How to Stop Wasting Your Money in 2021

If there’s anything we can expect as we head towards 2021 it is that the cost of living will continue to rise across Singapore. At first glance, the cost of living has not dramatically increased in recent years.

In fact, Singapore’s inflation rate has only averaged 1.7 percent since 1990 and has been stable to date despite global financial crises (AsiaOne 2019). Still, other costs like higher education, food, and healthcare have increased dramatically, and each of these elements are contributing to an expensive future for all Singaporeans. Building a robust savings account is the simplest way to prepare for the future, and 2021 is the perfect time to start doubling or even tripling those savings. Here are five uncomplicated ways to begin increasing your savings, starting in the new year.

Understand Where Your Money is Going – Always (AsiaOne 2020)

Before you can really begin to save, it’s essential to audit your current reoccurring and one-off expenses to understand where your money is going. This will allow you to make decisions about current purchases that may not be necessary during the new year. This will also help to calculate how much income you have in comparison to your current expenses. Once you understand how much excess you will have each month, you can begin to put incremental amounts towards your savings fund.

Treat Compound Interest as Your Friend (MoneySmart 2016)

Compound interest is the interest on a deposit (or loan) that is calculated based on both the initial principal and the accumulated interest. It can help a sum grow at a faster rate than simple interest, which will only be calculated based on the principal amount. Research and ask an expert about the best compound interest investments that will work best with your current life situation and watch as your savings grow!

One Man’s Trash, Another’s Treasure? (SingSaver 2015)

Who says you need to buy everything brand new? There are some areas where you can shop secondhand to get the best deal possible. Rather than getting the latest mobile phone or that giant flatscreen television, see if you can score a great deal from someone who decided to upgrade. Pocket what you saved on your smart shopping and return it to your growing savings funds!

It’s Time to Get that Promotion (AsiaOne 2020)

Have you been in your job for a significant period of time or taken on new responsibilities in your current role? It might be the right time to ask for a raise or apply for an internal promotion! If awarded, maintain your usual spending and use the extra money in your new and increased paycheck to bolster your savings account in double or triple the time.

Eliminate Two to Three Extra Expenses Each Month (SingSaver 2015)

Every month, pinpoint three thing you spend a significant amount of money on (like that morning coffee or expensive gym membership you keep “forgetting” to use) and see where you can reduce each one by just 10%. Focusing on three to cut back on will ensure you’re successful in at least one area. You’d be surprised just how effective of a method this can be to adding to your savings on a regular basis.

If having a robust savings account isn’t on your 2021 resolutions list, it should be. By implementing even just one of these tips, you can significantly increase your savings – and if you’re consistent about maintaining it, you might just triple it before 2022!

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Content Sources
Manulife (June 2019), 6 retirement planning mistakes to avoid, retrieved from Manulife
MoneySense (October 2018), Introduction to planning for retirement, retrieved from MoneySense
Ong, Ryan (August 2019), What’s the ‘correct’ retirement age in Singapore?, retrieved from AsiaOne
SingSaver (June 2019), How Much Do You Need To Retire in Singapore, retrieved from SingSaver