Don’t waste your savings on circuit breakers. Learn how you can be more financially responsible so that the future you will thank you!
If you’ve managed to save a pot of money while everyone is stuck at home with nowhere to go, pat yourself on the back.
Below we’ve rounded up the top five things to do with your circuit breaker savings. Take a step in the right direction and start growing your money for your future.
1. Channel it towards debt settlement
Logically, if you’ve accumulated some savings but are currently dealing with high-interest, aggravating debt like credit card debt, the first thing you should do is get rid of debt, even if that doesn’t sound all that exciting.
Here are some debt settlement strategies to help you get back into the black.
Remember, there is no such thing as a free loan in the world – the longer you stay in debt, the more money you lose, as compound interest is an extremely slippery descent. The sooner you pay off your debt, the better.
2. Make your savings work harder
You don’t have any debts to hold you back? Then let your savings work for you by parking them in a high-yield savings account.
For the uninitiated, the banks’ regular savings accounts only offer a meager 0.05 percent pa interest, so it would be a smart move to move your money to a high-yield savings account to top up your emergency fund with minimal effort on your part.
3. Start investing
Like it or not, investing is the new way of saving. Investing has its place in everyone’s life as it helps to steadily grow one’s wealth over time in order to achieve long-term financial goals.
To benefit from the magic of compound interest, you need to start investing as early as possible and, just as importantly, stay invested.
Not sure how to start investing? You first need to open a Central Depository (CDP) account and a brokerage account. The latter allows you to buy and sell investment products.
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Before you pour your savings into investment products, do your research and do your homework – it is of paramount importance that you know what you are doing with your money, especially if you are DIYing and planning to create your own portfolio.
When it comes to investing, consumers certainly have more options today than they did a decade ago.
For example, a robo-advisor can help automate your investments, while a regular savings plan is based on the dollar-cost averaging premise, which eliminates the difficulties associated with “timing the market”.
Contrary to what many novice investors may think, you don’t even need a lot of capital to start investing.
ALSO READ: 2 out of 3 here have no savings for the past 6 months: survey
4. Fund a course or two
Do you live by the mantra “never too old to study”? Good with you! Lifelong learning is always a rewarding exercise, even if it isn’t necessarily the easiest or most convenient.
Whatever the case, if you have cash on hand, you should definitely consider using your savings to educate yourself through a course or two. Making sure your skills are up to date and relevant in the ever-evolving job market will help future-proof your job.
5. Plan retirement
It’s never too early to start planning for retirement, even if you’re just 20 or early 30s. If you don’t have other urgent financial commitments on hand, now might be the perfect time to get the ball rolling.
As it stands, new studies in Singapore have shown large gaps in retirement provision and why many people regret not saving sooner.
The ability to secure a steady retirement income depends on the choices we consciously make today. Definitely check out the retirement plans to get started.
Depending on which plan you choose, you can enjoy a monthly payout for a set number of years or for life. In return, you would have to pay a monthly or one-off premium for a certain period of time during your working years.
Treat yourself to something nice
While you’re busy making your money work hard for you, you can also use a fraction of your hard-earned savings to treat yourself to something nice. This could be anything from a relaxing spa session or sojourn to a meal or two at your favorite restaurant. You definitely deserve it!
Make sure that not only are you taking steps to increase your wealth and be better off financially, but that you are also adequately insured. After all, life is unpredictable. Consider necessary health insurance and term life insurance to protect you and your loved ones from disability, death, or a medical crisis.
This article was first published on SingSaver.com.sg.
