A growing number of Singaporeans often find themselves in tough financial situations because of high-costs of basic needs. Some also feel as if they are only working to cater for their daily expenses, thus leaving them with almost nothing to save. Facts illustrate that most find themselves facing an unfortunate debt crisis. When your debts are too high, you could approach a certified moneylender to take a loan for your financial needs.
For some years now, it is said that consumer debt will experience a vertical upswing in several Asian countries. The need to take a loan such as personal loans is not only because of housing demands but due to other needs like cars, vacation and many others.
How To Avoid Debt
Despite the high living costs, it’s possible for you to lead a debt-free life in Singapore. But, this requires lots of skills and dedication to turn around your money troubles. Below are some tips to assist you in managing your funds in a cautious manner.
Have A Saving Culture
You need to incorporate the saving culture in your daily life. Immediately after you’ve repaid your debts, begin saving for the future. This is a good resource for building funding for investment options. Maintain emergency funds to cover any unexpected situations in the family.
Evaluate Your Existing Debts
Its important step that you figure out the exact debt you owe. Make a list of how much you owe, the moneylender details, credit type and interest for every debt. Carefully reorganize all the credit card debts and personal loans to reduce the repayment burden. It will also help you clear your debts in a short time. Above all avoid getting more cash for repaying your debts, it’s not prudent.
Prioritise Your Debts
Soon after you have assessed your debts and you’ve removed unnecessary expenditures, its time to look into on repaying these debts. An effective and smart decision would be to start repaying the most expensive debt as it will help you avoid the high interests.
Establish Your Expenditure
To work out your financial troubles, you will require a good strategy for personal debt repayment. That means, calculating your outflows and inflows with the intention of managing your funds efficiently. Set up a comprehensive budget including your income against all the monthly expenses. Give yourself about 6 months adhering to this strategy and you’ll start to notice your financial problems reducing considerably.
Assess Your Expenses
Assessing your exact monthly expenditure can make it a lot easier to identify all the areas that you need to reduce the expenditures to help increase your savings. In taking drastic actions in your present lifestyle, it’s possible for you to increase your finances. This might involve taking a complete evaluation of both recreational and regular expenses.
Use Your Savings
It’s prudent for you to use your savings for instance work bonus to help pay off your debts. Doing so will make sure that you prevent delaying your debts, which might be costly to pay off due to monthly fees that are steep.
Check Your Spending Habits
Once you have reduced your normal expenses, proceed to check your daily spending. Lessen overspending to help free up more funds to pay off your debts. Having a budget isn’t meant to remove your joy in life, but it is an inventive way for finding a compromise on varying things we experience daily in life.
Talk About Your Crisis
Having large debts can be a cause of nervous breakdown for most people, particularly when you’re struggling to repay. Once you share the difficulty with family members, you will decrease stress and the constant panic. In addition seek a debt counsellor’s help, as you’ll get to talk about all your debt problems.
Adjust Your Spending Habits
To make sure you continue being debt-free requires a different approach to your expenditure habits. Be sure to handle your financial reserves in a prudent way and you will avoid debt.
What Drives People To Debts
Sudden Medical Expenses
It’s hard to tell when a medical emergency might strike in the family or even when an accident might happen. It’s said that 22% of your debts are caused by unanticipated medical expenses. You could cushion your family by investing in a medical insurance from the unexpected expenses.
Lack Of Savings
It’s important to inculcate a saving culture in your life. Not having savings for the future may definitely lead you to more debts. Saving regularly will assist you in becoming financially independent as well as invest your funds in other essential things. Being debt-free will lead to you having less stress in your financial life.
Gambling is a bad practice that can drag you into some serious debts. Gambling will take around 22% of your borrowed cash. This figure keeps going up because of the nature of gambling practices which eventually might become an addiction. However, the recently released statistics showed that a lot of Singaporeans are currently staying away from betting.
Lacking Wealth Growing Strategies
Direct parts of your salary into some type of investment to help Grow your wealth. In so doing you will be guaranteed minimum risks on your return on investment. Good investments can help you save on tax besides increasing your assets over some time.
Many Singaporeans are more prone to big spending; a bad habit that often leads to them borrowing heavily. Studies show that 40% plus of all debts, the main reason for heavy borrowing is overspending.
Sometimes entrepreneurs get into financial difficulties due to a harsh business environment as well as other factors. The majority of business owners borrow money to fund their businesses which can at times lead to a serious financial dilemma when the business is incurring losses.
With this tips, it is possible for you to lead a debt-free life in Singapore. What you need is a positive outlook and avoiding painful situations that attract debts. Make a budget to control your expenditures and then start saving for the future.