As I declutter my possessions, I also started decluttering my finances by listing down and reviewing my expenses and investments. This helps me to understand my spending pattern and how best to manage my finance and to build up passive income.
- Income tax, property tax, home mortgage, insurance, utilities, internet and mobile phone subscription, maintenance fee, etc.
- Meals (Food and Drinks) – The cost of meals vary. For instance, a cup of Starbucks coffee would easily set me back by $5 or more. If I go for a local kopi, that would cost less than $1.50. Personally I prefer the local kopi, taste better and value for money. 🙂 I would estimate an amount that is reasonable.
- Transport (Car, Taxi or Public Transport) – The cost of transport varies depending on the mode of transport and the distance between home and work. I would estimate an amount that is reasonable. If you own a car, do include car loan (if applicable), petrol, road tax, car insurance, car park fee, etc.
- Cable TV – I do not subscribe as I do not see the need.
- Gym Membership – I do not hold any gym membership as I prefer exercising outdoors.
Credit Card Bill
- Consolidate and reduce the number of credit cards to not more than four, to better manage expenses, payments and maximize the benefits like cash rebates or rewards points. Just last month, I terminated one of my credit cards.
- Payments – Pay bills on time and in full to avoid unnecessary late payment fee and interest charge
- Rewards – Redeem all reward points or dollars before expiry dates
- Instalment Plan – Maintain an account of the credit card 0% interest installment plan as they are part of the fixed monthly expenses and also impact on the credit limit and standing
- Credit Limit – Lower my credit limit to help manage my spending
- Annual subscription fee – I do not usually pay my annual subscription fee. I will call the bank for waiver of fee and they typically approve my request out of goodwill.
- Review insurance coverage – Savings (endowment, annuity, etc), Personal Accident (hospitalisation), Health (total permanent disability, critical illness, etc)
- Term or Life? Direct or through the Agent? – The decision on which to go for has direct impact on the coverage and premium. Recently, I reviewed my Term Health insurance coverage, I terminated two of my Health Insurance Policies and signed up a new direct policy of similar coverage, resulting in savings of more than $1,200 per year. Over the years, the insurance companies have improved their offering to stay competitive.
- Savings – Every month, I park 15% of my salary into another bank account as a form of force savings.
- Bonus/Incentive – I use a portion for overseas vacation and save the balance. In the past, instead of saving, I bought luxurious handbags and watches.
- Investment – I am rather weak in investing and building passive income. The lack of time and knowledge is no excuse, at least for me. Buying property at a good location is always a good investment in a country like Singapore which I am glad I did. I need to continue to make a conscious effort to invest and build passive income. Never too late nor too little money to start.
I am not a financial advisor. I am just sharing my personal experiences and hope that this article will give you the push to get started on managing your finances if you are not already doing it. Would love to hear and exchange ideas with you.
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