How to Save Money In Singapore
Being able to save money has less to do with how much you make and more to do with how willing you are to make adjustments, which allow you to save.
Although it may take a good deal of commitment and sacrifice for you to reach your personal savings goals, the financial benefits that can come from a robust savings plan far outweigh the short-term cutbacks that you may have to endure.
Money Saving Tips
Step 1: Make a Budget
The first thing that any good Independent Financial Adviser will advise you to do when setting out on the path to savings is to make a budget. An accurate budget will allow you to identify all of your necessary expenses, which in turn will give you the ability to calculate exactly how much you can afford to set aside for savings. Here are some simple steps for setting up your budget:
Time Frame: Before you start your budget, you will need to decide on the time frame that you will use. Is yours going to be a monthly budget, a quarterly budget or a yearly budget? The most popular time frame is usually monthly budget (due to the fact that most bills come once a month).
Income: The first thing that you'll need to do when coming up with your budget is to figure out exactly how much income you have coming in. This should include your monthly salary (after taxes) and any supplemental income you may have coming in (from additional jobs, investments or other income sources).
- Save at least 10% of your take home pay each month. You should have an emergency fund equivalent to 3 to 6 months of your take home pay.
Track Expenses: Here is where things get interesting. Now that you've calculated how much money you have coming in each month, you'll need to figure out exactly how much you spend during the same period. While some expenses remain constant and are easy to figure out (Rental, Car Insurance, Car Installment, Phone Bill & Mortgage Loan), others are not so easy to pin down. Expenses such as utilities, transport, food and entertainment may change from month to month, so the best way to figure them into your budget is to come up with a monthly average for each one. Over a three-month period, keep a record of how much you spend on each of these things and then figure out, on average, how much you're spending each month. Add up all of these things to come up with a monthly total of your expenses.
Calculate the Surplus: Now that you've figured out your monthly Income and Expenses, you can start to determine how much you have left over for savings. Simply subtract your monthly expenses from your monthly income to find out how much surplus money you have coming in each month.
If your monthly expenses turn out to be larger than your income, it is a good time to figure out ways to reduce your expenses to keep your spending more in line with your income.
Keep Records: While writing out your budget on a piece of scrap paper once every year may seem like the easiest way to go, it is wiser to keep a continuing record of your expenses, income and savings in a permanent location for easy update. While software programs such as Quicken, Microsoft Money can make it easier for you to manage your personal budget on the computer.
Step 2: Start a Savings Plan
Once you've resolved to start saving money, you'll need to develop a plan. While a good savings plan doesn't need to be an elaborate affair, it should include a basic outline of the methods you will be using to jump-start your savings. Here are some suggestions for developing a practical savings plan:
Set Goals:
The best way to figure out how much you want to save is to set specific monetary goals. If there is a certain item you are saving for, start by calculating how much you need to save in order to pay for it. Next, figure out how much money you have to set aside each month in order to reach the goal in a reasonable amount of time. If you are saving for something with a less specific monetary value (such as money for an emergency fund, your retirement, or just a healthy nest egg), you should establish a goal to reach.
Independent Financial Adviser often recommends having enough money in an emergency fund to cover at least 3 to 6 months worth of household expenses.
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