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Kickstart Your Financial Planning With These Three Simple Steps

Tired of not reaching your financial goals? Here are three simple steps to get you started this new year.

If you’re not the type to be into the whole “New Year, New Me” resolutions making practice, we get you. It may be too much of a cliché.

However, we believe in seizing more opportunities for growth and experiences, and that it’s important to plan today so that there will be something your future self will thank you for. And the reality is, a lot of these experiences require a certain amount of money.

To keep things simple, here are three fuss-free ways to plan your finances today, so that you’ll be well set for your goals in the coming year.

1. Find the right motivation, plan and tools

Why is it so difficult to stick to our plans? Often, the right motivation and the right plan are not in place. It’s easy (and perfectly okay as a starting point) to have lofty goals like  “I want to retire by 2030” or “I want to be a better saver in 2018”. However, without a clearer and more well-defined goal in mind, it’s easy to lose track along the way and end the year once again with resolutions being unmet.

As a starting point, clearly define a savings goal that complements your motivation. For example, if you want to be a visit Iceland and see the Northern Lights in 2018, define how much you need to save by the end of 2018. Next, break down the saving goal into smaller portions (i.e. 12 portions if you’re going by a monthly basis) to create a savings timeline for yourself.

Photo: Estee Janssens

Next, look for the right tools to enforce your savings goal. POSB’s eMySavings account allows you to pre-set your monthly savings amount and crediting date to help you save for your Iceland trip. Smartphone apps that can help you manage your cashflow and savings are also useful tools to track your expenses. Seedly is a personal finance assistant that assimilates with your bank account into a single interface that automatically organises your spending into categories.

2. Review Your Financial Plans

If you have a financial advisor, it’s time to get him/her to do an annual review for you.

Photo: Nik Macmillan

Many things could have occurred in the past year, e.g. a job change, a new commitment (marriage or new-born) or a new business venture. As your personal situation changes, you need to review and ensure that your current financial plan is still relevant. We recommend reviewing your insurance, investments and debts to safeguard your long term financial interest. If you don’t have a financial planner, don’t worry. It is possible to get free financial advisory services without agents trying to sell you new financial products.

Regardless, it is important to understand your current life stage and financial position. Based on those, you explore the right financial actions that needs to be taken to help you realign the financial plans you had put in place.

3. Multiply your money through simple, effortless ways

Going one step further, it is also important to think about growing your money to achieve your set goals.

One simple and effective way is to put your money in a savings plan that gives you as much interest as possible. The average interest rate on savings account in Singapore is around 0.05%. This means that the bank only pays you $25 per annum if you have $50,000 in your savings account. Unlike most saving accounts, the DBS Multiplier Account helps you to save with a higher interest rate (1.85% instead of 0.05%!).

You might also want to consider getting vested in the stock market in 2018. Investing allows you to compound the savings you have, a.k.a. allowing your money to work harder for you. For a start, you can consider a regular savings plan.

A regular savings plan assists you to invest a fixed amount every month into a variety of Singapore blue chip stocks or an Exchanged Traded Fund (ETF) tracking the Straits Times Index (STI). If you find yourself often strapped for time and are not confident of regularly monitoring the stock market closely, then this option is for you.

Still feeling lost or have any burning money-related questions? Visit the NAV hub for a free one-on-one session on how to get started with financial planning!

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