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Financial Tips for Singaporeans During Covid-19

Ten months after the world reported the first Covid-19 case — the virus is still rampaging through the world, disrupting lives and causing mayhem to many industries, leaving tens of thousands of people without a job. We look at financial tips you can learn and practise on your own.

What options are available for Singaporeans who have lost their jobs? And how can the rest of us watch our spending in order to ensure we have sufficient savings to ride through this storm?

In this article, we hope to point Singaporeans to the right financial assistance programme, as well as provide some financial tips on how we can all save more money.

Defer your loans in Singapore

If you have lost your job, one of the first things you will worry about is definitely your loans — e.g. mortgage, car, renovation, study loans, insurance etc.

The Singapore government understands this too and worked with the banks to provide Singaporeans with the options to defer their loans in May 2020. These deferments are not automatic, so you will have to work with your bank directly if you wish to take this up.

However, this doesn’t mean that everyone should just take up this offer. Given that any deferred payment or loans will continue to accrued interests, any individual will need to properly evaluate the pros and cons to make sure it won’t be worse off for themselves when they eventually have to resume payment.

Understanding that the situation is only improving slowly, or not at all for some individuals, MAS has decided to extend this scheme to 2021, as mentioned by MAS in a press release:

“As the economic outlook remains challenging and there continues to be significant uncertainty over the depth and duration of this downturn, the latest package of measures will provide further support to affected individuals”.

Financial support grants for Singaporeans

One other avenue for Singaporeans to get financial support include the 3 grant supported by the Ministry of Social and Family Development — Covid 19 Support Grant, Courage Fund, Temporary relief fund.

Each of these grants has different qualifying criteria.

Covid-19 Support Grant is for Singaporeans (aged 16 and above), who have experienced either a job loss or reduced pay for the last 3 months. Eligible Singaporeans can get 500 to 800 in cash for 3 months.

Courage Fund is for lower-income households in Singapore, and eligible households will get a one-time payment of $1,000.

Last of all, the Temporary Relief Fund will support lower- and middle-income households, where eligible individuals will receive a one-time payment of $500.

For the full criteria list, please visit: https://www.msf.gov.sg/assistance/Pages/covid19relief.aspx#TCF

Make small changes to your lifestyle

None of us know when this Covid-19 nightmare will end, so the best way to protect yourself during this period is to make sure you have enough savings to ride through this storm.

Multiple small changes to your lifestyle can help make a huge difference in the long run.

Cancel subscriptions that you don’t need

Look at any recurring charges on your credit card bill. If you are like most Singaporeans, you are likely to be paying for Netflix, Spotify and maybe a food delivery subscription on a monthly basis.

Now might be a good time to evaluate which ones you really need, and which ones you would like to cut. This doesn’t have to be permanent — when the situation gets better, you can always subscribe to them again.

Save on electricity

If you have been working from home since the start of Covid-19, you might have seen your electricity bill shot up, especially if you switched on the air con throughout the day.

From now till March next year is Singapore’s monsoon season, so you can expect more rainfall and cooler weather. Instead of relying on aircon, now might be a good time to invest in a good fan to save more money, and the environment too! Practise the financial tips we mention today.

These are just some of the changes you can make, and besides these, you can also review your transportation, dining and exercise options. Find out if there are more cost effective options or alternatives.

Problem Gambling & Considerations in Getting Personal Loans

Problem Gambling and Considerations in getting a Personal Loan

Think World Cup makes you Rich?  A look at Problem Gambling

Seen the problem gambling advertisement by Singapore? It has gone completely viral and people from the USA has seen the ad. Most of us at Empire Global are glad we supported Germany! Some of us have won quite a bit. Of course we bet from licensed source – Singapore Pools.

And who could forget dynamo Germany win over Argentina in the World Cup finals! 1-0 and that sealed the deal for the campaign.

We wished this was us! Gutsy guy who made this pick. Well, the ad message is to get across “Problem Gambling” to people.
Any Other Score: Germany vs Brazil

Any Other Score: Germany vs Brazil. We all wished we had this betting slip! 7-1 to Germany.

Here’s the ad done to resolve problem gambling

Problem Gambling in Singapore

We probably should have heeded Andy’s dad advice to support Germany isn’t it? With Germany’s win over Brazil (7-1 trashing), our hearts wished we had bet big on Germany. Wouldn’t you?

Although the memes and the jokes that people made over the ad made Singapore famous indirectly but the underlying message is important. Which is why the government agency will not yank the advert out from our tv viewing commercials.

Problem gambling is on the rise here in Singapore and is getting prevalent in our society especially with two big casinos in our country. Public education has increased greatly over the years, with readily available helplines , exclusion acts from casinos  and many online resources and support from government agencies. Here’s an info graphic to show some numbers on gambling habits in Singapore.

