Personal Financial Management: Straight Down The Business Way

Our workplace should be a learning environment. Our jobs should have an impact on the way we handle your activities especially your finances. There are many invaluable lessons that one can learn about financial management from the workplace that will help us keep away from our esteemed licensed money lender.

In our workplaces, whether we work for a Multinational Company (MNC) or a Small Medium Enterprise (SME), our job scope
will in one way or another involve finance management. The question that should always linger in our mind is, “What difference does my job bring in my personal financial management?”

This article has put together some of the financial management skills that we ought to learn from our workplaces that will help us
put our personal finances together and keep our licensed money lenders at bay.

1. Personal Financial Planning

In every organization, whether big or small, whether for profit or non-profit, budgeting is a mandatory requirement. Budgeting is simply spending less than your earnings and planning for both the short and long-term. In the organization, financial budgets are done at the department level and consolidation is done thereafter.

The main goal of organizational budgeting is to keep the company afloat. The principle is that expenditure should be tied to a source of income and if the income is not yet realized, it would have to be borrowed, at an interest.

This should apply to our personal lives. You should cultivate a habit of personal financial planning: both for yourself and your family. For the salaried employees, this should be very easy for you as you understand clearly what your monthly income looks like.

A budget will help you keep off the traps of reckless spending beyond what you can sustain. Plan what to save, what to invest and what to spend on the recurrent expenditure.

2. Revenue Diversification

If you take a close look on the Statement of Comprehensive Income commonly referred to as profit & loss statement of
listed entities, you will realize that their source of income is more than one. An organization cannot be sustained by one source of income. The management has to think of other sources of income besides the core business.

Take for instance Singapore Press Holdings. Their main stream is Newspaper and Magazine. In the year 2013, the company generated $ 1 billion in revenue from newspaper and magazine business. In addition, Singapore Press Holdings generated approximately $200 million from their property development business.

This is a great lesson that as individual ought to learn. We should endeavor to have more than one source of income. Besides your
day job, think of other ways you can raise revenue for yourself and your family. You can invest in a blue-chip, dividend paying stock, Invest in property market, or even writing as I do.

3. Wise Expenditure: Asset Investment

The next thing you need to do after revenue diversification asset investment. A close look at the statement of financial position (balance sheet) of an entity will give you direction on how to spend your income. The balance sheet usually starts with Assets both non-current and current. The non-current assets are usually huge in figures.

They may include Motor Vehicle, Property Plant and Equipment (PP&E), Free-Hold and Leas Hold buildings etc. Other assets include Cash and intangibles. These assets are basically the “needs” of the company. They are responsible for generating income for the company.

As individuals we also have “needs” that need to be taken care of. Note clearly I’ve intentionally used the word “needs” and not
“wants”. Your needs are the necessities of life: affordable home, expenses on food, utilities and transport. Invest your income on assets that will help you meet your needs.

For example, Investing in bonds and stock, commodities and property is a great way of helping you meet your needs both in
the short-term and in the long-term. Your degree certificate fits well in the description of an Intangible Asset. It is essential when you are looking for employment or even advancing your career.

Your personal and diversified revenue may sometimes not be enough to finance your assets especially when it comes to huge capital based assets. In this case, you can approach a licensed money lender like a bank and take up a loan. A good example is a personal loan or payday loan.

There are things that will never fit in the personal balance sheet. Things like honey moon trip, birthday bash, and amacallan bottle at Zouk, $5000 worth of matrimonial bed, $4000 worth of leather seat etc. Such items cannot help you generate income.

4. Tax Break Maximization

A tax break is a savings on a taxpayers’ liability. It provides a savings through tax deductions, tax credits, tax exemptions and other tax incentives. You may have noted that big companies hire tax consultants to assist them in maximizing the available tax breaks.

From a personal level, you may not hire a consultant to assist you in your taxes. Nevertheless, some self-education on tax matters
can go a long way in helping you save significant money in the long run. Do not despise the little money you can save by just conducting some research just to gain knowledge. Always remember that knowledge is power.

If you are a victim of arguing with your credit card operator on waiving your penalties, consider spending more time educating
yourself on personal tax matters in Singapore and keep yourself updated.

