5 Smart Money Habits To Keep For Managing Your Wealth

In Singapore, where the cost of living is high, it is not enough to earn just enough money. Knowing how to manage your income and build your wealth is also crucial to ensure you can have adequate funds to tide through economic inflation, recessions, personal emergencies, and retirement.

It doesn’t always have to be about complicated investments or financial plans. Knowing how to use credit sources like short term loans and credit lines can also be of help! Here, we share some simple tips that can help you become smarter at managing your finances!

1. Spend on a budget

Budgeting is easier said than done – but it is an essential aspect of any sound financial plan! Budgeting isn’t just about setting limits on how much to spend, but also organising your spending needs, setting goals, and finding ways to stick to it.

To help you budget more effectively, you can manage your finances by splitting them into different bank accounts – for example, one for savings, and one for your day-to-day spending. Having a budget helps you keep on track to your goals, rather than leaving it to chance.

2. Set clear goals

You might remember learning about ‘SMART’ goals back in school. Basically, your financial goals should be Specific, Measurable, Achievable, Relevant, and Time-bound. Use this framework to help you set clear goals, whether they are short-term or long-term.

Setting goals gives you the motivation to stick to your financial plans. For example, if you are saving up for a holiday, you will be more likely to adhere to your plan, knowing that you will be rewarded for your efforts!

3. Invest wisely

Smart money management isn’t just about keeping your money – it is also learning to make it grow. Besides earning your regular salary (active income), putting your money in investments will also generate you more wealth over time (passive income).

Some areas that people invest in are stocks, bonds, or real estate. For low-risk ways to earn, you could also look into savings accounts or fixed deposits at the bank. Make sure to compare the various plans and schemes available to choose the one that will reap you the most rewards.

4. Save consciously

You don’t just manage your money to save up for a big purchase. You should also save for important things like your retirement, emergencies, and other ad hoc unforeseen costs. You can make use of CPF or insurance to help you with these, but it is crucial to know how these work in the first place.

In certain circumstances, you might feel that getting some help from a licensed money lender in Singapore will be necessary. If so, it is best that you do your due research to know which money lenders have the best rates and reliability to be of assistance when you need it.

5. Maintain your credit score

Your credit score is an indicator to financial institutions of how credit-worthy you are. This is based on your activity like payment timeliness, credit utilisation ratio, credit enquiry activity, and so on. For example, opening too many credit lines in a short span of time may send a message to financial institutions that you are stretching your credit too much, making them less likely to approve loans to you, or more likely to set higher interest rates on loans that they do approve.

Pay attention to what affects your credit score, and strive to keep it in the favourable ranges. This will come in handy to you when you need to take out any loans or credit lines.

Conclusion

Getting your finances on track will take a bit of work, but you have to get started somewhere. By adopting these smart money practices, you can have a better chance of saving up for the things that matter.

If you need any help clearing any existing debts in the meantime, or would like to take out a loan for emergency or investment purposes, make sure to check out the list of moneylenders in Singapore for licensed lenders.

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