Gambling Figures 2011: Highlighting Gambling habits of Singaporeans

Gambling Figures 2011: Highlighting Gambling habits of Singaporeans. credit: ST PHOTO

With the increase takedown on illegal gambling dens and illegal moneylenders, it shows that Singapore is taking a strong stand on illegal activities.

Read more on: Singapore cracks down on illegal gambling dens

Borrowing Legally and Illegally

With World Cup this year, moneylenders has seen a spike in customers who are borrowing. Some of them had gambled heavily on underground gambling dens and needed financial assistance immediately. Some had turned to loansharks to borrow to pay off their debts. We speak to such customers every so often and at times we had to turn them down too.

The benefits and low risks involved for borrowing from legal lenders far outweigh those of illegal lenders. Harassments, high interest rates, SMS spam are the things you would want to avoid when you want to take up a loan.

Read more on: Why borrow from Licensed Moneylenders

Financial institutions and legal moneylenders have regulatory compliances and legit licenses to provide personal loan. Furthermore, with Budget 2014 there are new changes to the moneylending industries. Tighter rules and regulations are being carried out with more crackdowns on moneylenders who fail to compile within the rules. Moneylending licenses are getting lesser too. Which means those licensed moneylenders you see now are pretty much doing a great job.

Moneylending rules are under review which was announced during the World Cup period. Borrowers would have better financial education and interest rate caps. We expect this will be done across the board soon and the stop to new licenses for moneylenders since 2012 goes only to show that the government would only want good moneylenders to remain in the industry

Read more on: Moneylending review this World Cup

Getting a Personal Loan

You may need a sum of money urgently and you have exhausted all avenues to look for. This is when people turn to licensed moneylenders as it offers a form of unsecured debt financing solution. A Personal loan might be a good choice to look at. Plus moneylenders are able to release funds on a shorter term notice.

Advantages of Personal Loan from Moneylenders

Personal loan issued by moneylenders are unsecured meaning that you don’t have to vouch so strictly for your credit rating or income as opposed to by banks and other financial agencies. However by saying so, ensure that you are borrowing from a licensed moneylender or else you might end up in debt with extremely high interest rates.

Most of the time, one will need to handle a stack of paper work and provide assurance to lenders in order to receive a personal loans. Whereas with moneylenders, this step is greatly simplified. You would not need to have  a perfect credit rating or high salary to cover the personal loan.

Read more: Personal Loans Information Guide

5 Important Considerations before getting Personal Loan

1. Have you thought of all other alternatives before approaching a licensed moneylender? Do you have reserve funds somewhere? This is because personal loans bring another form of debt towards your financials.

2. Personal loan contracts are legal and borrowers are to ensure that they are able to meet the repayment terms and contract requirements. Ensure that you are able to meet the repayments set out and double check in on your financials before signing on the contract.

3. Borrow only what you need and what you can repay. Do a financial calculation of your outstanding debts, income and expenses. Gauge your debt servicing ratio, and borrow only what you can mange with. This is to avoid unwanted interest repayments.

4. Ensure that moneylenders or financial officers explain the financial and legal terms that are bounded in the contract. ALWAYS be sure that you know and understand the personal loan contract term. For personal loans, keep in mind the basics which is repayment period, repayment schedule, interest rates and other fees that could be incurred.

5. Be sure of yourself that you have made an informed decision about taking a personal loan from a licensed moneylender. Go with a licensed moneylender that you are comfortable with. Check their reviews online and compare them. Do not rush to take up a personal loan. Do through research for yourself.

At the End of the day

Regardless of whether you are borrowing from banks or licensed moneylenders, ensure that you have done adequate research and comparison on the loan contracts.

Personal loan are contracts made between you and the lender, understand the legal terms and the repayment contract that is set out. Caculate the interest rates and the repayment amount for the full loan term to ensure that you are borrowing within your limits.

ALWAYS borrow within your capabilities.

Stay tuned as we bring more articles on personal loans and how it affects you. We look into interest rates offered by banks and the many financial terms and buzz words commonly exchanged between them to confuse borrowers.

Empire Global is a licensed money lending company in Singapore. We place great emphasis on dishing out proper financial advice to our customers before they sign on the dotted line.

Here’s the new ad done by NCPG to save themselves. Some find it a good one. Some not so. You have the final say.

NCPG new Ad One More Time for Andy's Dad

NCPG new Ad One More Time for Andy’s Dad after Germany’s win this World Cup. What say you?

