Latest retirement trend - FIRE
The FIRE (Financial Independence, Retire Early) movement has seen an exponential increase in popularity in recent years.
POSTED ON 4 December 2019
Have you ever looked at one of your monthly bank statements and wondered: Who made all these purchases — only to realise it was you? An unexpected spike in spending from time to time is only one of the reasons many of us have trouble saving our hard-earned money. It’s not that hard work is lacking. It’s more a matter of spending and saving smarter. Small splurges seem harmless, but overtime, they can impact your overall financial wellness. Here are seven easy steps to put you on the right track to avoiding that spending statement shock.
The first critical step to pulling yourself out of the spending cycle is figuring out how much money you need to pay for essentials, and how much you have left over. Keeping track of where each and every dollar goes will help you separate the essentials from the frills. You’ll find it easier to align your spending habits with your monthly budget and savings goals. Digital tools and apps can make tracking your money easier. You’ll put less towards your shoe addiction and more towards your first home.
Transfer a percentage of your income automatically into a regular savings plan (RSP) every month. That way, it will be in there before you get the urge to splurge. A regular savings plan starts from as low as S$100 per month and is an easy way to start your investment journey. You can set a fixed amount to be used for the purchase of selected mutual funds automatically every month. Leverage the power of dollar cost averaging and compound interest, and you’ll be one step closer to your goal with every paycheck.
With 24-hour access to alluring online deals, it’s harder than ever to resist a sale. But here’s a simple tip to avoid going overboard with mindless online spending: don’t elect to save your debit or credit card information on your computer or with online retailers. While you take time to dig out your card, pause and ask yourself, “Do I really need this?” This quick mental check-in will give you the opportunity to reevaluate the spend.
Timesheet spending is an old but valuable trick. Before you purchase those trendy headphones, calculate how many hours you’d have to work to pay for them. A full week of work might be enough for you to empty that cart.
Are you passionate about travelling? Do you have a home improvement project in mind? Reach those goals with the help of credit card programs that offer the kinds of rewards that enrich your life. Whether it’s earning a flight with travel rewards or collecting points to get that kitchen appliance you’ve had your eye on, leveraging the various rewards programmes from our Citi Credit Cards may bring you closer to your dreams without sacrificing your savings.
Just like how you should visit a dentist regularly, you should also tend to your finances with that same attention to care. Consulting your personal bankers on a consistent basis will help you set clear financial goals and keep you on a path towards the life you’ve always wanted.
Kara Stevens, author and founder of the website Frugal Feminista, recommends that financial check-ins should also include, “Digging deep into the 'why’ of each purchase, so you can adjust your saving, investing, philanthropy and spending percentages throughout various legs of your financial journey.”
Also, once you’ve defined those goals, share them with select friends and family who can help hold you to them, as well as better realise them. Stevens adds, “This includes communicating these shifts with your partner and children so there’s transparency and shared goals.”
Financial health also means investing in your personal well-being and that of your community. “Financial health and wellness also include financial self-awareness and really knowing your values and aligning your spending to those purchases or experiences so they are more meaningful,” Stevens says.
Whether it’s attending a weekly yoga class to benefit your long-term health, or making a charitable donation to a cause you’re passionate about, you’ll be reaping rewards long past the swipe of your card.
People often rationalise spending on things they can’t afford by insisting that they deserve it. The problem escalates when those “rewards” extend to bigger-ticket items, such as the latest designer bag or rare vintage sneakers, that can plunge you further into debt. Plan for well-earned rewards and avoid impulse buys by building a reward system into your budget. Create savings milestones and timelines for when you want to reward yourself.
How do you know when to treat yourself? When you’ve demonstrated financially responsible behavior. And remember: don’t spend more than what you’ve set aside. It’ll make your “treat” that much more worth the wait.
If you adhere to these seven steps, you’ll quickly see how the small financial moves you make every day can bring you closer to the bigger goals that matter most.
Lauren Steeves is a personal finance writer in the U.S.
The sole purpose of this article is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Although information in this document has been obtained from sources believed to be reliable, Citigroup and its affiliates do not guarantee its accuracy or completeness and accept no liability for any direct or consequential losses arising from its use.
Click here for Important Investment Information.
Not Bank Deposits • Not Bank Guaranteed • May Lose Value • Not FDIC Insured • Not Offered to US Persons • Are subject to investment risks, including the possible loss of the principal amount invested.
This communication does not constitute the distribution of any information or the making of any offer of solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized or to any person to whom it is unlawful to distribute such document or to make any offer or solicitation. Interested investors should seek the advice of their financial advisors, as appropriate.
This advertisement has not been reviewed by the Monetary Authority of Singapore.