This Mother’s Day, consider giving mum the gift of a more secure financial future.
This Mother’s Day, we at SingSaver.com.sg encourage you to go beyond having brunch out. There are many ways to show love and gratitude to mum, and this holiday can mean more than a chance to give away a bag or a nice card.
If you want to give a gift that’s truly unique, why not do something to secure your mum’s financial future? It might not be as glamorous as new jewellery, but mum will thank you for it later on.
Here are some steps to help ensure mum is comfy in her later years.
Top Up Your Mum’s CPF
The Central Provident Fund (CPF) contributions used to be lower in the past. This means that some older Singaporeans may not have sufficient savings for a comfortable retirement, or are at risk of having their Medisave wiped out from a medical emergency. This is especially true of those who did not earn much until later in life.
This Mother’s Day, consider making a pledge to top up your mum’s CPF. It can be a one-off sum, or a regular monthly top-up; even just S$50 a month can make a big difference over several years.
Pledge to Pay a Portion of the Mortgage
Every repayment on the flat eats a little more into your mum’s CPF. The HDB Concessionary Loan, for example, has an interest rate pegged at 0.1 per cent above the prevailing CPF Ordinary Account (OA) rate.
Now that still isn’t enough to beat the interest on most CPF accounts (up to 3.5 per cent for the OA), but paying for the flat still chews up a big portion of mum’s retirement funds. Also, don’t forget she probably had to make a hefty down payment when first buying the flat.
You can either pay back some of the mortgage by giving it to your mum in cash, topping up her CPF, or – if the financial situation is tight – even consider becoming an official co-borrower to lessen the burden.
Buy Mum an Endowment Plan
Most of the time, parents buy insurance plans for their children. But why not consider doing it the other way around?
Consider buying a 10-year endowment plan, which will see mum get a big pay out when it matures. She can use it to boost her retirement savings, or pay off any existing loans.
Alternatively, you can look at more short term goals. You may not be able to buy her a trip to Europe or a walk-in wardrobe, but a five-year endowment plan can give mum the budget for such luxuries, once it matures.
Get Mum a Supplementary Card
Want to help mum with the groceries, or the petrol bill? It can be inconvenient to tally up how much she needs every week (also, she’s probably hiding the real number from you, to ease your financial burdens).
Consider getting her a supplementary credit card instead. She can use it when she goes shopping, even when you’re not around. You’ll also get cashback and reward points, which is a great way to save. Or you could give the reward points to mum, and let her pick from the gift list.
Help Mum Pay Off Her Debts
Does mum have any outstanding debts besides the mortgage? Ask if she has any credit card debt, personal loans, or credit lines with outstanding amounts. There’s a clever way to help her trim some of these debts.
Say your mum has a credit card debt of S$5,000. The interest rate is around 24% per annum. You could take a cheap personal loan, at around 3% interest, to pay off mum’s debt. When you deal with the personal loan, you will be faced with much smaller repayments due to the lower interest.
On top of that, this will help to improve you and your mum’s credit score.
A Thank You To Mums
This Mother’s Day, SingSaver.com.sg would like to extend a big thanks to mums everywhere for their many sacrifices. We hope you have a meaningful Mother’s Day with the whole family.
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By Ryan Ong
Ryan has been writing about finance for the last 10 years. He also has his fingers in a lot of other pies, having written for publications such as Men’s Health, Her World, Esquire, and Yahoo! Finance.