Being a financially savvy Singaporean can mean a lot of things to different people. But it all boils down to one key action in the area of savings, protection, debt management and investing. All it takes for you to become financially savvy is to do one thing right in each of these four areas and you are almost guaranteed to someone who is financially savvy.
So, want to know what financially savvy Singaporeans are doing that you aren’t? Let’s go. Here are four common things that financially savvy Singaporeans always do without fail.
Savings is the foundation of every financially savvy Singaporean. Without the any savings, there is little you can do to improve your financial situation. It is no wonder why financially savvy Singaporeans begin their journey towards financial savviness by building the right savings plan.
One effective way of building a savings plan is through savings plan. A regular savings plan helps you to be committed in setting aside a fixed amount of savings every month. At the same time, it lets your money work hard for you by investing and growing your savings.
One of the key differences between a financially savvy Singaporean and one who isn’t is the mentality surrounding risk. Someone who is financially savvy fully understands the concept of risk and acknowledge that we cannot neglect such risk. Instead, we need to manage and mitigate it. When it comes to mitigating risk, insurance is the most valuable financial tool in helping us manage risk. For a small price, it comes with a huge safety net to protect our financial downside from medical condition or accidents.
That being said, insurance is not just about owning enough policies. It is about the quality of the policies as well. This is why financially savvy Singaporeans make it a point to do an annual review on their insurance plans, just to ensure that they are getting adequate coverage for their ever changing risks.
Singapore has one of the highest home ownership rate in the world, amongst many first world countries. While this is a definitely something Singaporeans should be proud of, it comes with its own drawbacks. In particular, the over-emphasis on home ownership has led to Singaporeans taking on debts of few hundred thousand to a few million for 20+ years. Taking on such a huge debt comes with the financial responsibility of committing to high monthly mortgage payments.
With such a heavy financial responsibility on our shoulders, don’t you think it is important to reduce that financial load? How? By refinancing your home loan whenever possible to get the best home loan deal. Indeed, that is what financially savvy Singaporeans do to reduce the interest rate that they are paying on their home loan. Less interest rate payment translates to more disposable income for you. No wonder financially savvy Singaporeans often keep a lookout for the best home loan deal whenever they can.
Financial savviness is almost synonymous with investment savviness. You can’t claim to be financially savvy without being a good investor. Yet, it is often one of the hardest things to achieve, even for the financially savvy ones. Most people tend to avoid investing because of the misconception that investing is difficult.
The truth is, investing can be simple. For example, you can choose to start a regular investment plan via a robo advisor or to self manage with a mutual or exchange traded fund account. These investment options allow you to invest in basket of stocks without doing extensive research. Financially savvy Singaporeans know that too. That’s why they never let the misconception that investing is difficult to stop them from investing.
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