment ofS$7,000, for a debt of S$5,000. Yes, credit card debt is very expensive. This is why we suggest you repay the full amount every time, and never owe anything. In addition, paying down your loans will help your Total Debt Servicing Ratio (TDSR). When it comes time to buy your flat, your loan repayments are capped at 60 per cent of your income. This includes all your loans, including the intended home loan and your car loan, credit card loans, etc. So if you pay down these other loans early, you are more likely to be able to buy the house you want. *An exception is if you have a personal instalment loan, with fixed repayments. There may be a prepayment penalty if you try to pay off these loans early – these penalties might mitigate any savings you get. Compare the cost of prepayments to the amount you would save.
2. Expand Your Insurance Coverage or Payouts
Insurance policies provide protection and can also act as savings plans. If you don’t like to invest yourself, you may want to consider enhancing your insurance. Even a S$100 increase to premiums can result in significantly better coverage. You may be able to upgrade to a policy that covers hospital stays in a better ward, for example. You may also be able to add riders that cover you in the event of accidents, or include riders that mitigate the need to buy travel insurance in future (e.g. a rider that makes your insurance apply even in places you travel to). If your insurance plan has a savings component (it grows your money), raising the premiums can mean a much bigger payout for an endowment policy. The exact amount will vary based on your plan, but it’s worth speaking to your financial planner about. Investing an extra S$100 or more can be enough to cover your children’s tuition fees, or provide for a more comfortable retirement.
3. Build Your Emergency Fund Sooner
An emergency fund consists of about six months of your income. Emergency funds are used to pay for unexpected costs, or to provide for you in the event of illness or retrenchment (remember, even insurance policies may take some time to give you a payout). Having an emergency fund removes the need to use expensive loans when you need cash urgently. The sooner you finish building the emergency fund, the sooner you can put more into retirement planning. Alternatively, if your retirement plans are well in place, building the fund sooner means you will have more discretionary income for vacations and shopping.
4. Enhance Your Retirement with Passive Investments
Now that you have more cash, consider passive investments, such as savings bonds (appropriate if you are older), or blue chip shares and index funds. These are simple investments, which do not require you to trade (i.e. You do not need to time the market, and buy and sell to make a profit). Singapore Savings Bonds (SSBs) provide savings at a higher interest rate than the bank, with the flexibility to withdraw at any month. Blue chip shares and the Straits Times Index Fund can be acquired for as little as S$100 a month – this service is available from participating banks such as OCBC and POSB. But remember not to buy anything with advice from a professional – you can get help if your bank offers wealth management services (this comes with certain types of bank accounts, or premiere banking). Alternatively, speak to an Independent Asset Manager (IAM), or a licensed financial planner.
5. Upgrade Yourself
With the Skills Future programme in place, you already get S$500 to buy training courses. Don’t settle for your current raise – aim to get another one. Combine your new income with the government freebie, and get certified in the right skills. Remember to check with your employer first though. You don’t want to waste money on a course that isn’t relevant to your career, or that will have a minimal impact on your job prospect. Ask your boss what skills the company most values or needs. You should also consider building soft skills, such as leadership or expression skills, which are often needed in higher management.

Tuesday, June 21, 2016

Charge Cards Versus Credit Cards In SIngapore: What's The Difference?

