Adopting these 10 good habits will help you and your family.
1. Set up a regular savings plan
Start by arranging a monthly transfer of funds directly from your salary crediting account into a savings account. This way, you will save progressively in a disciplined manner.
2. Save 10 per cent of your monthly income
An easy way is to put aside your desired savings into a separate account each month. Use the remainder of your pay cheque to maintain your lifestyle.
3. Live frugally
Try to maintain this as your pay increases. Channel the excess into increased savings or investment.
4. Be mindful of your daily expenses
Don’t use up all your income on living expenses or go into debt to fund your lifestyle.
5. Track your debt-servicing ratio
Before you commit to more debts, know this ratio, which should be less than 35 per cent. It reflects how much of your take-home pay (after personal taxes and 20 per cent employee’s CPF contribution) is used to pay your debts. For example, if your monthly take-home pay is $4,000, your debt-servicing ratio should be less than $1,400. The debts you service include your mortgages, credit card debts, car loan, etc.
6. Set aside enough cash for six to nine months’ monthly living expenses
This will help you in an emergency of there is a short-term disruption to your income.
7. Look out for savings account promotions
These additional interest rates can help you maximise your returns over a short period of time.
8. Use your CPF funds to pay annual premiums
Don’t pay with cash, check with insurers on plans that allow you to use your CPF.
9. Review your insurance coverage
as your number of dependents increase.
10. Be open to accepting used items
Expectant mums, prepare a list of required baby items send it to family and friends — recycling toys, books and clothes will not only help cut costs, it will also save the environment!