Inflation is hitting us at different angles and ways. In fact you may already have noticed it on your usual day-to-day life when you purchase food from your favourite hawker or when you book for a private transport. The truth is we are gradually seeing a rising pattern in cost with daily commodities like food and transport, but may have gradually turned immune or becoming more accepting of these continuous changes in our everyday lives.
With the new Goods & Service Tax (GST) rate change effective next year, how can Singaporeans now cope with all these rising cost of living?
We cannot stop inflation, but as an individual we can do our own part to be prudent and cut down on unnecessary expenditures. Here are some tips that you can pick up to tide over this challenging period for yourself as well as your family.
1. Don’t fall into unnecessary debts
Be truthful and realistic about your financial surroundings. Unless you already have a steady stream of income and you are free from financial obligations, it is advisable to control splurges on branded goods or expensive restaurants. Instead, you might want to look for more wallet-friendly alternatives that can keep you sustainable in the long term.
As much as Singaporeans love to show off their socioeconomic status (SES), there is really no need to put yourself into financial debts to impress others. Why not choose to lead a worry-free sustainable lifestyle rather than a short-lived lavish lifestyle that you will struggle to keep up with? Many people don’t realise the compounding effects of debts until it is too late, when they get hit with multiple repercussions like accumulative penalty fees and a deteriorating credit score.
2. Keep up with your budget plan
Budgeting is a quintessential skill of good money management, as it helps you curb overspending while having tighter control over your finances. Budgeting can sometimes require a lot of discipline, but it is also an easy and straightforward method to manage your income, savings and expenses.
Try setting monthly or annual goals on how much wealth you wish to achieve. This can cultivate good money management habits in the long term.
The easiest method would be to set aside the highest portion of your income into the following hierarchy to achieve financial freedom sooner – (1) Savings, (2) needs and (3) wants. You can try investing in low risk investment plans or put your funds into a high interest savings account, but it is crucial to do ample study on the products before you commit to it. Some common savings plans might have a lock-in period that do not allow you to draw cash during the committed period, so be sure to do your calculations before you commit to such plans as well.
3. Be frugal
Make full use of every financial aid support that was given to Singaporean citizens so you can cut down on using your own out-of-pocket cash. These money that you have saved up can be set aside to be used to pay off your daily commodities like gas, utility bills or even put into your savings account. You can also pick up day-to-day money saving tips for instance, dine at a budget friendly food centre instead of restaurants or even meal prep for your work lunch.
Good money habits can counter inflating costs
There are just so many ways one can actually counter inflations through managing our own financial outputs first. It is important to cultivate a good habit of financial accountability and understand the risk of depending your life on credit terms.
In addition, if you are interested to learn more about tips to manage your finances and how to maintain a good credit reputation, be sure to follow and like our Facebook page @creditbureausingapore or go to our main website to find out more!
This article is contributed by Credit Bureau Singapore.