Being in your thirties means you should feel more financially secure. But if you’re still finding yourself living paycheck to paycheck, then you’re reading the right article.
There are many factors to not feeling financially stable: a bad job, an unstable employment climate, insufficient income, etc. Then there’s habit.
Habits can make or break you, and if you have terrible money management activities and beliefs, there’s no doubt it’s going to be the latter.
“We first make our habits, and then our habits make us.”
But what could these habits be?
Here are 8 of them that could be ruining your financial stability:
- Not Creating a Budget
If you haven’t made a budget yet, you’re definitely on a road toward financial disaster. Budgeting allows you to properly manage your income and expenses, helps you to understand your spending habits, lets you prioritise needs over wants, and even tells you if it’s time to find another job. Creating a budget does take time, but once you get the hang of it, it takes less than 30 minutes to make one for the month. You can even make a forecast to anticipate future income and expenses. All in all, this would definitely help you become more financially prepared.
- Not Tracking the Budget
Okay, so you have a budget. But are you religiously following it? Not tracking and updating your budget is just as bad as not having a budget in the first place! Make use of what you’ve created by updating the budget to reflect any change in income and expenses for the month. Different budget apps can make this activity more convenient as you can now do it while riding on the train home. If you’re having a hard time fitting your expenses to your income, then implement a three-month spend tracking. This means you monitor all your expenses for at least three months and find a pattern that will explain the problem. Then adjust your budget accordingly.
- Living the High Life All the Time
Where do the richest people in Singapore spend their money? Visa has an answer to that. There’s nothing wrong with spending on big-ticket items if and when you can afford it, but you may be losing a lot of money if you make it a habit. For example, half a month’s worth of discretionary expenses may be invested in long-term portfolios that can generate excellent returns — perfect for retirement.
- Dining Out Regularly
Do you know that almost 40% of your food budget goes to regular dine-outs? Long work hours and the need to unwind perhaps encourage you to head to the nearby pub or treat yourself to fine dining, but it doesn’t take a financial genius to know preparing your own home-cooked meals is cheaper. You can begin with these delicious 10-minute meals.
- Messing Up Your Credit Cards
Don’t take that nifty plastic for granted as it has caused a lot of financial troubles not only in Singapore but also for irresponsible spenders all around the world. Credit cards can drag you to the endless pit of debt if you’re not careful. Monthly interest charges build up the more you “forget” to pay your bill or only settle the minimum amount. Then you begin incurring late fees, adding more to your debt. Then should you get rid of your credit card to lead a financially stable life? No, on the contrary, cards can help you establish a good credit history, so you can negotiate for favourable loans in banks. Besides, the plastic itself isn’t the one that’s evil, it’s how you use it that causes your downfall. It also helps to be much wiser with your card selection. You can pick credit cards that let you save, such as those that offer rebates or cashbacks, or reward you with air miles, especially since Singaporeans love to travel.
- Failing to Plan Ahead
The average life expectancy of Singaporeans is 82 years old, a significant enough increase from around 79 years old in 2003. Thanks to our world-class health care and good lifestyle habits, we are living longer. But this also means one thing: we’ll be spending more money than our forebears just to survive. So if you haven’t been planning on your retirement as early as you can, you’ll be sorry in your twilight years. To start, learn more about the CPF’s Retirement Sum Scheme.
- Skipping Emergency Funds
Emergency funds are a good way to protect yourself from life’s biggest troubles such as illness and a sudden loss of your job. It doesn’t work like retirement funds, but it helps tide you over until you can earn an income again. Most of all, it prevents you from dipping to your other savings accounts, which may be intended for other necessities like your children’s education or a down-payment for your future home.
- Fearing Investments
Are you scared of the stock market or investments? That’s understandable as a number people don’t truly understand how to invest prudently and they avoid what they don’t understand. But merely saving your money can only do so much for you. Your money doesn’t grow unless you learn to invest Investments are what you need to beat inflation and earn passive income. There are many different types of investments to whet various risk appetites. If you’re very conservative, learn more about money market funds, ETFs, REITs or stable dividend stocks. You can’t expect huge growth in these types of investing, however, you can still make a veritable fortune over your lifetime if you invest right.
You can lessen the financial anxiety by breaking all these nasty habits.
It’s not going to be easy, especially if they’re deeply ingrained, but you can do it step by step, goal by goal. In the end, remember that you deserve stability and a life free of financial worry.
So get going!