Healthy spending habits can help improve your finances without forgoing your lifestyle completely. Even a small change in spending can allow you to put aside money for emergency funds or for bigger purchases like a new home. Break these five bad spending habits to take bigger steps towards your financial goals.
1. Daily coffee
In Singapore, a cup of coffee costs between SGD1.4 to SGD6 on average*. While this may not seem like a hefty sum at a glance, think about the annual total sum you could spend on coffee. Will giving up your daily coffee make you a millionaire overnight? Perhaps not. But choosing a more affordable option whenever possible can improve your finances on the long run. For example, consider brewing your own cuppa or a local coffee shop instead of a more expensive café.
2. Impulse purchases
According to an article on Forbes.com^, we see around 4,000 to 10,000 ads in a day whether we are on the train, or simply scrolling through our phones. Before making an impulse purchase, simply ask yourself these basic questions:
· Do you already own something similar that has the same purpose?
· Will you regret it if you delay your purchase?
· Are there any cheaper alternatives to this item?
If the answer is “yes” to any of them, it’d be wise to sit on the intended purchase for a while.
3. Using credit when you have cash
There are many pros when it comes to using a credit card. However, it can be very easy to overspend as credit cards may encourage you to spend more money than you actually have. This issue can be further compounded if you miss your payment cycle, resulting in late payment fees that can put a further strain on your finances.
4. Spending without a plan
It’s important to plan around your needs like food and rent, as well as your financial goals that can include investments, savings and any personal insurance plans that can help cover you against unexpected large expenses. By budgeting your income among these various expenditures, there’s a lower chance of you spending beyond your means.
5. Paying for convenience
With work-from-home arrangements being the new norm, it can be tempting to rely on food deliveries for weekday lunches. However, this convenience often comes with delivery fees, minimum order costs, and surge pricing which can add up quickly.
You can save more by simply cooking your own meals or cutting down on other convenience luxuries by taking a bus or train instead of a taxi or private hire rides.
While these small extra costs may not seem like much, they can amount to a lot in the long run. By cutting them out of your lifestyle or choosing a more affordable alternative whenever possible, you’ll be able to better invest and grow your savings and even protect yourself better in the case of unfortunate illness or injury.
To find out more about growing your wealth and planning for your future financial needs, leave your details below to get in touch with one of our financial planners.
*The real cost of your coffee habit, Asiaone.com
^Finding brand success in the digital world, Forbes.com
This article is for general information only and does not take into account the specific investment objectives, financial situation or needs of any particular person. The views expressed herein do not necessarily reflect the views of HSBC Life (Singapore) Pte. Ltd. and should not be construed as the provision of advice or making of any recommendation. There is no intention to distribute, or offer to sell, or solicit any offer to purchase any product. We recommend that you seek the advice of a qualified financial advisory professional before making any decision to purchase an insurance or investment product. Whilst we have taken reasonable care to ensure that all information provided was obtained from reliable sources and correct at time of publishing, information may become outdated and opinions may change. We are not liable for any loss that may result from the access or use of the information herein provided.
Information is accurate as at 1 February 2023.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
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