Credit Card Payment on Credit

6 Tips to help you Manage Debts & Finances

According to an article published on The Straits Times on 1 August 2013, Singaporeans are loading up more and more on debts and many are taking up multiple loans.

This is also made evident in the Yearbook of Statistics Singapore 2013; it shows that the number of pledges received at pawnshops and the numbers of loans have shot up significantly between the years 2011-2013. Obviously, this has shown that Singaporeans may have difficulty in managing debts and require help to manage debts.

As it’s becoming easier to apply for credit options such as credit cards, credit lines and loans, the number of young adults running into debts are increasing as well.

6 Tips to Manage Debts Better

So how should you ensure that you don’t end up being buried under a mountain of debt?

Here is a simple video by Institute of Financial Literarcy that shows us how you can learn to manage debts, and some take-away pointers from us at Empire Global SG.

1.) Don’t take up loans that you Cannot Afford

Before you get too excited about taking up a loan for your new Porsche or Ferrari, please bear this in mind – higher debts equals higher repayment terms which leads to lesser ready cash for your other expenses.

As a general rule of thumb, your total monthly servicable should not exceed 35% of your gross income. This is to ensure that you will be able to repay the loan with ease and not create a pit-hole for your future.

2.) Be interested in interest rates

Is it true that you should take a package with a lower interest rate? If you agree with that statement, you are probably paying more interest than necessary.

Effective interest rates reflect the true cost of taking up the loan as it takes into consideration the frequency and amount of the repayments.

This could means that although you are servicing a smaller amount of monthly repayments but you are actually paying more than one who pays a larger monthly amount.

Advertised interest rates on the other hand, are typically nominal rates, which have not taken the amount of loan and period of repayment into consideration.

Therefore, next time when you are offer an attractive loan rate, do not be too hasty to take up yet.

Ask the bank for the effective interest rates as well; calculate the exact amount that you need to repay after taking into consideration the amount of loan and the frequency of repayments before you decide whether to take up the loan.

Hence, if you are keen to manage debts, make sure you have adequate knowledge in the different interest rates and be very clear of what you are landing yourself into!

3.) Read Everything before signing anything

Unless you are a superstar who needs to autograph for 5000 fans within 2 hours, take time to study the contract carefully. Understand your rights and obligations before you sign.

If in doubt, question every term and jargon that you don’t understand. Know that you are the customer and have the right to know every detail thoroughly from the service providers.

Once you have signed on the contract, you are legally bound to the terms and conditions stated.

To manage debts well, do not make the common mistake that most people do when taking up a loan deal. Not reading the fine print!

4.) Don’t Borrow to Pay a Debt. Ever.

We cannot stress on this point any further – Never Ever Borrow to Pay a Debt. Do this in order to manage debts better!

If you need to borrow to pay for a debt, it shows that you are already having problems to manage debts.

Stop before you dig yourself into another hole! Look at some of the Stupidest Ways Singaporeans Deal With Debts and don’t follow in their footsteps.

If you think you can manage debts yourself, by doing so, you are totally wrong. Wouldn’t it be worse to have one more debtor coming after you for repayment?

Here are some steps from MoneySense to help you understand how you can become debt-free as soon as possible.

Credit Card Payment on Credit

Credit Card Payment on Credit Card Joke

 

5.) Stay on track with the big picture

Are you getting confused over the different debts that you have? Are you unsure of what debts you are paying for every month and when are the repayments going to end?

To manage debts well, come up with a spreadsheet to have a better overview of the outstanding debts. It will also help you to prioritise which debt you should repay first.

As a general rule, you should always pay off the debt with the highest interest rates such as credit card debts.

This helpful infographic will show you 5 tips to save yourself from the credit card debts.

5 Ways Dig Yourself Out of Credit Card Debt Info graphic. Manage Debts better!

5 Ways Dig Yourself Out of Credit Card Debt Info graphic. Manage Debts better!

 

6.) Consolidate and save

Are you suffocating from the different debts that you need to repay every month? Perhaps it’s time for you to speak to your lender on the repayment terms.

Trust us; the situation will just get worse if you try to avoid payments. Have a good control over your financial situation; ensure that you do not have too many late repayments to prevent incurring more interest.

Your lender may be able to help you to restructure the loan. After all, all lenders would want their money back.

Don’t try to avoid your lender just because you are having problems with the repayments. Be open to them. Ask for help.

Conclusion

At the end of the day, the best way to prevent you from getting unhealthy with debts is to be able to manage  debts well. Understanding your needs and wants, be able to differentiate between the two.

Focus on your priorities in life. Understand your needs and reduce on your wants, you will naturally be able to reduce your debts.

Before taking up a loan or swiping your credit cards for your next purchases. You should look at your monthly income, expenses and budget them accordingly.

