I want to be able to take care of myself and meet my financial needs for the rest of my life. I don’t wish to rely on my children for financial support during my old age. I want to be financially stable and self-sufficient. I believe my children should have filial piety. However, I also believe that old aged parents should not burden their children unnecessary if they have retirement plan in place.
The cost of living in Singapore is rising by the months. About four months ago, a packet of 400 gram tea leaves costs S$ 4.85; and now it costs S$ 4.95 (2 per cent) increase in price. (I bought the same brand of tea leaves for S$3.75 a packet). A packet of cream buns costs S$ 1.00 previously, and it has increased to S$ 1.10 (10 per cent increased). Fresh ginger used to be $4 per Kilogram last year. Now, it costs S$5.70 per kilogram. (42 per cent increased). These are only some of the common items which many Singaporeans buy daily.
Just a few weeks ago, the Singapore government has decided to increase vehicle(excluding motor cycle) custom clearance fee after the Malaysia government announced its fee hike. It has been our government’s policy to match the vehicle custom clearance fee to that of the Malaysia. With this increase, there is definitely going to be an unpleasant chain reaction that would impact the business bottom line and consumers’ disposable income. It is inevitable that the cost of living is treading upward.
Higher transportation cost will translate to higher cost of importing and exporting goods via the Johor (Malaysia) custom. The end-users are forced to pay higher price for the same quantity of goods. I have noticed that prices of goods keep going one direction – upward. The word ‘inflation’ means a general increase in prices and fall in the purchasing value of money. I am saddened that my children and the future generation after them will have hard time coping with inflation effect by changes in the way businesses are operated in the world, climatic changes and technological advancement.
Inflation has caused the prices of things to become more costly. If money were left in the Fixed Deposit (FD) account, earning a miserable 1 per cent a year currently, many Singaporeans are doomed to become poorer in ten years from now. I believe low interest rate is the result of excessive liquidity in the economy. With core inflation (excluding car and housing prices) rising between 2.5 – 3 per cent recently, does it make sense for me to allow my money to be eroded in the bank’s saving account? Obviously not! What can ordinary Singaporeans like me do? I need to ‘fight’ inflation with creativity. The followings are some of the ways which I believe many Singaporeans (including me) are doing to overcome inflation:
- SOURCE FOR HIGHER FIXED DEPOSIT (FD) INTEREST RATE. Instead of putting my money in the local bank, I transfer some funds to Malaysia, Johor Bahru (JB). The fixed deposit (FD) rate is currently 3.3 to 3.85 per cent per annum; depending on the bank’s promotion. With exchange rate at 2.53, S$ 10,000 is equivalent to RM$25,300. I gain exchange rate if Singapore dollars (SGD) strengthen 12 months later. Of course the reverse is also possible. It is unlikely for Singapore currency to drop 50 per cent against Malaysian ringgit (RM). In the worst case scenario, if SGD were to drop to be on par with RM, I still gain 3.85% interest per annum. I am very confident that our Singapore government is unlikely to allow Singapore currency to drop drastically as it will affect our economy adversely. On the contrary, if the Malaysian currency drop, there is currency risk involved. Instead of earning interest, I lost in exchange rate. Recently, the Malaysian currency has dropped more than 30% against Sing Dollar due to drop in oil prices and the PM Nagib corruption scandal that shaken the political stability of Malaysia. Thankfully I act fast and withdrew most of my deposit before it drop further. Although I have lost some money in the exchange rate, I managed to cut lost and prevent further loss. It would be unwise to hold on and hope for the currency to correct itself.
- SOURCE FOR VALUE PURCHASE. Buy what you need and be contended with what you have. I tend to buy more of the common household items when there is relatively good discount locally. I will only stock up an item if I could save fifty cents or more as I don’t have much storage in my house. Last week, I took a bus to Malaysia to bank in some money and buy some essential stuff. The traffic was smooth and I took about one hour to reach my destination. Guess what? I managed to save about S$50 in that one trip. For example, a packet of tea leaves cost S$ 4.95 in Singapore, but it costs S$3.75 a packet in Malaysia. I save S$1.20 per packet. I bought 3 packets (saving S$3.60) as it would last me for at least 9 months. I bought a portable mobile charger (9000mAh) for S$ 31, while one costs about S$45 locally (saving S$14). A discounted ear phone costs S$6.30, but a local one costs about S$15. (Saving S$8.70) I bought many more things with under S$ 100. I also endeavor to stretch my dollars with value shopping at a Factory Outlet Store and save a total of S$24 since I bought them at discounted price.
- BUY FROM DIRECT SOURCE. If possible, buy directly from a warehouse suppliers or factory outlet. Usually you can find bargain and pay for less. I can opt to join a warehouse club and pay subscription fee of S$50 per year to entitle me to purchase in bulk at discounted price; but I think it is not worth it for a small family. I prefer to buy fresh food from the neighborhood ‘wet’ market if I intend to cook the very day. Otherwise, I prefer to buy frozen meat from a supermarket chain as it costs much lesser than the fresh one. I don’t cook daily as my children are seldom home for dinner. As such, it makes sense for me to stock up frozen meat. I buy vegetables from the supermarket whenever I intend to cook. I will buy what I intend to consume to avoid wastage and spend less.
- SOURCE FOR ‘GOOD’ INVESTMENT VEHICLE. Ask yourself how much investment risk you are willing to take. If you are risk adverse, it is best leave your money in a bank that pays you the highest possible interest rate in town. Alternatively, you may put some money in the Unit Trust. I always advocate invests with spare cash so that you can sleep soundly even though there is a long delay in payment due to certain valid reason. If you can stomach high risk, invest in real estate and consider alternative investment in foreign countries. It is advisable to invest in a developed country where there is structured financial framework in place, and its legal system is more stringent and transparent. Emerging markets such as Brazil and India have to invest with caution and do your due diligent. For some, stock market and Forex market trading are preferred as they want control over their fund and remain active in the market watch. As for me, I prefer to invest in real estate (the apartment which I am staying), alternative investment, Unit Trust and put some money in higher interest rate fixed deposit in JB.
- EAT LESS, LOSE WEIGHT, STAY HEALTHY AND SAVE MONEY. It is always healthier to cook your own meals at home. I used to eat three meals a day and snack in between meals. No matter how much I exercise, I couldn’t lose weight. However, ever since I started working part-time, I decided to take just two meals a day; breakfast and late lunch. I usually take fruits in the evening to control my hunger and for health. I lost 3 kilogram within 3 months. Besides, I also started eating healthy snack, such as raisin and nuts whenever I am feeling hungry in the day.
at night. I stopped eating after 9 p.m. and drink a cup of hot beverage if I am really hungry before sleeping. To avoid the hunger pangs, I sleep early. Ever since I take control of my diet and started exercising from June, I have lost 5 kg till date. (Nov) I aim to reduce my BMI to an acceptable level and remain healthy. There was a scientific experiment that showed eating light meal prolong life. Studies in 2009 showed one group of monkey was given normal meals, while another group was given light meals. The light meal group lives longer. Monkeys ate light meals live longer and have lower rate of aging related illnesses – diabetes, cancer and heart diseases. The monkeys that are on light diet look younger than the one that ate normal meals. My grandma used to eat light and walk a lot when she was alive. She lived until age 100. I definitely want to follow her footstep and live long enough to see my grandchildren get married and have great-grandchildren. Since I have started eating one breakfast and one main meal a day, I spend lesser on groceries. As I cook less amount of food, my utility bill is reduced as well.