Singapore’s core inflation in May hit its highest level in more than 13 years, led by rising prices of food and utilities. Prices are expected to continue rising in the months ahead despite the government’s measures to manage inflation. With inflation running rampant, you need to take action before it becomes a significant financial hurdle to overcome, Here are five wealth accumulation strategies that can help you beat inflation.
REDUCE UNNECESSARY EXPENSES
Do you really need that morning coffee daily? Are you spending too much on food deliveries? You can save a lot more by making lifestyle changes. Use Google Sheets or any expense tracking app to keep track of your spending. This gives you a better idea of where your money went and helps you refine your spending habits. Maybe you can switch to a cheaper mobile plan and eat out less often. You’ll be smiling when you see more savings inside your bank.
Try the 50/30/20 budget. This means you should be using your monthly income in this manner: 50% on necessities like utilities and rent, 30% on wants such as entertainment, and 20% for savings. This way, you get to indulge in a good meal once in a while and still have enough to pay your bills
CULTIVATE THE HABIT OF SAVING MONEY
Wealth accumulation takes time. Set your savings goal to keep yourself disciplined and motivated. Rather than wondering about how to get rich overnight, you should set a target to hit, say $100,000. The small amounts you save each day goes a long way in helping you reach this target.
Find a bank that offers you the option of creating a separate savings account. Think about how much you can transfer into your savings account every month and how you’re going to achieve it. If you want to save $800 a month, this could mean cutting down on your shopping and food expenses. Say you get a second income from a freelance job or you receive a pay increment. Increase the amount you save every month when your financial situation improves and you’ll notice a difference it makes over time.
INVEST YOUR MONEY
Investments can help to build your wealth. By keeping too much cash on the sidelines, you could miss out on years of healthy returns that would benefit you in the long run. Monies that are invested can earn interest and eventually accumulate a modest amount. However, investment decisions should be made carefully after considering your financial situation and risk appetite. Do keep in mind that different types of investments bring forth diferent level of risks.
CLEAR HIGH-INTEREST DEBTS
Time to clear off any outstanding credit card debts or any high-interest loans you have! You can’t free up your income unless you pay them off. Work on clearing them as soon as possible so you have more money to use for investments, savings, or upgrading your skills so you can get a better job and higher income
INCREASE YOUR INCOME
Do you have a 9 to 5 job or are you working from home most of the time? If your job allows you to work from home, you can consider trying side hustles that match your skills, e.g., graphic design. Those days when you’re not occupied with work from your full time job can be better used to earn extra income. If you don’t have the luxury to work from home, consider taking up a weekend job or selling off items you don’t need.
This article is for informational purposes only and should not be relied upon as financial advice.