POSB Everyday Card - How to Save $ with it?

The new POSB Everyday Card has a auto top up feature that's something like the CitiBank SMRT card. Just that from experience, last time when I use the SMRT card from CitiBank, actually it totally didn't give me any rebate because I spend merely $50 using that feature only. So in the end, after 1 use, I decided to just terminate that card since it's quite pointless anyway, I heard that you need to spend at least $600 to get the 2% rebates. And if I remember correctly, there's some activation fee or something that comes along with it.

Now, with the new POSB Everyday Card, it's truly a money saving card that gives me the same 2% rebates without any condition at all. That's what I love about POSB Everyday Card :)

Fyi, Effectively the 2% rebates is just 2% less $0.25 only. So it's not exactly 2%. But it's definitely worth your time activating the feature because you will save money using that. Most importantly, you won't need to top up your ezlink card ever again. Why not save $ and time at the same time with it? That kills 2 birds with 1 stone :P

I've also come to realised that actually it's better to accumulate the Daily$ till it reaches about $10 - 20. Then use internet banking to offset your bills with it. This way, you get to enjoy all the potential rebates from anything that you ever spend on and yet get to use your Daily$ to offset your bill. But of course, you must do that early 'cos generally, it can only offset your next bill that way.

See also: How to Activate POSB Everyday Card's Ez link feature.

Increase your streams of income

Whether you are an employee, self-employed or business owner, or even investors, you can still increase your streams of income. But of course if you are currently an employee, avoid quitting your job before you have any form of passive income just to do things you would love to do more, unless you have enough money to cover your expenses for at least 1 - 2 years. And make sure you plan well before doing that. At least that's the lesson I've learnt.

There are various ways you can have more income, here are some of them for you to think about:

• Internet Marketing
• Network Marketing (aka MLM - Multi-Level Marketing) [You need to join one that you really believe in and likes their products otherwise, it's even harder]
• Freelance [Any form of freelance jobs that you can think of and you are capable of doing]
• Part time jobs [This is the easiest to find of them all]
• Property Investment [Of course, you've got to find one that's worth investing and generates good rental income]
• Stock Investment [Make sure you know what you are investing in, it should be a quarterly reviewed kind of investment rather than actively monitoring it.]
• Some people likes trading [There's forex, commodities, stock options, etc. But I find it risky myself]
• Mutual Fund Investment
• Bonds
• Treasury Bills
• Start a part time business
• Write your own book and sell it!
• Alternative investments [find one that at least give you good returns > 10% is good, do visit invest fairs for more info. But you've got to understand them before buying.]

All the above should be tried out one at a time so that you don't tax yourself too much as concentration and focus is needed in order to succeed in anything! I'm still working on this.

You may want to read Robert G Allen's Multiple streams of income to find out how to implement and get the type of income steam you want.

If you do have debts, create a repayment plan

If you do have debts, such as credit card loan, car loan, housing loan, study loans, etc, start planning which loan to pay off earlier and what to pay off 1st.

Make a list on the type of loan, interest amount in %, amount you need to payback, and look at how much you currently have. After deducting a basic 3 months worth of pay, if you do have anything left, look at which is higher, the highest loan interest or the interest that your excess money is generating you. If the loan interest is higher, use that money to pay off that particular loan first.

Plan which loan you wish to pay off, prioritize the one with higher interest rate to be paid off 1st. Set the deadline to when you plan to pay off all your debts. But for certain loans, it might be better to keep than to pay them off, i.e. housing loan. Why? Because for housing loan, the interest might not be very high, if the interest is low, and you can get better returns if you invest the money you intend to pay off your loan with, you should just keep that loan, and pay off just the minimal amount and earn on the difference in returns. (e.g. investment return % - housing loan interest %, as long as this is positive, you should just keep it.)

Think about it, don't just pay off all your loans for the sake of being debt free, unless you are not generating more money from your excess cash. :)

Reference: The Lazy Girl's Guide to Success: Financial Success, Step 4, Pg 124 - 126

Change the way you pamper yourself!

