Take a moment to consider your situation right now. In what ways might the next two years be different from the ones just past? Doing something like buying a new laptop or redecorating your space. What about in the next five years? Can you picture yourself reaching more advanced goals, such as buying your ideal home or getting married and going on your fantasy honeymoon?
In the far future, you may be saving up for a child’s college tuition or your own retirement. The aforementioned examples are possible short-, intermediate-, and long-term monetary targets for you to aim for.
Because everyone has unique objectives and requirements, financial planning is an individual process. However, it need not be convoluted. If you plan beforehand, you won’t have any problems.
If you need help getting started with financial planning, here are 5 tips to consider:
1. Create a financial road map
How long has it been since you took a close look at your finances? It’s never too late to begin if you haven’t started yet.
DBS digibank, powered by SGFinDex, aggregates your CPF, CDP, HDB, IRAS, and other bank information into a single display, so you can see your entire financial picture. In addition, it gives you the tools you need to make smarter financial decisions thanks to the personalized insights and advice it provides. To get going, select the “Plan” tab in the app.
2. Saving is the cornerstone
After you’ve established your financial objectives, make saving a priority.
Spend “what is left after savings,” as Warren Buffett put it. It’s wise to follow the “pay yourself first” strategy, in which a predetermined amount of money is transferred from each paycheck directly into a savings account. It’s recommended that you put aside at least 10% of your salary, while the exact percentage will vary from person to person based on their goals and lifestyle requirements.
In addition, it is crucial to have emergency funds stashed away. You need access to immediate funds in the event of a crisis. If you have dependents, you should aim to create an emergency fund that can cover their needs for at least three to six months. If you’re self-employed, it’s a good idea to have an emergency fund large enough to last you a year.
You can put your emergency savings to good use. Through research, you may earn an interest rate of up to 4.1% per year on your savings. You can also put your money somewhere safe like a savings account, a fixed deposit, or Singapore Savings Bonds, all of which can be cashed out quickly and easily without any fees or value loss.
3. Keep track of your spending habits
Planning your spending and keeping tabs on your cash flow is what a budget is all about. Dissecting your costs to differentiate between necessities and wants is a good place to start, even if the task at first seems overwhelming. A study by DBS bank has found that overall monthly expenses for its customers grew 22.2 per cent in May 2022 compared to May 2021.
4. Safeguard your future
Although it’s natural to want to protect ourselves and our loved ones from the worst case scenario, many people put off or completely avoid dealing with insurance issues because of the awkwardness of broaching the subjects of injury, illness, accident, disaster, and death. However, insurance is an essential part of any sound financial strategy since it protects you and your loved ones from financial ruin in the event of an emergency.
It can be difficult to choose amongst the various insurance policies out there. If you’re not sure where to begin when it comes to insurance, this article should help you narrow down your options.
Our committed group of financial advisors are here to help you pinpoint and fill in any coverage gaps between where you are now and where you want to be.
5. Keep track of your debt
Most of us will have to deal with financial obligations, whether they are student loans, car loans, or mortgages. Therefore, sensible financial planning centers on debt management. It’s important to shop around for a mortgage loan that works with your specific situation. Through refinancing, homeowners with current mortgages may be able to lower their monthly payments. The interest rate on a home loan might be fixed, fluctuating, or a hybrid of the two. You can save a lot of money in the end if you take the time to pick the best bundle.
There are ways out of the debt trap if you’re having trouble keeping up with payments. The DBS Debt Consolidation Plan allows you to bring all your debts under the umbrella of a single bank, making it easier to manage your finances and get back on track with your repayments. You may also be able to reduce your interest expenses.
Conclusion
You may accomplish more in life and provide security for your loved ones with some careful financial planning. It may feel overwhelming at first, but by taking small, manageable measures, you may improve your financial health and resilience.
Are you ready to get going?
Get your financial plan in order by consulting a Financial Advisor today.