Even if you qualify for a charge card in Singapore, a credit card might suit you better. We often don’t use the term charge card and credit card interchangeably – which is good, because there are many differences between the two. Charge cards are often an option for those with higher income and credit scores, and they provide a different range of benefits. However, even if you qualify for them, you may want to contemplate if you truly need one. Depending on your spending habits, a credit card might suit you better. What’s the difference between a Charge Card and a Credit Card? In both cases, they allow you to purchase things at a discount, earn reward points, give you cashback, etc. The key differences are:
1. Charge Cards Have No Credit Limit
Credit cards in Singapore typically set a credit limit of two or four times your monthly income. Alternatively, you can fix your own credit limit on the card. For example, your children have supplementary cards, you can request for the bank to cap the credit limit at half your monthly income, so you can control their expenses. Charge cards do not normally have a limit. Once you have obtained a charge card you could – in theory – swipe it to buy a whole house. But note that charge card limits are not truly unlimited. Beyond a certain point, the card issuer will block further credit. This is either a pro or a con, depending on how much self-discipline you have. For those who are a spendthrift, a charge card can be disastrous as it’s easy to rack up a monstrous bill. For those with self-discipline, it is convenient not to have to worry about credit limits. That said, we are hard pressed to think of a situation where a credit limit is inconvenient. It’s not common for a cardholder to buy something that costs two to four times their monthly income anyway.
2. There is No Variable Repayment for Charge Cards
Credit cards allow you to make variable repayment. This means that if you don’t repay your credit card in full, you need only pay a minimum amount. This amount varies from card to card, but it’s somewhere around S$50 or three per cent of the amount owed, whichever is higher. Any remaining sum is subject to interest, at 24 per cent per annum. Charge cards require you to repay the amount owed in full. There is thus no “interest rate” associated with a charge card. There are, however, harsh penalties for failing to repay the full amount. In some cases, this will lead to further transactions on the card being blocked, with interest charged on the outstanding amount. The interest rate on a charge card can be extremely high, often up to 30 per cent per annum. Late payment fees also tend to be higher for charge cards – around S$65, as opposed to around S$45 for late payment on a credit card. Some cardholders consider this to be an advantage, as it forces them to be disciplined and repay the full amount. At, we advocate repaying the full amount even on a credit card, in order to avoid interest.
3. Charge Cards Have High Annual Fees
Charge cards are expensive. The American Express Platinum Charge card famously costs USD $450 (around S$610) per year. This is much higher than a typical credit card, which might cost around $130 per year. Some credit cards even have a lifetime waiver on the fee, such as the ANZ Switch Platinum Credit Card.
4. Credit Cards are Easier to Get
Charge cards tend to be invite-only, whereas anyone can apply for a credit card. In other words, unless a card issuer sends you a letter inviting you to apply for a charge card, you cannot get one. Charge cards are only offered to people who maintain high credit scores over a course of several years. This is necessary, as a charge card has no preset spending limit. The issuer must be sure the cardholder is responsible. Anyone who has a record of defaults or late payments will probably never get one. In addition, charge cards are often offered to those with a high income, such as S$15,000 per month or more. To check your current credit report, you can pay S$6 to the Credit Bureau Singapore, or take advantage of’s free credit report offer. If your credit report shows anything other than A, you will have to build up your score before standing a chance. If your credit report shows anything other than A, you will have to build up your score before standing a chance. Credit cards can still be obtained if you have a less than perfect credit score (it varies on a case by case basis). Most credit cards are available to you if you earn around S$30,000 per annum or more.
5. Charge Cards Have More Exclusive Perks
Where charge cards have a clear lead is in the area of perks. American Express is most famous for its charge card privileges. The services include a 24-hour global concierge service, which can get you anything from an air ambulance to a restaurant booking in Paris in minutes. The Amex Platinum Charge card, for example, offers a free Far Card Gourmet Membership worth $598, and access to luxury lounges in over 800 airports worldwide. Perks like these are one of the reasons for the higher annual fee. These days, however, credit cards come close to charge cards in terms of reward points, cashback, and other privileges. Its credit card counterpart, the Amex Platinum Card, also has a Far Card membership worth S$425 and perks like complimentary green fees at golf courses across Southeast Asia.

Choose the Card That Best Suits Your Spending Habits
Always match the card to your spending. If you have a tendency to overspend, it’s better to avoid a charge card even if you can get one. The combination of no spending limits, plus harsh penalties for not repaying in full, can lead to expensive consequences. Credit cards, despite their also high interest rates, are more forgiving in this regard.