Image Source: http://www.travelblog.org/Wallpaper

If the way you pamper yourself is costing quite a sum, do consider changing the way you pamper yourself: -

• If you love buying yourself presents, consider buying yourself a more income generating present such as a particular good stock that gives good dividend yield, good investment grade property that gives good rental income, basically, anything that has potential in value appreciation in the long run.
• You can consider strolling at the park / beach to relax after a tiring day.
• Or even sitting by the beach doing nothing but watching the sunset or sunrise when you are feeling down.
• Organize picnics instead of high class tea buffet.
• Delay your purchases that you intend to pamper yourself with for 3 days to a week, if you still wants to buy it, probably you love it very much. Sometimes, it's just a impulse purchase, you may not really want it. Hence, by delaying the process, you might save some money. After all, you will appreciate things more if it's harder to get, or you need to wait longer for it. :)
• Find out when you spend the most and why? Change the mindset when it comes to spending, spend only on pampering stuff when you really needs it rather than as a form of comforting yourself.
• Buy assets that generates you extra passive income, and use this passive income generated to pamper yourself instead.

Reference: The Lazy Girl's Guide to Success: Financial Success, Step 3, Pg 122 - 123

Where and what to cutdown on?

After we have create our budget and tracked our expenses, it's time to make a list on all the non-essentials that you have been spending on for the past 1 month. If you are wondering what's an non-essentials, it just means stuff that you buy but without them, you will still survive and carry on with your life.

Eg.

• Meals out (tea breaks, coffees, high class / expensive lunches / dinner)
• Drinks (alcoholic, can drinks, anything except plain water / mineral water)
• Mobile internet plans
• Books / magazines / papers (unless you can't get them from the library)
• Cinema / DVDs / Videos / CDs
• Gym / Yoga membership
• Presents
• Clothes (except when you really need it or has run out of it, not when you still have tons at home, unworn)
• Beauty and toiletries (including hair) but just those that you've bought but never use or hardly use.
• New laptops / computer / mobile phone (when you still have a working one at home and didn't use that to trade in)

These are stuff that you can cut down on until you have reached a point where you've attained financial freedom, and your passive income is already way beyond your expenses such that you can easily afford all these even without your active income then, by all means get them if you want. After all, there's no point having lots of money but being unable to spend them to pamper yourself once in a while.

Reference: The Lazy Girl's Guide to Success: Financial Success, Step 2, Pg 118 - 121

Creating and Tracking Your Budget

If you are wondering how to create and track your budget, here's a monthly expense tracker but then it tracks your income and expenses every single day. 

Alternatively, a way to ensure that you'll keep to your budget is to withdraw all the cash that you intend to spend for the month and put it into jars, label the jars according to what you wish to spend your money, i.e. Food, Travel, Movies, etc. If you prefer, piggy banks also can. The whole point is not to spend beyond your set budget. Of course for this to work, you must make it a point that when there's nothing left in the jar, either you use the fund from other jars or you stop spending money on the item labeled on the jar itself.

If not you can also use things like having a separate spending account etc, to separate your spending money with your savings so that you will never spend your savings on unnecessary stuffs. So just create your budget and stick to it. :)

Reference: The Lazy Girl's Guide to Success: Financial Success, Step 1, Pg 116 - 118

Where can I find more money to invest?

If you would like to invest and wanted more money to invest in, here's some steps that you may want to consider taking:

1. Create a weekly and monthly budget so that you can track what are you spending on
2. List your non-essentials and find out if you can reduce spending on them
3. Change the way you pamper yourself, do it in a way that requires less money
4. Create a repayment plan that prioritizes your debts (if you have any)
5. Just make more money! Increase your sidelines, or passive income or even your current income :) 

Reference: The Lazy Girl's Guide to Success - Financial Success Chapter.

Getting in the Money Game

When getting in the Money Game, our aim has to be for wealth and success, not just for survival if we do wish to become rich and financially free in future. In fact being contented may be good but it doesn't help in making you rich. 

You have to imagine your life to be what you want it to be and not as what it is currently. Consult people that are already at where you would want your life to be for advice. As successful people loves to share their success stories. Share your dream and vision of your life with your supportive friends and loved ones. It has to be shared with people that supports you so that they will help you along and pull you back on track when you diverge.

Next you will need to set a financial goal so that you know exactly what you want and will be able to get there. See how to achieve your financial goal for more info.

Also, you have to figure out what exactly is your current networth in order to proceed further and become more successful in your money game. See manage your cashflow for the link to the excel file. Find out the amount of money you need to live comfortably per month, it might be your current expenses and start thinking about how you can get that amount of passive income per month.