Do you have the capability to support that new purchase? Ask yourself the questions before committing.

Spending more than you Earn

Spending more than you Earn

 

Therefore, as much as possible, we should try our best to manage debts before it gone badly and enjoy our lives within our own means.

If you can only remember one point, just remember this – Spend within your limits and plan wisely. Speak to the friendly loan officers at Empire Global SG for advice and assistance if you need further information.

Managing Debt in Singapore

In our fast-paced society and growing needs, it has become a stage whereby most people would have debts. Be it a home loan, mortgage, personal loan, car loan or credit card bills. Most importantly, one should pay off one’s debt as soon as possible to avoid incurring unknown expenses. It will save you lots of hassle and money in the future.

It is important to understand that getting into debt is a major responsibility. Too much debt can easily get us into trouble. Ask yourself the following questions before making a commitment to borrowing.

6 Big Questions before Borrowing & getting into Debt.

1. Do I really need it in the first place?

Many a times we tend to buy things we do not need. Getting the latest iPhone? Getting new clothes because of an event? A growing number of people are now buying things that they don’t really need, but due to the people around them or society itself we make the purchase on the item. We love ‘the thing’, hence we need ‘the thing’. Sounds familiar?

Many of our purchases are due to our inability to resist the temptation for instant gratification. We are turning into a first buy, and then pay for it later lifestyle; without knowing whether we can earn that money in future! Be very careful of instalment plans on purchases. It’s easy to underestimate the small weekly payments as it can add up to a whole lot more. Avoid being rash in purchase decisions and check the terms and conditions of any such instalment policy.

Start simple. Assess whether the purchase decision is a need or a want. Determine whether if it’s something that you can wait. Then save up for it and make the purchase later. Buy when you need it, not when you want it.

Impatient: Today's tweens want everything fast, with 56 per cent admitting they prefer instant gratification - Dailymail.co.uk

Impatient: Today’s tweens want everything fast, with 56 per cent admitting they prefer instant gratification – Dailymail.co.uk 

2. Is there another way I can pay for my items?

Sometimes, there are subsidies and grants for items. Some of the easiest way to pay for a new item is to sell an old one. At least this reduces your purchase price of the item or even make a profit out of your sale.

Try making a bargain on your purchase items or check out online marketplaces for cheap deals and second-hand purchases. Many a times, we seldom need items that are brand new. Pre-loved items are currently in trend now as it sharply marked down from its usual price.

Stretch your dollar on your purchases. Singaporeans are embracing the second-hand market and its a fast booming economy.

Stretch Your Dollar - Second-hand Economy

Stretch Your Dollar – Second-hand Economy

3. I already have other monthly expenses. Can I still afford it?

Track your budget. Use a budget tracking app or even an excel spreadsheet to understand your financial standing. See how much you have left after your monthly expenses, borrowings and savings. Look at the amount at the end of the day and determine whether it is still advisable to buy it or to put off the purchase.

Make a budget. Always.

Make a budget. Always.

Here’s a quick video on managing your debt in Singapore.

4. How much should I borrow?

How much should I borrow

How much should I borrow

Always try to make a larger downpayment that you can afford or go with a repayment policy that is bigger and shorter within your means. Go for loan plans that can be paid off earlier than the set period so as to avoid incurring further interest on your debt.

Borrowings should always be kept within the repayment limits; too much or too little can be restricting in their own way.

5. How much do i have to pay every month?

To keep your financial status healthy, you should not fork out more than 35% of your gross income on your total debt that you have.

Balancing Your Debt Payment

Balancing Your Debt Payment – Ensure that you plan your debt repayment well against your income

6. How long will it take to pay off my loan?

Managing Your Loan Repayment Period

Managing Your Loan Repayment Period

The longer a loan period is, the more you end up paying. Ask for a comparison of loan tenures across different loan packages that loan companies offer. Look for the interest rates and cumulative interest rates as this will help you in making an informed choice to decide on a comfortable repayment period for your debt.

Ask the loan officers for a manageable repayment period within your means. Understand the different undertaking of each loan types from them too. Payday loans, personal loans, housing loan or even renovation loans are different terms that a loan officer will use. Choose one that best suits your situation.

Conclusion

The whole point here, is that we don’t think much about long-term aspects of our spending and hence make bad financial decisions that land us into debt. Always spend within your means.

Ask yourself repeatedly; Do i need this? Can I afford this? How can I pay for it?

Know your own financial ability and borrow the minimum you need. All these will allow you to have a peace of mind and be financially sound. And finally, always be prepared for life’s “What if’s”. Have emergency savings to fall back on to cover against life’s ups and downs.

References