Inflation, the gradual increase in prices and the corresponding decrease in purchasing power, is a common economic challenge. In Singapore, where the cost of living is high, navigating inflation requires smart strategies. Here are some practical tips to help you stretch your dollar and maintain financial stability amidst rising prices.
1. Budget Wisely and Track Expenses
Create a Detailed Budget:
Start by listing all your income sources and fixed expenses such as mortgage/rent, utilities, bills and insurance.
Allocate funds for variable expenses like groceries, transportation, and entertainment.
Set aside savings for an emergency or rainy day fund.
Regularly Review and Adjust:
Utilise a excel template or app to track your spending and stay within budget.
Periodically review your budget to identify areas where you can cut back. Adjust your spending habits to align with current inflation rates and personal financial goals.
2. Embrace Smart Habits
Look for Discounts and Promotions:
Take advantage of discounts, promotions, and loyalty programs. Many supermarkets and retail stores offer periodic sales and member discounts.
Make notes of prices of items that you need and see if they are really cheaper to purchase during summer sales, 6.6, 11.11, Black Friday etc.
Use apps like ShopBack or Grab or specific credit cards to earn cashback and rewards on everyday purchases.
Buy in Bulk / Switch to House Brands:
Purchasing non-perishable items in bulk can lead to significant savings over time. Look for bulk purchase deals at stores like NTUC FairPrice or online platforms like RedMart.
Consider switching to house brands or generic products which are often cheaper but of comparable quality to branded items.
If you are cool with pre-loved items, check out Carousell for used goods and new things at a fraction of the original price too.
Go for free or low-cost activities:
You could try new experiences and have fun without spending lots of money in Singapore.
Visit BudgetMealGoWhere to find coffee shops offering affordable meals and local drinks easily using postal code
3. Optimise Your Investments
Start Investing:
Consider investing in Treasury Bills (T-Bill), Singapore Savings Bonds (SSBs), or Fixed Deposits are lower risk and provide better returns then leaving cash in your bank account.
Regular Savings Plan (RSP) enables you to invest a fixed sum of money consistently from your choice of digiPortfolio, Exchange traded funds (ETFs) or Unit Trusts.
Diversify Your Portfolio:
Diversify your investments across different asset classes such as stocks, ETFs, and real estate to mitigate risk and improve potential returns.
Explore REITs (Real Estate Investment Trusts) for dividend yields and potential capital gains, as these offer individuals the chance to invest in substantial, income-generating real estate without the need to purchase, manage, or finance properties themselves.
4. Reduce Costs
Improve Energy Efficiency:
Reduce electricity consumption by using energy-efficient appliances with the Energy Label by the National Environment Agency (NEA) and LED lighting.
Turn off appliances, aircon and lights when not in use, and save the environment too.
Compare electricity price plans by different retailers with fixed price plans or discounts off the regulated tariff rates depending on the contract.
Review Your Subscriptions:
Is your home broadband and handphone plans still relevant? For example, if your phone is still in good condition, think about getting SIM-Only Mobile Plans depending on the data you need.
How about other subscriptions like streaming or gym/fitness? Though every dollar counts, keep those that you enjoy for a well-balanced life.
5. Maximise CPF Benefits
Give Your Central Provident Fund (CPF) Savings a Boost:
Make voluntary transfers from your CPF Ordinary Account (OA) to Special Account (SA) to earn higher interest rates.
Consider the CPF Investment Scheme (CPFIS) to invest your CPF OA or SA funds in higher-yielding instruments, while being mindful of the risks involved.
Plan for Retirement:
Ensure you have a solid retirement plan that takes inflation into account. Regularly review your retirement goals and adjust your contributions and investments accordingly.
6. Improve Financial Literacy
Stay Informed:
Keep yourself updated with the latest financial news and trends. Subscribe to reputable financial websites and newsletters or participate in financial literacy workshops and seminars.
Consult Different Advisors:
This article provides a guide and does not constitute financial advice. You should get professional help when needed from financial advisors, mortgage or real estate brokers to develop personalised strategies that can help you manage inflation and achieve your financial or investment goals.
7. Plan Ahead
Freelancing and Skill Development:
Explore freelancing opportunities that can provide additional income through websites like Upwork, and Fiverr. Online tutoring, e-commerce, selling photos, or part time coaching are also options if you have the relevant skills.
Invest time and effort in learning new skills or upgrading existing ones to increase your earning potential. Utilise resources like SkillsFuture credits and platforms like Udemy or LinkedIn learning to attend courses.
Changes in lifestyle:
If you are buying a new home, considering renovations and looking to purchase new household appliances, these are big-ticket items to budget for and planning should start early.
If you are going to have a child, check out baby fairs for massive discounts and loads of freebies.
By implementing these strategies, you can effectively navigate inflation in Singapore and make the most of your hard-earned money. Staying proactive and informed will help you stretch your dollar further and maintain financial stability in an ever-changing economic environment.
Invest and Grow Your Money Wisely,
Value Vaulter
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