5. Priority Expenditure

If you engage a business person whether in a MNC or SME, they will tell you that they have an endless list of items they need to
purchase. This could include new equipment to replace an old one, new computers, a nice pantry, a modern meeting room etc.

It is of critical to note that the needs of one organization will vary with the needs of another organization. For example, new
equipment will rank higher on the purchase list of a manufacturing company as compared to a company in the advertising industry.

This is not exceptional when it comes to individuals. It is a crucial discipline that needs to be cultivated. You need to categorize your expenditure in the order of their priority. Just as the organizational needs are different across firms and industries, individual needs vary.

Top-class education for the children may be on the top of the list of a certain individual and to another, a car is on top, and yet to another a house tops the list of the things to purchase. My needs will never be your needs but the most important lesson is to always prioritize your expenditure.


It is almost certain that we have come across some, if not all, of these financial management skills. This is a wake-up call to all
of us. It is time to put the learned financial skills into practice in our individual lives.

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The Path to Mid-Life Crisis in Singapore

Mid-life crisis. I am sure that most of us have heard of this term umpteen times, whether if you understand or not understand what exactly this means. What does it feels to be encountering a mid life crisis? In order to understand the mid life crisis, we need to study our life cycle. Take a look at our country, Singapore as an example. She will be 53 years old in 2018 and while we have progressed significantly as a country over the past decades, apparently we are still trapped in a mid life crisis. Often, many would approach licensed money lender in Singapore to seek temporary help for advance cash flow issues.

As of now, the critical domestic financial challenges faced by Singaporeans can be attributed to the following factors:

  • Rising costs of living
  • Slower economic growth
  • Aging population
  • Declining population
  • Continuous influx of immigrant workers
  • A more privileged youth with higher materialistic expectations

How Did It Emerge?

It all begins with us being born, obviously, but this article is about how we give birth to the problem. We grow up, go to school, and finish college. It’s the golden era of our comfort years. All we need to do throughout this period is concentrate on our studies and have fun, ask for money from our parents, blow it up on our friends.

Basically, there is no concept of earning money or saving money, the most worried you can get might be about your grades or finding your identity. Then we look for a job post our graduation or study further. If we decided to study further, our previous lifestyle of not having to worry about anything apart from grades continues.

This is the time you realize the power of money and start working towards earning more and more. With little or no effort, you keep getting regular increments and regular promotions and you are very satisfied in life. This is the time when you are in your mid 20s and start to find your soul mate because your professional life seems sorted.

You get married, have kids, and raise your family. This is a time when you mostly reach the epitome of happiness because you have a luxurious life and a nice family thanks to a stable job and a steady flow of income. Throughout your thirties till your forties you get to enjoy this happiness.

Post forty five is usually the time when your regular salary increments start to decline no matter how much effort you put in and your professional career starts to plateau. This is the time you start getting worried about your income because by now you are used to a certain kind of a lifestyle. When this worry starts pricking your conscience, you, my friend, have just hit the mid-life crisis.

Reconciling Expenses with Savings

Income includes your active and passive income as well as your expenses and savings. You need to learn how not to over indulge from the start, basically you need to know how to live within your means and this process begins as soon as you start earning in your twenties. Even though you think that you don’t need to, you very much need to get into the habit of saving money. No matter how small the amount is, keep a savings account and deposit some amount of money in it, preferably a minimum of 10% of your income.

Your thirties is the right time to think about investments so start gathering as much knowledge as you can about the things you can invest in – while some people swear by property, some people might advise you to invest in stocks. Learn about all this and decide what suits best for you keeping in mind the expenses that your family requires.

What you need to do is learn the art of balancing expenses

In your forties when you are approaching your mid-life, you will have to be prudent regarding the money you spend to avoid a mid-life crisis. It is the time when expenses shoot up significantly because your children are growing up and you need to regularly invest in their higher education, and deal with the fact that your salary increment may not be rising at the same pace. By this time you must have an alternate source of income, a means of getting passive income along with your main source, that is, your job.

