It’s easy to set financial resolutions at the start of the year, but how good are you at keeping them? This is your sign to do a financial check-in with yourself – you don’t have to wait till the end of the year!
If you’re wondering whether you’re on track to hitting your financial goals, don’t wait till the end of the year to find out. As with other goals, it’s best to conduct regular evaluations and engage in self-reflection at checkpoints throughout the year to keep tabs on your progress.
If you’ve been caught up with other distractions, you still have time to steer yourself back in the right direction and fulfil those goals by the end of the year.
With that, here’s your financial goal checklist that you can use to see how far you are along at achieving your goals. If you’ve managed to at least tick off at least one from the list, good for you!
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#1 You have cut down on your spending
A large part of many’s financial goals and building financial health is to cut down on spending. If you can’t increase your cashflow by getting a side hustle or purchasing high-yield dividends, the easiest way to increase your savings is by cutting down on your expenses.
Regardless of how much you’ve managed to reduce your monthly expenses, you deserve a pat on the back. But, there’s still definitely room for improvement. Categorising your needs vs wants has been said over and over, but it’s extremely helpful to see which areas you can cut down further.
Look out for spending habits that you can tweak to reduce unnecessary expenses. One tip that many have found useful is to unlink your credit card from your phone. Without the convenience of paying for your purchases with your phone on hand, many have said that they end up spending less because of the sheer laziness of fishing out their wallets in their bags.
With a savings or budget goal in mind, you can also use an expense tracker to keep tabs on exactly what you’re spending on. Looking at the exact figure of your monthly expenses can potentially scare you into spending less and saving more.
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#2 You have sufficient emergency funds
Have you reached your six-month emergency savings goal? If you have, congratulations — that’s already half the battle won. Having a fully liquid financial safety net in an unexpected financial rut can literally be a lifesaver. This could include getting retrenched or being diagnosed with a critical illness that would require time off from work for treatment and recovery.
The amount for your emergency funds varies. While some are content with just three months of their income, others would prefer having six months of their monthly expenses. There is no hard and fast rule, you’ll just have to decide what works best for you and are comfortable with.
If you’re not quite there yet, don’t fret. It takes time to build up your emergency funds. Besides setting aside a fixed sum from your income each month, boost it with any lump sum that you receive to expedite the process. Depending on individual circumstances, some might choose to build their emergency fund before looking at investments, while others would prefer investing simultaneously. Your decision should factor in your current obligations and debts in order not to neglect your financial priorities.
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#3 You have started/re-evaluated your investment portfolio
If beefing up your investment portfolio has been one of your financial goals for the year, it’s time to get it evaluated.
Even if you are using the dollar-cost averaging method and putting a mere S$100 into your investments per month, it’s still better than nothing. A little goes a long way when it comes to compounding the interest.
If you haven’t found the courage to start, there’s no better time than now. SingSaver has a ton of investment guides to follow, investment mistakes to avoid and how to successfully set investment goals for novices. With a plethora of investment tools out there like robo-advisors, stock-picking, endowment plans and bonds, take the time to find one that suits your needs to a T.
For the experienced, your investment portfolio is due for review. Look through your portfolio and see which areas are doing well and those that are not. Do you need to review the investment vehicles that you’ve chosen? Are you on track to reaching your investment goal? Do you need to balance your investments with other vehicles? Do you need more liquid investments? Ask yourself these questions to see how you can further improve your asset allocation.
Looking to kickstart your investment journey? Compare the best brokerage accounts in Singapore.
#4 You are adequately insured
Improving your financial health doesn’t necessarily only mean more money — it also means being sufficiently covered to safeguard your wealth. When it comes to financial goals, many only focus on their cashflow and savings while overlooking the importance of insurance.
You may have six digits in your bank account now, but if you’re not insured and are unexpectedly diagnosed with a critical illness, you can expect your bank account to be completely wiped out because of how expensive it can be.
With so many insurance plans out there, choosing the right ones can get a tad overwhelming. This is why having a financial agent or insurance agent can be helpful. Tell them your priorities, the coverage that you’re comfortable with and the budget you have per month. They’ll be able to help you out by choosing the best plans out there for you based on your circumstances.
If you’ve already got that ticked on your checklist, you’re one step closer to achieving your financial goals and improving your overall finances.
Do you prefer to buy your insurance on your own? Compare the best personal accident insurance plans in Singapore.
#5 You are debt-free
Being completely free of debt is a very good indication that you are on track to achieve your financial goals. It helps to free up a lot of money for other expenses or investments.
If you own a house, it can take up to 35 years to pay off your bank loan, and up to 25 years for an HDB loan. If you’re reaching the tail end of your tenure, push on, the end is near! But if you’re still midway through and have other ongoing debts, you should aim to clear the high-interest rate debt first. This could be your credit card debt or personal loan.
It’s also important not to take on more loans to pay your existing debt — it’s only going to snowball and cause you to be more stressed-out than ever. Try to increase your cashflow and focus on clearing the debt one by one.
If you need extra help, you can consider getting a debt consolidation plan to help manage all your debt in one place.
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#6 Your retirement savings have increased
When it comes to retirement savings, we’re not talking about funds in your CPF SA that will be transferred to your RA in time to come. We’re talking about your own retirement financial plan and how you plan to achieve it. Though the funds in your SA will be a huge portion of your retirement payouts when you retire, it is barely enough. It’s important to have your own stash for when you retire.
Do you have a separate savings account for your retirement? Or are you setting aside an investment plan to tide you through your senior years?
It may still feel like early days, especially for those who’ve just created a career for themselves. But with Singapore’s increasing cost of living alongside inflation rates, you’ll be surprised at just how much you’ll need for the essentials. It’s best to start saving up early so you have a longer time horizon to ride out the market fluctuations. This gives you an edge over your peers who start late due to their shorter time period.
If your retirement pot has ever since increased, good on you! But if you haven’t gotten a chance to build the pot, it’s due time you start — a little goes a long way.
Looking to invest for your retirement? Compare and find out which brokerage suits you the best.
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