Do you find yourself staring at a static bank balance at the end of every month? When it comes to growing your savings for the long term, here are simple ways to get started.
With the rising cost of living, working adults in Singapore have it tough. Besides living expenses, there are countless financial obligations — a hefty mortgage, for example — that make saving up difficult.
While most of us have Central Provident Fund (CPF) payouts when retirement comes, the monthly amount may only be enough for necessities. And for your hard work over the years, you deserve a lot more, which is why we are sharing these easy ways to grow your nest egg:
- Question your Habits
We know it’s hard to compromise on that daily latte. But it’s the small things that really add up. Lose what you don’t need but are still paying for — such as ending a subscription service you’ve not been using.
And when you get into the groove of cost cutting, you’ll even look at your latte habit and be tempted to work on that, too.
- Rethink your Credit Card
Here’s a credit card tip: nothing you spend on it should be on credit. This means if you want to buy a gadget using your card today, you should have the budget for it in your bank account right now.
Yes, it does defeat the purpose of a credit card — but that’s the whole point. Minimising debt, even temporary debt in the form of card balances, frees you from the invisible chains that hold you back from saving.
- Clear Out your Bank Accounts
Banks will never admit it, but money sitting in savings or fixed deposit accounts usually declines in value over time with inflation. Furthermore, to save enough for your retirement, what you need is a potential rate of return that is substantially higher than inflation.
- Consider Stocks, Carefully
The main worry about investing in potentially high yield products like stocks is the unpredictability — investors can lose their capital even if they do their homework.)
But products like the exchange-traded fund, or ETF can offer fewer risks. By buying an ETF, investors may be able obtain steadier returns due to diversification. ETFs, however, do not guarantee your capital and remain exposed to financial downtrends such as recessions.
- Save and Grow with an Insurance Savings Plan
Insurance providers now offer plans that grow your money while providing insurance coverage. These plans typically offer higher returns than bank interest rates and low-risk investment products such as government bonds. Moreover, many plans guarantee your capital, giving you financial peace of mind.
An example of an Insurance Savings Plan with a retirement focus is PRUgolden retirement, which among other benefits — guarantees a monthly income for up to 20 years at retirement age, a maturity bonus at the end and protection against death and disability. With this plan and your CPF payouts in place, not only will you be guaranteed the retirement you deserve, you’ll also feel secure — starting right now.
Start planning your retirement now.