Most importantly, you have to play to win and not just not to lose. The whole point of playing any game is to win it! Focus on the finish line.

Every financial problem has a solution!

The lesson for today is that for every financial problem, there's always a solution. If there isn't any solution, then it's not a problem. :)
Here's some examples:-

• If you are in debt, work out a debt repayment plan and stick to it!
• Even if you have low salary, you can still spend less than you earn.
• If you feel that you are useless with money, just be more open to learning your way to financial success.
• If you loves to spend money, just think before you spend, wait for at least 1 hour before you buy something you wanted to buy but is not in your plans. If you still want to buy after that, you can then buy it, otherwise, you shouldn't buy it as you'll probably regret.
• If are can't keep accounts, I'm sure you can write down everything that you spend on so that you can track where your money goes to and in time, cut down on unnecessary spending.

If there's financial issues in your life, It's time to take action NOW to improve your life!! :)

Tips on Investing your funds towards Financial Freedom

Here's some tips that you may want to consider with regards to investing the money you've set aside towards achieving financial freedom.

1. Ensure that you have 6-12 months worth of expenses in terms of savings in either money market fund / savings / current account so that it is safe enough and easily available when you might need it. For funds put in money market fund. These money must be in a separate account that you will not touch unless in times of emergency. (Adjust the 6-12 months according to how much security you will want to have, with 6 months being the normal standard and 12 months being more secured / safer.)
   
2. Alternatively to step 1, you can also keep 3-9 months worth of income in terms of savings, provided that your income is at least 30-50% above your expenses. (Adjust this by the amount of security you need)
3. For the above savings, you will need to at least keep about 1 month worth of expenses at all times in cash just in case and put the rest of this fund in somewhere safe, yet easy to withdraw, such as money market fund, high interest savings account, fixed deposit account without premature withdrawal penalty, etc.
4. Invest 90% of the balance in investment instruments that you understand and will be holding for long term, such as undervalued stocks, good dividend yield stocks that has high upside potential, index equity mutual fund, or any trustworthy equity mutual fund, good investment grade property that gives your great rental income.
5. For the remaining 10%, you may invest in high risk / high return instruments, that gives you high potential gain but very high risk as well. This is the amount of money that you are ok to risk with, which means either you get a lot of return or you may lose everything, and you are fine with that idea. E.g. of such investments might be things like property options that you may want to flip, 99 years highly speculated property bought for high potential capital gains, bird nest investment, certain type of gold investment (e.g. genneva gold), land banking, and other types of alternative investment etc. But if you don't like the idea, you may consider putting 100% of the balanced after setting aside point 1, in instruments mentioned in point 2.

Manage Your Cash Flow

Here's some suggestion on how you can manage your own cash flow condition:

1. You will need to track your expenses for about 3 months to find out exactly what's your expenses per month so that you can find out if you can cut down your expenses. Keep 1 month worth of expenses in cash in a separate spending account just for spending every month and stick to that budget.
2. You need to pay yourself first and put aside at least 20% of your income per month to a separate savings account towards achieving financial freedom. Increase this percentage whenever possible.
3. Set aside about 8-10% to invest in your own education so that you can improve your income actively or passively.
4. Donate about 5-10% of your income to any charity you like, such as world vision, red cross etc, so that you share your wealth with the universe, as sharing will help you achieve more!
5. Set aside 5-10% of your income towards insurance of any form. Try not to stretch yourself too much on this and that's why I prefer to buy term insurance rather than any other form of insurance. This is to ensure that you are well protected should anything happen.
6. Set aside about 5-10% as for long term spending on bigger items, e.g. tour, car, big plasma tv, laptop, etc
7. Spend  about 5-10% of your income to pamper yourself, use this to splurge on things that you love and is fun, spa package, 5 star hotel stay, high class dinner etc. Make yourself happy. This it to keep you motivated in life and recharge your energy.
8. Keep your required expenses to < 40% of your income.

Here are some tools I've created that you may want to use to help in the management of your cash flow:

• Track your Networth - This excel file helps you track your current networth so that you can understand more about your current financial condition and find out exactly how long can your current savings last you.
• Expense Tracker - This excel file helps you track your expenses on a daily basis. You'll need to add in the monthly part yourself by copying the current worksheet to a new month. But with this tool, you'll be able to find out exactly where does your money goes to so that you know where you can cut down your expenses.