Saturday, June 18, 2016

8 Ways To Save Money On Hari Raya Festivities In Singapore

Singapore’s bazaars and malls bustle with extra activity in the weeks leading up to Hari Raya Puasa. From sumptuous dishes to new clothes, there are a number of things families need to plan for the great feast. While preparing for Eid often means looking your best and redecorating your home, you don’t want to lose control over your finances doing so. Here are ways to enjoy the Hari Raya festivities without spending beyond your means.
1. Make Reservations with Caterers Now
If you aren’t preparing the meal yourself, don’t delay in making reservations with caterers. Most caterers will only accept orders up to one week before Hari Raya, at a first-come-first-serve basis. If you can manage to find a caterer who’ll take your order at the last-minute, you can expect to pay a hefty surcharge for late reservations.
2. Use a Cashback Credit Card If You Dine Out
It’s expensive to dine out for Hari Raya, and credit cards’ 1-for-1 deals or discounts don’t apply on public holidays. But if you must make restaurant reservations, save money by using a dining credit card that gives generous cashback. Try the ANZ Optimum World Card, which gives 5% unlimited cashback on dining with no minimum spend requirement. So if your Hari Raya dinner ends up costing S$400, you save S$20. 
3. Redecorate with Curtains and Throw Pillows
Craving change? Buying new furniture isn’t the only way to breathe life into your home. You can achieve maximum impact on a small budget by updating your window treatments. New curtains may not even be needed. Simply extending the curtain rod three to six inches wider than the window frame makes the window look wider and lets extra light come in when the curtains are open. Check out this guide for inspiration on window treatments to try. A new set of throw pillows can refresh your living room. Instead of getting identical matching sets, create a more modern look with a mix of patterns and solids in complimentary colours. Here are some more ideas on redecorating with throw pillows.
4. Check Your Credit Card for Shopping Deals
Some credit cards offer small discounts at your favourite home and living stores. For example, Citi Rewards cardmembers get 15% off HipVan and 12% off Naiise, while other Citi cardmembers get 10% off both stores. Meanwhile, UOB cardmembers get 15% off designer lighting at, plus 3 free rolls of wallpaper with a minimum purchase of S$1,000. And until 30 June 2016, UOB cardmembers get 25% off Ensogo.
5. Buy Kuih Raya in Bulk
Take advantage of the Ramadan bazaars and buy buih raya in bulk. For under S$100, you can get several kilos of kerepek, tumpi, and other kuih raya in different colours and textures. Keep them in white bowls and place them on side tables for your guests to snack on when you break fast, or use them as centerpieces on the dining table during Eid.
6. Use the Right Credit Card for Groceries
If you are preparing the feast, you can save a lot of money on groceries with the right cashback card. The UOB Delight Card gives an 8% rebate at Cold Storage, Market Place, Jasons, Giant, and Guardian, with a maximum rebate of S$50 a month. This means you can save as much as S$40 if you spend S$500 on groceries every month. Save even more with the card’s 10% discount on all house brands at Cold Storage and Giant. For those who prefer shopping at Sheng Siong, the POSB Everyday Card gives a 5% rebate at your friendly neighbourhood supermarket.
7. Mix and Match the Previous Years’ Baja Melayu or Maju Kurung
With Ramadan coinciding with the Great Singapore Sale, there are a number of tempting deals on Muslimah fashion and traditional clothing. But if you’d rather not spend on new clothes, you can still look your best by mixing and matching your baja melayu or maju kurung from Hari Rayas past. Find the perfect combination by taking out all the baja melayu or maju kurung in your wardrobe. Watch out for colours and patterns that compliment each other, then try them on. By doing this, you can come up with at least two outfits for the different days of Hari Raya.
8. Open a Savings Account for Kids
With kids receiving a handful of duit raya or green envelopes this Hari Raya, there is no better opportunity to teach them healthy money habits. Together, open a child’s savings account, and make a yearly ritual out of visiting the bank after Hari Raya to deposit 80% of their duit raya money. Use this moment to explain how interest rates make their money grow, and encourage your child to deposit part of their allowance into the bank account each month. Talk about all the exciting things your child can do with the money in five years if they keep up their savings habit. By showing a positive attitude towards saving and coinciding it with a special occasion, children are more likely to remember these lessons and carry good money habits with them for life.

