I think it is very important to come out with a budget plan for the spending and saving of your monthly salary. With this plan, you will be able to control your spending to achieve the desire saving level that you initially wanted.
To work out the monthly budget plan, you must firstly understand your spending. I will suggest that you record your spending on a small notebook. By doing this, you will have a more realistic view of your spending habit. The major problem that most people will have is that the monthly budget plan is too idealistic and it cannot be achieve in the real life. Thus by recording down your daily spending, you will know how much are you actually spending and what are you actually spending on. Review the records and then come out with a realistic monthly budget plan and stick to it as much as possible.
Thursday, December 31, 2009
Saving Tips – Overseas Holiday
Although I am on a saving campaign, but I still go for overseas holidays around twice a year. You guys may think it will be expensive to get overseas for holidays but actually it is not really expensive. The cost of the holidays can be broken down to several parts
1) Transportation - Air Ticket
For booking of air ticket, you can go to the website like Asia travel and Zuji to search for offers.
2) Hotel Cost
For booking of the hotel, you can go to search for the hotel online. Go for the big budget hotels as their pricing are normally better and the rooms are also quite good.
3) Meal
The first thing that you have to consider when going on overseas holiday is the month that you wish to go. This is the most important consideration. Generally the air-ticket and hotel fees are more expensive during peak period (public holiday/school holiday). By going for holiday during the off peak period, you can easily save up to 50% of the total cost. Generally, we like to go holiday during the holiday period as we will need to apply fewer days of annual leave to go. But by doing so, we are actually incurring more cost for the holiday.
The next thing that you have to consider is the place that you wish to go. Normally certain airline will have special offer for a limited period of time to go to certain place. Those air tickets are normally much cheaper than the air-ticket offer by other airline.
The next time is to choose between budget airline and normal airline. As you know, now there is a lot of budget airline in Singapore (Tiger Airway, Air Asia, etc). The price of the air ticket is normally very cheaper when compared with the normal airline. But for me, I prefer to travel on the big airlines as the seat is normally more spacious (Especially flights that takes several hours). But if the price is around 30% to 50% cheaper and the flight time is less than 2 hours, I will choose budget airline.
My only advice on overseas holiday is to do enough research on the internet. You will be able to get a lot of information online. For have fun going on holidays
1) Transportation - Air Ticket
For booking of air ticket, you can go to the website like Asia travel and Zuji to search for offers.
2) Hotel Cost
For booking of the hotel, you can go to search for the hotel online. Go for the big budget hotels as their pricing are normally better and the rooms are also quite good.
3) Meal
The first thing that you have to consider when going on overseas holiday is the month that you wish to go. This is the most important consideration. Generally the air-ticket and hotel fees are more expensive during peak period (public holiday/school holiday). By going for holiday during the off peak period, you can easily save up to 50% of the total cost. Generally, we like to go holiday during the holiday period as we will need to apply fewer days of annual leave to go. But by doing so, we are actually incurring more cost for the holiday.
The next thing that you have to consider is the place that you wish to go. Normally certain airline will have special offer for a limited period of time to go to certain place. Those air tickets are normally much cheaper than the air-ticket offer by other airline.
The next time is to choose between budget airline and normal airline. As you know, now there is a lot of budget airline in Singapore (Tiger Airway, Air Asia, etc). The price of the air ticket is normally very cheaper when compared with the normal airline. But for me, I prefer to travel on the big airlines as the seat is normally more spacious (Especially flights that takes several hours). But if the price is around 30% to 50% cheaper and the flight time is less than 2 hours, I will choose budget airline.
My only advice on overseas holiday is to do enough research on the internet. You will be able to get a lot of information online. For have fun going on holidays
Good offer - Nets Flash Card
I have recently bought the Nets Flash Card to replace my present Ezlink card. The Nets Flash Card cost $5/- to purchase. But if you buy it from the iNets Kiosks, you will get a $5 bonus value for free rides. There are several advantage of using this Nets Flash Card
1) Comes with Complimentary Insurance (From AIG)
2) You can earn linkpoints by taking public transport
3) If you top-up a minimum of $30/- at the iNets Kiosks, you will get a free gift which I normally get a free cup of soya bean from Mr Bean. (Not so bad, I spend on average $30/- a week on transportation, so I will get a free cup every week which is not so bad)
For more information, please visit http://www.nets.com.sg/netsflashpay/
1) Comes with Complimentary Insurance (From AIG)
2) You can earn linkpoints by taking public transport
3) If you top-up a minimum of $30/- at the iNets Kiosks, you will get a free gift which I normally get a free cup of soya bean from Mr Bean. (Not so bad, I spend on average $30/- a week on transportation, so I will get a free cup every week which is not so bad)
For more information, please visit http://www.nets.com.sg/netsflashpay/
Investment - Introduction
As mentioned in my introduction, I have investment in funds and stock. My primary aim is to beat the inflation rate and make my money work for me. I primarily invested in counters that give good dividends. My advise to all on stock trading is that never contra or do margin trading. For small retailer investor like us, you should take equity investment as a mid-term/long-term investment. For me, doing contra or margin trading is just like going to the casino to gamble.
I have invested a big portion of my money in counters that give good regular dividend payout. I am aiming to get an average yield of 8-10% from those counters.
I am planning to reinvest with the dividend received and together with 30% of my monthly income. I am looking at good dividend stock from other sectors, such as Hyflux Water Trust, Cityspring, Singpost etc….
Please see the updated portfolio that I have on the left bottom corner of this blog.
I have invested a big portion of my money in counters that give good regular dividend payout. I am aiming to get an average yield of 8-10% from those counters.