Financial Freedom

Perhaps you may be wondering what exactly is this Financial Freedom thing that I'm always mentioning and talking about. Here's some lights to it...

Financial freedom is something that I would very much look forward to, i.e. my passive income is able to pay for all my expenses, so whichever amount I earned on top of that will only improve my life further and I no longer need to worry about paying off my bills, my expenses, etc. As even if I'm not working, I'll still be able to afford to pay off all my expenses.

Then you may be wondering so what's this passive income thing about? Well passive income is an income source that you will get no matter what happened and you do not need to work actively (everyday) for it. Examples are: rental income, interest, dividends, etc.

Now that you've understand what is all these about, would you love to pursue and strive for financial freedom so that you can then be free to do whichever you wish to do in life and no longer need to worry about your job / career / business. If you are interested in having financial freedom, it's now time to think of how you wish to achieve it, i.e. through what means, stocks / shares, property investment, business, passive internet marketing, royalties from songs / books etc?

When you are clear on how you wish to achieve it, do drop me a comment, wherever possible, I would like to lend you a helping hand on that. :)

Get Your Family to be Financially FIT!

As the economy recovers gradually, we tend to leave the past lessons learnt behind us. Hence, it’s important to prepare yourself and keep your family’s financial state healthy in order to protect your family.

Set aside at least 10-20% of your income and put it in an account to build your “Golden Nest” towards financial freedom. Use this money for savings (6 months worth of expenses) and put the rest into any suitable investment plan that suits your risk appetite. Set a realistic budget and track your monthly spending to see if you can cut down on that so that you can contribute more towards your “Golden Nest”.

Here’s a checklist that you may use:

• Pay Yourself First
  Set aside a percentage that is at least 10-20% of your income and put it in a separate account. Do not use this money other than for investment purposes to grow your fund. The 1^st portion of this savings will first contribute to your savings for rainy days (i.e. 6 months worth of expenses or 3 month worth of income). The rest will then be used for investment purposes as mentioned earlier.
  
  
• Set a Family Budget
  Come up a cap that you would like to limit your total family expenses to. Make sure that this cap is realistic and it can cover your groceries, bills, transportation, entertainment, etc. Make sure that your family agrees and keep to the limit.
  
  
• Debt Management
  Make an effort to pay off your credit card bills and other loans such as home loan, car loan etc. This will ensure that you do not have any roll over interest unnecessarily. Other bills are usually less worrying as they normally have a 2 month grace period, such as phone bills etc.
  
  
• Insure your family
  Ensure that your family have enough insurance protection so that you will not be tied down by any unnecessary burdens should any unfortunate event occur. You may want to consider preparing for your child’s education plan as well. (My suggestion for such plan is more of term plan to ensure that you are covered enough to pay off your child’s education should anything happen to you, and the rest of the money set aside for this will directly go into investment, such as stocks and shares, properties etc. But please bear in mind that for whichever investment mode you choose, you need to ensure that you have enough education / knowledge for that investment mode in order to make money from it. In other words, you must know what you are doing and not follow the crowd blindly, not even follow what your financial planner has to say without first understanding fully what exactly is going on.)

I M $avvy

http://www.cpf.gov.sg/imsavvy/infohub.asp

Financial Info Hub by CPF Board it has some of the stuff you will want to know about financial.

What you should know about the categories covered

• Cash Flow / Debt Management
  
  
  • Inflation (Covered)
    
  • How to manage your cash flow without getting in debt
    
  • Get out of Debts
  • Avoid Bankruptcy (Covered)
• Financial Planning
  
  • Plan for your kids (Covered)
  • Plan for yourselves
  • Protect your loved ones
    
  • Get the most out of recession
  • About recession (Covered)
• Housing
  
  • Housing Loan
    
  • Re-financing your home (Covered for overseas home)
  • Flats demand? (Covered)
  • Which type of housing should you get?
    
• Investment and Insurance
  
  • Life Insurance
  • Health Insurance
  • Endowment Plans
  • Stocks
    
  • Unit Trust
    
  • ETF (Covered)
  • Bonds
  • Money Market Fund
  • Treasuries Bill
    

I've plans to talk about those uncovered areas in the near future when I've enough / more knowledge about it