Thanks to your amazing planning and savings you will be able to enjoy our fifties, whether you retire voluntarily, involuntarily or even if you are still working because the pressure will be off of your head. If you made good investments in your hay days, they will be bearing fruit today and you will not have to lose out on anything just because you have retired. This is a sure shot way to avoid a mid-life crisis.

Now that you know what steps to take at which age, it might become easier for you to never worry about money in your life. Whatever you do, always remember that the key is to save money because money saved is money earned. So, as soon as you start earning, you must start saving. Even a little money right now will go a long way later on.


Emphasising On The Importance Of Emergency Fund

Let’s be real frank right here – Money makes the world go round, you couldn’t agree more with this, isn’t it? Being ranked as the top cities to live in, Singapore is unfortunately the highest cost of living city in the world. In fact, just when you thought the cost of living couldn’t get any higher, you are so wrong. Everything is increasing, like the healthcare, housing, petrol, food, basic necessity but the only one that stays stagnate would be our salary. Most Singaporeans couldn’t agree more with this and it is extremely difficult to save up on monthly basis due to the monthly bills and commitments as well.

According to Singapore Business Review article, almost half of the Singapore population have little or even no savings at all. This is a saddening polling results. Fortunately, this is not the end and there is still possibility to turn your financial situation 180 degree around. It is time for you to take a leap of faith, you need to start building up an emergency fund and the future you will be thankful.

Why is emergency fund necessary?

We all know that accident happens, anything can happen anytime and at any point of time. Unless you are equip with special superpower to predict the future, if not, there is absolutely no way you can know when will an emergency arise. All it takes, is just one major event to drain you out and leave you in debts. Times like this, what are you supposed to do? Approach your friends and families for help? How much help can you get? What if you don’t?

There are always options and one of the alternative could be getting a instant personal loan or urgent payday loan from licensed money lenders in Singapore. Even though it may not be the best option, but let’s admit, it will solve your current problem much faster than other options such as banks.

This acts as a financial buffer for you as it protects your savings from unforeseen circumstances such as:

1. Medical Bills:  In Singapore, most of us are protected by MediShield and able to use Medisave, but you still need to take out a sum of cash to pay off your expensive bills. It all depends on the conditions, the length of your stay and the class of your ward. All these can easily drain off your savings.

2. Home Appliances or Auto repairs: Having to repair your car and aircon can be quite be quite draining as the cost can go up to 3 digits or even 4 digits, depending on the conditions.

3. Loss of jobs: As Singapore is experiencing economy downturn, the retrenchment rate is rising. In the event of retrenchment, despite having one month salary compensation, you are expected to have at least 6 months worth of savings (after you minus the expenses) to keep you financially afloat.

Hence, this is why you should always have an emergency fund!

How much do you need for your emergency fund?

First thing first, how much do you need to your emergency fund? How much is considered enough?

There is no absolutely answer but it is good to always follow a guideline and it also depends on your monthly income. If you are expecting a fixed income every month, the possibility of saving up for an emergency fund will be more easy peasy as compared  to those doing part time casual jobs. Having a fixed income monthly will be easier as you have a calculations as to how much cash flow you are expecting each month.

Ultimately, the most ideal plan will be building an emergency fund of at least 6 months worth – factoring the remaining monthly savings after you minus the expenses such as insurance, utilities, transportation, groceries, credit cards repayments and etc.

How do you build your emergency fund?

There is absolutely no short cuts to save up an emergency fund. It boils down to a few factors such as your financial situation, you individual discipline and determination as well. Emergency fund might take slightly longer time to build if your monthly salary is acceptable whereas your expenses are very high. But then again, you know that everyone has to start somewhere and it is essential to start building because you are unable to foreseen any unconventional events.

Let’s say for instance, you make a fixed income of S$4,000 a month but your liabilities take up about S$3,000 – that leaves you with about S$1000 a month to put into your emergency fund. If you need at least 6 months’ worth of expenses to build up your emergency fund – that means you’ll need at least S$18,000 – which will take you 18 months to build if you put in S$1000 every month.

Bottom Line

Do remember that it is not all about the speed, it is about the process and getting there. No matter you take how long, I am sure you’ll reach your goal eventually. There might be distraction along the way but you should know what’s best for yourself. If you have free time on your rest days, you might want to take up side income to help you achieve your goals.