Friday, June 17, 2016

10 Money Survival Tips For Singaporean Tourists In New York

Here’s how Singaporean tourists can avoid getting ripped off in New York City. This is the first article in our Money Survival travel series, where we show you lesser-known ways to enjoy visiting expensive cities without breaking your budget. It’s the holidays, and if there’s ever an opportunity for a big trip abroad this is it. Thanks to movies and pop culture, many Singaporeans dream of visiting New York City. While a trip to the Big Apple is worth doing at least once, it’s also an expensive place to be a tourist in. So based on the real experience of staff, here are some ways to stretch your dollar as a tourist in NYC:
1. Go Cashless
In case you didn’t know, US dollars don’t have a denomination bigger than a hundred. So if you bring a few thousand dollars for a vacation, you will be walking around with a thick stack of money. It is quite visible to everyone, including potential criminals. For this reason, it’s suggested that you minimise your reliance on cash. Use a credit card or debit card, and always have the bank’s number to call in an emergency.
2. Insist On Using Yellow Cabs at the Airport
If you land at John F. Kennedy airport, you will be approached by private drivers at the exit. They can be aggressive, coming straight up to you and asking where you’re going. They won’t even wait for your agreement before grabbing your bag, and leading you to an unmarked cab. Never go with these people. Their cabs are often unlicensed, with no meters. They will attempt to price gouge you, and tourists have lost amounts around S$200 or more. Once you are on the road in the middle of nowhere, you are at their mercy. Always insist on using the marked yellow cabs, even if the line may be long.
3. Actually, Use the Subway, and Don’t Cab at All
New York has a grid system that makes navigation by walking easy, and the subway is accessible from most places. The subway is a little more complicated than our MRT, but if you are too lazy to learn it, just ask the locals which train to get on. Note that the Subway operates 24 hours. So if you are on a tight budget, you can avoid using a cab even after getting back from a club at 2 am. Most tourists will do well to get a seven-day unlimited ride card. This is about S$42, and as the name implies, you can ride the train as often as you like. By comparison, cab fares in New York City are expensive. They are about 68 cents for every 321 metres, and 68 cents for every minute when the cab is stopped in traffic. On top of that, it is appropriate to tip the cab driver 15 per cent. A cab ride to John F. Kennedy airport has a flat rate of about S$71. Ouch. If you don’t have too many bags, forget that hefty fee and just ride the train there.
4. Don’t Get Ripped Off by Prepaid Sim Cards
You will probably want an unlimited data and calling bundle. The good news is, many American companies like T-Mobile and A T&T have prepaid sim cards, which will give you these features for a month. The cost is around S$130. However, review the company before buying – some sim card deals are practically a scam. The Ultra-Me prepaid sim card claims to be “unlimited”. But when you hit a certain level of data use, you are asked to top up or get a lower connection speed. This “lower speed” is so slow, your device will be practically unusable. This results in buying yet another sim card. So check the online reviews before buying.
5. Don’t Buy Tickets from Street Level Vendors
For many iconic landmarks, such as the Empire State Building, you will have to buy tickets to go to the top. These are around $72, for the Empire State Building and One World Trade Centre. The lines tend to be quite long (during peak hours you could be queuing for an hour or more). As such, some tourists try to take a shortcut and buy from street level vendors outside the actual ticketing office. While some vendors are reputable, there have also been scams pulled on tourists. Sometimes there are fake vendors who have a uniform and lanyard – they’ll sell you “tickets” which are just useless bits of paper. By the time you reach the end of the queue (and are barred entry for having fake tickets), they’ll be long gone.
6. Use Citi Bikes to Get Around for Cheap
Citibank runs a Citi Bikes program in New York City. There are numerous stations where you can use your credit card to unlock a bicycle – ride them wherever you want, and leave them at the next bike station when you are done. It’s about $12 for a day pass, or S$24 for a three day pass. The first 30 minutes are free, and each 15 minutes after that costs around $4. If you are going through Central Park, or want to travel without using the train (you’ll see more of the city), then this is one of the most cost-effective methods. However, your credit card must be enabled for overseas use, as you’ll need it to unlock the bike. A security deposit of around $137.30 is deducted from the card, and returned when the bike is docked at the next station. This counts as retail spend, so be sure your card gives you air miles or other perks for overseas spend! Bonus Tip: Rack Up Air Miles with Your Credit Card: If you’re going to use a credit card for most of your trip, use an air miles card with a high earn rate for overseas spend. This fast tracks the number of miles you earn towards your next trip.

