Cut back on unnecessary spending, clear debts, budget better, save more… are your financial resolutions starting to sound stale?
While the new year is a fitting time to make resolutions that’ll pave the way for a happier, healthier, wealthier and more successful you, it’s important that you have solid goals. In other words, resolutions that are relevant to you in the current scheme of things (not something recycled from last year or plucked from a foreign mag). That way, you’ll be more motivated to work towards them and actually make a positive difference in your life.
So for 2019, why not shape your resolutions around Singapore’s news headlines that are close to your heart?
To help, we’ve rounded up hot-button topics for 2018 and formulated money-smart resolutions that’ll help you take on the year ahead with confidence.
What got us talking: Inflation
News headline: Singapore headline inflation unchanged at 0.7% in October, but core inflation creeps higher, The Straits Times, 23 November 2018
Inflation isn’t new. But are you still managing it in old ways? A common mistake people make when the prices of living essentials – like food, clothing, healthcare and public transport – keep rising is to cling on to cash.
But holding on to your dollars isn’t the best plan for your financial security. Consider parking it in investments or endowment plans that give higher returns instead. Then sit back while the power of compound interest gets to work (compound interest is where the interest payout gets added to your capital, so you get interest on interest!).
Your 2019 Resolution Idea #1: Don’t hold on to cash; seek ways to grow it at rates higher than inflation. You can read more about how compound interest works here.
What got us talking: Job loss due to automation, economic restructuring and age
News headline: Retraining, deploying workers at risk of displacement a ‘key focus’ of MOM (Ministry of Manpower): Josephine Teo, Channel NewsAsia, 29 April 2018
With new technologies and economic restructuring changing the nature of many jobs in Singapore and killing some altogether, the government is pushing for life-long learning in a bid to nurture a more agile workforce. The key objective of continuous retraining is to stay relevant in the fast-changing job landscape.
So, if you haven’t used your SkillsFuture credits to upskill or reskill yet, you should start thinking about it. Kudos if you have; but don’t stop there. Continue to look for new ways to broaden and deepen your skills. And if you’re worried about the cost, try to get your employer to sponsor part or all of the fees by explaining how the course would help with your job.
Through constant retraining, you’ll multiply your job prospects, have an edge over other employees when it comes to a promotion or job offer, and you’ll be assured of an income for longer.
Your 2019 Resolution Idea #2: Pick up a new skill to future-proof your income.
What got us talking: The diabetes epidemic
News headline: Global cost of treatment for diabetes set to double by 2030, The Straits Times, 27 November 2018
Ever since Singapore waged war on diabetes in 2016, there’s been a slew of efforts aimed at controlling diabetes numbers – 1 in 9 Singaporeans are diabetic – and helping diabetics manage the disease. Aside from healthier food options you’d have noticed at hawker centres, diabetics can now tap into their Medisave to pay for blood glucose monitoring test strips and lancets.
Because diabetes is a lifestyle disease, perhaps the biggest weapon in your fight against it is to make certain lifestyle changes. So in 2019, make a pact with yourself to eat healthier, exercise more regularly and stop smoking (smoking increases your risk of diabetes and diabetic smokers run a higher risk of complications such as stroke and heart disease).
Equally essential in any action plan against diabetes is insurance coverage to ensure you have a financial cushion in case your condition worsens. Aviva’s MyCoreCI Plan is one of the very few critical illness (CI) plans in the market that insures Type 2 diabetics, as well as pre-diabetics and those with high blood pressure, high cholesterol and high BMI. It’s designed to pay out for diabetic complications such as diabetic ketoacidosis and limb amputation, as well as for critical illnesses such as stroke and heart attack which diabetics are at higher risk for.
Your 2019 Resolution Idea #3: Make conscious lifestyle choices to manage your health, and also ensure you have the right financial protection for conditions you’re at risk for or concerned about.
What got us talking: Going cashless
News headline: Singapore rolls out unified payment QR code SGQR in latest cashless push, Channel NewsAsia, 17 September 2018
Cashless societies are the future and like the rest of the world, Singapore’s in the race to transition away from cash transactions with QR codes linked to mobile wallets in hawker centres, e-payments and so on.
But the allure of going cashless (read: faster, more convenient financial transactions done with greater accuracy and efficiency) comes with a call to be more vigilant. Aside from the growing risk of cybercrime and fraudulent transactions, going 100% cashless makes it all too easy to lose track of your expenses.
Think about it. When you make cashless payments for everything from your MRT fare to a kaya toast set from your favourite kopitiam to vitamins from the pharmacy, these small buys can quickly add up to a big expense over the course of a month. And, if you’ve opted for e-bills, overspending can go unnoticed until you get a late-payment alert or a “card declined” error message while paying for a family birthday dinner. So along with staying on top of your spending as cashless transactions become the norm, make it a point to scrutinise your bank transaction history regularly for signs of suspicious spending or overspending.
Your 2019 Resolution Idea #4: Keep a close eye on your expenses.
What got us talking: Holes in our insurance umbrella
News headline: 2017 Protection Gap Study – Singapore, Life Insurance Association, 26 April 2018
The study highlighted an increase in the absolute amount of protection needs and gap. Singaporeans are not covered for 20% of their mortality protection needs and 80% of their critical illness needs. This means that should death or critical illnesses such as cancer and stroke occur, the average working Singapore resident wouldn’t have sufficient funds for things like supporting their dependants , household expenses, outstanding debt and lifestyle maintenance during their recovery period. These costs can put immense financial strain on the family.
So as you review your financial planning needs for the year ahead, make a mental note to check that your coverage amount matches your evolving lifestyle. As a guide, aim for life insurance cover of 9 to 10 times your annual income and critical illness cover of 3.9 times your annual income. That way, your family will be financially supported should the worst happen to you.
Your 2019 Resolution Idea #5: Make an appointment with your adviser to review your family’s insurance portfolio.