I am planning to reinvest with the dividend received and together with 30% of my monthly income. I am looking at good dividend stock from other sectors, such as Hyflux Water Trust, Cityspring, Singpost etc….
Please see the updated portfolio that I have on the left bottom corner of this blog.
Saving Tips - Tax
As you know the personal income tax of Singapore is rather low as compared to other countries. The first $20,000 chargeable income is tax free.
Chargeable Income Rate (%)
First $20,000 0
Next $10,000 3.5
Next $10,000 5.5
Next $40,000 8.5
But although the personal income tax is low, we have a lot of other tax to pay, for example GST, COE/ERP/Road Tax (if you own a car), etc…
So you can see that in order to lower the tax that you are paying, one of the ways is to reduce spending.
Take GST for example, if you are spending S$1000 per month, which means that you will be tax $70/- per month and $840/- per year. So from this you can see if you can reduce spending, you can also reduce the tax being paid every year.
Chargeable Income Rate (%)
First $20,000 0
Next $10,000 3.5
Next $10,000 5.5
Next $40,000 8.5
But although the personal income tax is low, we have a lot of other tax to pay, for example GST, COE/ERP/Road Tax (if you own a car), etc…
So you can see that in order to lower the tax that you are paying, one of the ways is to reduce spending.
Take GST for example, if you are spending S$1000 per month, which means that you will be tax $70/- per month and $840/- per year. So from this you can see if you can reduce spending, you can also reduce the tax being paid every year.
Saving Tips - Introduction
Spending habit – Credit Card
I have seen a lot of saving method, such as only withdrawing only a fixed amount for spending or place a portion of your salary to one saving account. But I feel those method don’t really work for me. I always have the problem of overspending and drawing money from the bank every week. On top of that, I still used credit card to pay for bills and spending. Thus every month a big part of my salary is being used to repay the credit card bills. So the first step to my saving campaign is to reduce the usage of the credit card. Now I only used credit card to pay for my bills, such as mobile phone bills, internet bills, etc…… I have locked up all my credit card except for one credit card which I will used to pay the bills.
Spending habit – Transportation
I have the habit of taking taxi when going to work and during weekend. And you will know that taxi fares are quite expensive when compared with other public transportation such as Bus/MRT. For example, to take taxi from my home to my working place it cost me around S$25. I normally take 2 to 3 times taxi to work every week, thus I will spend almost around S$200 to S$300 minimum every month on taxi. This easily worked out to be S$2.4k to S3.6k a year. That is almost a month’s salary spend on taxi which can be totally avoided. I have not been taking taxi for the past few months (unless can be reimburse by the company) and it is really not a difficult thing to achieve. You just have to wake up on time and take note of the approx. arrival time of the Buses/MRT that you are taking. You can use the IRIS service to check the approx. arrival time of the next bus in the bus stop that you are in. I believe this will help as normally you will get impatient when you don’t see your bus coming and when a taxi comes, you will more likely to take that taxi.
Spending habit – Food
The price of food in Singapore is still reasonable. If you can get a meal outside in the coffee shop for around $2 to $5 depending on what you eat. I used to like to eat in restaurant. For a normal restaurant in Singapore, it will cost around $20/- for a meal for each person. Take for example if you go to eat in restaurant twice a week with your family (assuming one person). A meal will cost around S$50 including tax. That will work out to be S$400 a month. For a year, it will cost you around S$4.8k.
As you can see, by simply changing the way I spend on transportation and food, I will be able to save almost S$7k to S$8k a year. Imagine what you can do with that money.
Also by spending less means that we are actually paying less tax to the government as we will spend less in GST which is currently 7%.
I have seen a lot of saving method, such as only withdrawing only a fixed amount for spending or place a portion of your salary to one saving account. But I feel those method don’t really work for me. I always have the problem of overspending and drawing money from the bank every week. On top of that, I still used credit card to pay for bills and spending. Thus every month a big part of my salary is being used to repay the credit card bills. So the first step to my saving campaign is to reduce the usage of the credit card. Now I only used credit card to pay for my bills, such as mobile phone bills, internet bills, etc…… I have locked up all my credit card except for one credit card which I will used to pay the bills.
Spending habit – Transportation
I have the habit of taking taxi when going to work and during weekend. And you will know that taxi fares are quite expensive when compared with other public transportation such as Bus/MRT. For example, to take taxi from my home to my working place it cost me around S$25. I normally take 2 to 3 times taxi to work every week, thus I will spend almost around S$200 to S$300 minimum every month on taxi. This easily worked out to be S$2.4k to S3.6k a year. That is almost a month’s salary spend on taxi which can be totally avoided. I have not been taking taxi for the past few months (unless can be reimburse by the company) and it is really not a difficult thing to achieve. You just have to wake up on time and take note of the approx. arrival time of the Buses/MRT that you are taking. You can use the IRIS service to check the approx. arrival time of the next bus in the bus stop that you are in. I believe this will help as normally you will get impatient when you don’t see your bus coming and when a taxi comes, you will more likely to take that taxi.
Spending habit – Food
The price of food in Singapore is still reasonable. If you can get a meal outside in the coffee shop for around $2 to $5 depending on what you eat. I used to like to eat in restaurant. For a normal restaurant in Singapore, it will cost around $20/- for a meal for each person. Take for example if you go to eat in restaurant twice a week with your family (assuming one person). A meal will cost around S$50 including tax. That will work out to be S$400 a month. For a year, it will cost you around S$4.8k.
As you can see, by simply changing the way I spend on transportation and food, I will be able to save almost S$7k to S$8k a year. Imagine what you can do with that money.
Also by spending less means that we are actually paying less tax to the government as we will spend less in GST which is currently 7%.
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