Wednesday, June 15, 2016

How To Afford A New Designer Bag In Singapore Every Year

Here’s how to get first dibs on the latest It Bag in Singapore without buying second-hand or giving up lattes for life. With extravagant price tags often higher than your monthly salary, buying your first designer bag is a major commitment. Typical advice on saving for your first luxury purchase include not dining out and staying in on weekends. But what if you’re a serious fashion girl who needs to have this season’s It Bag straight from the runways, every year? If you follow the same advice, doing so means giving up lattes, cooking your own lunch, and not having other nice things for life. Saving for a pricey purchase doesn’t have to be painful. While you’ll certainly get there faster without coffee and pedicures, you can have your designer bag and your latte too, if you’re clever. So here’s how you can afford every year’s It Bag without skipping Starbucks, going into debt, or buying second-hand.
1. Decide What You Want and How Soon You Want It
Before building your Bag Fund, you must decide which bag you want. Knowing what you want helps you lock in your savings goal, and how much you can reasonably set aside for it each month. Let’s say you’ve got your heart set on the Prada Saffiano Tote, which retails for about S$4,317 with GST. And you want it soon – like, in 3 months. This means you need to save S$1,437 per month. It’s easy to do this if you live with your parents and are willing to scrimp on a bit of fun. But if you’re earning less than S$4,000 each month and paying for your living expenses, saving S$1,437 is going to be tough. In this case, you need more time to build your Bag Fund. So if you save for a period of 6 months instead of three, you only need to set aside S$720 each month. And if you give yourself a year, you can save S$360 a month.
2. Automate Your Savings
It’s tough saving on willpower alone. Don’t spend your pay cheque and expect to have a few hundred dollars at the end of the month for your Bag Fund. Instead, you must automate your savings and get the money out of sight as soon as possible. As soon as you’ve determined how much to save each month, open a second savings account for your Bag Fund. Then set up a GIRO system to funnel cash into it every month. Schedule the transfer the day after payday so you don’t get tempted to use the money for something else. Don’t even think about the money in your Bag Fund until you’re actually ready to make the purchase.
3. Get a Side Hustle
To fast-track your savings, get a side income job and place every single dollar you earn into your Bag Fund. If you want to make money fast, avoid being too picky about the job. Many side income opportunities will be unglamorous and unrelated to your main skills. For instance, you may be a certified public accountant, but if your auntie will pay you to help out with your cousins’ math tuition, do it.
4. Sell Your Stuff
Make space for the new by selling off the old! If you’re upgrading to a new bag, now could be the time to auction off last season’s satchels. Or if barely-used clothes are taking up precious closet place, there’s bound to be someone else who wants them. Carousell awaits.
5. Use a Credit Card’s 0% Instalment Plan…
If you really can’t wait until you’ve saved the full cash amount, you can use a credit card’s 0% instalment plan to start paying for your bag. The LuxePay Plan from UOB Lady’s Platinum Card is designed exactly for this purpose. Any shoe or bag purchase worth at least S$500 can be split into a 6- or 12-month instalment plan, with no interest or processing fees. However, you need to make sure you are able to pay your bill in full and on time each month. Credit cards have compounding interest rates as high as 28%. This means any unpaid balance grows everyday and becomes increasingly difficult to pay off the longer you leave it untouched. This is why it’s important to develop budgeting skills, impulse control, and other basic money habits before getting a credit card. Skip this option if you can’t trust yourself to use plastic responsibly.
6. …But Save an Emergency Fund First
Before using your credit card, make sure you’ve saved at least 3 months’ worth of instalment payments first. This lets you keep up with the monthly payments in case you lose your job or some other financial disaster gets thrown your way. Besides avoiding debt, an emergency fund ensures that you won’t have to sell your beloved purse in case the worst happens.
Must I Really Save Money?
No one can succeed financially without learning to manage their money and delay gratification. So even if you’ve got credit at your disposal, make the effort to build your Bag Fund first. The fact is that you’ll need to pay for what you buy; either you pay now in cash, or pay later on credit. Both approaches require basic money management, especially if you choose the latter.
By being clever with your money, you can easily come up with cash for luxury purchases without downgrading your lifestyle or being forced to resell your hard-earned It Bag shortly after buying it.

