Top 5 Useful Tips on Handling Your Finances Better

Are you the kind that spends before saving?

Or are you someone that saves a certain amount before spending?

I was the former, but I am the latter now.

I didn’t have much thoughts on how much savings I had before. However, after internships and taking a gap year working other jobs, seeing my money grow in my bank made me realise how much MORE I could have saved!

Starting out small was the way for me. I’d usually tweet (on my private account) ‘Aiming to save 50% of my salary this month’. This way I had a goal in mind by typing it out.

Do you realise sometimes, things don’t really go accordingly to the way you want when you’re just thinking it in your head?

Lol, I noticed if I type it down or write it down somewhere, it stays embedded in my head for longer.

By the way, you might be thinking, “How does she save 50% of her salary? Doesn’t she pay her bills?”

Well, I don’t. I am still living with my family and my mother usually cooks before or after my work. So unless there’s a meetup with friends or colleagues, I get my butt home for dinner.

Before I divulge too much, let’s begin!

My Top 5 Useful Tips on Handling Your Finances Better

1. Set a suitable budget for yourself

Save before you spend!

If you’re a student and are receiving allowances, see if you can save 1/4 of it first. If you can do that, try increasing the amount of money you save up in your bank.

Do it slowly but don’t force yourself to eat unhealthy food just so you can save. Health comes first.

If you’re working, I advise you to try and see if you can save 30% of your salary after calculating the bills you have to pay.

Deduct the fixed bills first, as these are the necessity. They includes loans, credit card bills, electricity and household bills.

Increase the saving percentage if you realise you can hit it easily and slowly work your way up.

Related post: Shopping: Is it a Want or a Need?

2. Get a money manager app and put that budget down

I use this app called ‘Money Manager’ with a red background and white pig in the centre (iOS). But I realised it’s not found in the App Store anymore although I can still continue using it. Download and try a few apps to see which you prefer.

I like the ones where I can choose to categorise my expenses and incomes. Don’t buy the pro version of it while looking for one though.

Set a monthly budget that you will try not to exceed. Say you have $400 as allowance (and want to save 1/4 of it), put $300 as your budget but $400 as a source of income (I name it allowance).

Make sure to put every single thing you buy into the app, that way it’ll be accurate. To ensure I don’t forget, my app has an alarm that reminds me to put down what I’ve spent on for the day at 10pm every night.

At the end of the week, or month, compare and see what did you excessively spend on via the categories.

For me, it’s always food LOL.

Related post: Couple Finance: Who should REALLY foot that bill?

3. Find the best savings account in your country

If you invest, I’m sure you have your own backup plan. This tip might not apply to you.

But if you don’t invest, in order to beat inflation, you got to get the best that you can.

The banks here in Singapore don’t give much for monthly interests. It’s usually 0.05% or 0.02% per annum. If you have $1000 in that bank, you only get $0.04 per month. Pathetic right? Therefore, finding the one that gives you the most interest rate is the way to go if you’re not the investment kind of person.

Currently, I am a user of the CIMB Bank Fastsaver Account and it gives 1% per annum. (For Singaporeans/PRs and Malaysians)

No monthly fall below fees, no need to fulfill $___ spendings in a month, just an initial deposit of $1000.

(NOT affiliated lol, I just like sharing these kinds of tips)

Anyway, you put that $1000 back into the example. With 1% per annum of interest rate now, it gives you back $0.83 cents.

Guys! It’s $0.80 more than the previous example of $0.04 per month.

Plus, if you’ve been working for quite a while and haven’t utilised such savings account, you probably have a lot more money in your bank than just $1000.

Imagine, you have $10,000, you just keep adding your savings into that account, don’t touch it unless necessary and you’ll be raking in at least $8.30 each month. (Remember, this is for people who don’t invest in anything)

It’s not a lot but it makes a difference. The only downside to this savings account is that it drops to 0.60% per annum after you have $50,000 inside.

Though, you shouldn’t really leave $50,000 inside because by the time you earn that amount, I’m sure you can sign up for credit cards that give you a higher interest rate. Make use of that. Which brings me to the next point!

4. Apply for a credit card that you can afford

This only applies to people who have a job. I doubt credit card companies give you a credit card unless you’ve got a job or maybe you’ve got a supplementary card.

Before signing up for one, make sure to read the fine print of the terms and conditions stated before anything. Ask if you’re unsure.

Give a real scenario of what-ifs to your bank so that you know what you should do and what you shouldn’t do. They have to keep things confidential so don’t feel like you shouldn’t share.

However, don’t fall for their traps of applying for something you don’t want. Do your research and read reviews if there are. Ask friends or family for their recommendations.

Word-of-mouth recommendations usually never fail.

5. Start investing

Why do I talk about investment here? You can see it as taking a portion of your monthly salary every month to ‘save’ except that you’re investing in something for the long run.

Investment might seem like a big thing to some people. It’s not. I think it’s just what we see on TVs and dramas. Not all investments are high risk.

I personally do ETF or Exchange Traded Fund.

What is the difference between a stock and an ETF? (Quoted from fool.com)

“ETF stands for exchange traded fund, and just like a stock, it is traded on stock exchanges such as NYSE and NASDAQ. But unlike a stock, which focuses on one company, an ETF tracks an index, a commodity, bonds, or a basket of securities.”

As ETFs own a basket of stocks, if the stocks do distribute dividends, you will also end up getting dividends. I currently get dividends every 6 months but it could be different in your country.

I’m investing in the POSB Invest Saver ETF now (if you’re a Singaporean and wants to know).

There are a lot of blogs talking about the good and bad of ETF but the reason why I decided to go with it, was due to the fact that I can invest as low as $100 per month. I have increased it to $200 now but if you have the means to, you can invest more.

If you don’t want to go through a bank to do it, there are robo-advisors who do the work for you. You can apply through a mobile app or on their website.

These are a few that I know of, and might invest in the next time:

1. AutoWealth (Does not accept US Citizens and Residents)
2. StashAway (Available to all)
3. Smartly (All Singaporeans, Permanent Residents, Foreigners aged 18 years old and above; have a local bank account, and currently residing in Singapore)

If I’m not wrong, they invest in other countries’ ETFs (example: USA) too. This way, you can diversify your ETFs and go into a wider range of stocks.

Keep in mind that ETFs are meant to be long-term investments and do not give you high returns right away. Obviously there are always risks, though I feel it is of a low risk, and benefits like dividends. I am keeping mine for 5 years to see how it goes.

Even if you’re still wary of investments, do try to research up on it. No harm learning more!

That’s all the tips for today, I can actually write more but I’ll leave it for next time!

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Any tips you have that you want to add on? Did you learn something from this? Let me know because I like to be useful lol.

With 💕,,

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