Tuesday, June 14, 2016

5 Questions You'll Regret Not Asking Before Buying Your First Flat

Ask yourself these 5 questions to see if you’re ready to buy your first flat (and get your first mortgage) in Singapore. Buying your first flat in Singapore can be a nerve-wracking experience. For most of us, it will be the only time we end up taking a loan that lasts 25 years. It’s a big step, so you’ll want to make sure you take some precautions. The more time you spend understanding loans, the fewer tears you’ll cry if something goes wrong. Ask yourself these five important questions to see if you’re ready for your first mortgage:
1. Have You Paid Off Your Debts?
When taking a home loan, the loan quantum (the amount you can borrow) will be restricted by your Total Debt Servicing Ratio (TDSR). This is the percentage of your income used to repay all your loans, inclusive of car loans, education loans, credit card loans*, etc. The TDSR is capped at 60 per cent. For example, if you earn $5,000 per month, the maximum debt repayment you can take on is $3,000 per month. If your loan repayments would exceed this amount, you will have to borrow less. That can mean having to fork out more money for the down payment, or not getting the home you want. For this reason, you need to repay as many major loans as possible before getting a home loan. In addition, you should avoid taking further big loans in the year or two leading up to a home loan application. For example, do not take up a car loan until after you have secured the home loan. Besides freeing up your TDSR, this will improve your credit score. *For loans that allow variable repayment, such as credit cards and lines of credit, the minimum sum repayable will be used to determine the TDSR. This is usually $50 or three per cent of the amount owed, whichever is higher.
2. Do You Have a Good Credit Score?
Both HDB and the bank will check your credit score when you apply for a home loan. The credit score, along with your TDSR, is used to determine your Loan to Value (LTV) ratio. The LTV determines the percentage of the home price that you can borrow. This is up to a maximum of 80 per cent for banks, and 90 per cent for HDB. If you have a bad credit score, such as a C or D (delinquent payments) or past defaults, you will often get less than the full LTV. This can significantly raise the down payment required. For example, say the bank considers your credit score unsatisfactory, and will only loan you 70 per cent of the house value, rather than the full 80 per cent. On a condo with a value of $800,000, the bank loan is just $560,000. You would need almost a quarter of a million dollars ($240,000) in down payment due to your bad credit score. If you currently have poor credit, you can mend it by taking small loans, and paying them back reliably. For example, you could pay through a credit card for a year (this means repaying the full amount charged to the card, every billing cycle). You could also get small personal loans, and ensure that you make all repayments on time until the loan is paid off. Note that, if your credit report shows you have been bankrupt before, you will usually have to wait five years from receiving your official letter of discharge to obtain a loan. Some foreign banks may require seven years.
3. Did You Compare the Different Home Loans in Singapore?
There can be as many as 50 different home loan products available at any one time. After all, there almost 200 banks and financial institutions active in Singapore. It is important to pick the home loan that has the lowest rate. In general there is no advantage in getting a more expensive home loan. You don’t get privileges or rewards for accepting a higher interest rate. On any given month, only two or three of the banks will be offering the cheapest loans. To find out which banks these are, you should engage the services of a mortgage broker. A mortgage broker will gather the loan information for you, usually for free (they are paid referral fees by the bank). Do not simply take a loan from the first bank you come across. Due to the large sums involved in home loans, even small differences of 0.3 to 0.4 per cent can mean hundreds of dollars more each month.
4. Are You Buying a Flat You Can Afford?
As a rule of thumb, you should only get home that costs up to five times your annual household income. For example, if you and your wife both earn $48,000 per year, your annual household income is $96,000. This means you can comfortably afford a house that costs up to $480,000.
Do not take the biggest loan you can get, even if a bank is willing to loan you enough for a flat that costs $600,000 or more. The more expensive the house is, the greater your financial burden. After all, you will have to make bigger mortgage payments every month. In any case, neither banks nor HDB will give you a loan if repayments would exceed 60 per cent of your monthly income. (See the first point about your TSDR.)
5. Do You Have an Emergency Fund?
At SingSaver,, we advise that everyone build up an emergency fund of six months of their income. However, if you intend to buy a house soon and haven’t got one, you may not have enough time to do so. In this case, speak to the bank or a mortgage broker to find out what the loan repayments are likely to be. Note that the repayments may change every month, if you are on a one-month SIBOR rate (the mortgage broker can explain these interest rate periods to you in greater detail). You should try to save enough money to pay the mortgage for at least three months. In case of emergencies such as retrenchment, you will have time to find a new source of income. In a worst case scenario, it buys you time to sell the house at a good price.

Saturday, June 11, 2016

4 Ramadan 2016 Iftar Buffet Deals In Singapore

Here are delicious and affordable iftar buffets to buka puasa (break fast) in Singapore. Ramadan 2016 has officially started, but there’s still plenty of time to plan iftar sessions with your family and friends. When it comes to halal food, Singaporeans are spoilt for choice, with a dizzying variety of traditional and modern restaurants to choose from. If you want to break fast somewhere other than at home or your favourite restaurants, here are Ramadan dining deals to consider, and the credit cards you can use to save even more.
1. Iftar Seafood Buffet at Atrium Restaurant, Holiday Inn
If you like seafood, you’ll love the halal iftar buffet at Atrium Restaurant. Indulge in a mouthwatering selection of fresh oysters, Goan fish curry, salted egg crayfish, and Atrium’s special roasted lamb leg, plus free-flowing lemon tea and iced bandung to wash your meal down. Enjoy a special one-on-one deal if you book now! American Express Platinum cardmembers can use their Palate Dining Privileges to get the following discounts on the buffet: 50% off for 2 persons dining, 35% off for 3 persons dining, 25% off for 4 persons dining, and 20% off for 5 – 20 persons dining. Note that these discounts are not available on Father’s Day, public holidays, and eve of public holidays. Promotion Details: From 6 June 2016 – 6 July 2016. Sun-Thur: S$78++ / Fri-Sat: $$88++
2. Kintamani Indonesian Restaurant, Furama RiverFront
Head to the Kintamani at Furama RiverFront to break fast with their delicious Indonesian buffet. With specialty dishes like kebab ayam (grilled chicken shawarma), roti jala kari ayam (roti with chicken curry), paha kambing bakar (grilled lamb leg), and ketam sambal (chili crab), you may never want for food for days. UOB cardmembers enjoy a 1-for-1 buffet lunch and dinner at Kintamani until 31 Jan 2017. We recommend the UOB YOLO Card, as you get an 8% rebate if you dine on weekends and 3% rebate if you dine on weekdays. ANZ cardmembers also get a 1-for-1 buffet deal until 31 Jan 2017, plus 15% off the total bill. If you’re trying to rack up air miles, use the ANZ Travel Visa, which gives you 1.4 miles for every S$1 spent in Singapore. So if four adults dine during iftar and you use your card to pay, you get around 261 miles! Promotion Details: From 6 June 2016 – 6 July 2016. Buffet Lunch: $50++ (Adult), $16++ (Child)* / Buffet Dinner: $55++ (Adult), $20++ (Child)* / *Child is from 5-11 years old. Not applicable for 1-for-1 credit card promotion.
3. Ramadan Buffet at breez, Grand Mercury Roxy
At the 4th level of the Grand Mercury Roxy is breez, which has a lovely al fresco dining option and a Halal-certified kitchen. Dine on a selection of appetising treats like udang masak lemak nenas (curry prawns with pineapple), ayam lemak cili api (chicken in a rich and spicy coconut stew), and assam pedas ikan pari (stingray in spicy tamarind). Don’t forget to stop by the new carving station and fill up your plate with bumbu bali lamb (Bali-style roasted lamb), ikan bakar (seabass fillet with the Chef’s special sambal sauce), among others! Promotion Details: From 6 June 2016 to 5 Juy 2016. Available from 7.00 pm to 10.30 pm daily. $38.00 per Adult, $19.00 per Child, $32.00 nett per Pioneer.
4. Iftar Dinner Buffet at StraitsKitchen, Grand Hyatt Singapore
If you want to savour something other than Singaporean favourites, head to StraitsKitchen at the Grand Hyatt Singapore to sample flavours of Asia. Their iftar dinner buffet features a delicious spread of dishes from India, Indonesia, Turkey, Saudi Arabia, and Lebanon, all carefully prepared in their Halal-certified kitchens. Club at the Hyatt members enjoy their usual 50% discount on this Ramadan special. Promotion Details: From 6 June 2016 – 6 July 2016.  Lunch buffet – Mon to Fri: 12:00 pm to 2:30 pm; Sat, Sun and Public Holidays: 12:30 pm to 3:00 pm. SGD 52++ (for adults) including selected free-flowing juices, tea and coffee. SGD28++ (for children ages 7-12) including selected free-flowing juices, tea and coffee. Iftar dinner buffetMonday to Sunday6:30 pm to 10:30 pm. SGD 78++ (for adults including selected free-flowing juices, tea and coffee, SGD42++ (for children ages 7-12) including selected free-flowing juices, tea and coffee.
5. Ramadan Iftar with Celebrity Chefs at The Landmark
Feast on a sumptuous spread of over 35 Western, Meditteranean, Asian and Indian dishes at The Landmark, Village Hotel Bugis. Each dish is cooked to perfection by celebrity chefs Bob and Amri Azim, while a selection of live seafood ensures you get the freshest catch. Unlike most restaurants, The Landmark has a prayer room where you can do your Maghrib prayers, which makes buka puasa truly meaningful. Promotion Details: 6.30 to 10.30pm daily (until July 27). First Session (6pm to 8pm): $35++ an adult, $15++ a child (Monday to Thursday), $45++ an adult, $20++ a child (Friday to Sunday). Second Session (8.30pm to 10.30pm): $25++ an adult, $15++ a child (Monday to Thursday), $35++ an adult, $20++ a child (Friday to Sunday).