How to Secure Your Family’s Financial Future
Every individual who has a family eventually worries about their financial future. The world we live in today may seem stable enough but you never know when things may turn sour. The best most people can hope for is to work hard and save enough money to ensure their family’s financial health. However, things are never as easy as they may seem. Tragedies happen all the time and such scenarios can easily ruin your plans.
Therefore, the best thing anyone can do is hope for the best and prepare for the worst. When it comes to securing your family’s financial future, you’ll have to assess your current financial situation and consider the options you have available. Choosing the best course of action may seem difficult but it doesn’t have to be if you take the time to research your options. With that in mind, here are a few ways in which you can secure your family’s financial future.
Plan your retirement
One of the things that should definitely be on your list is a retirement plan. You have to consider your financial health after you’re no longer able to work. The official retirement age in Singapore is 62 years according to the Ministry of Manpower (MOM). However, you can start withdrawing your savings from your CPF (Central Provident Fund) retirement fund as early as the age of 55. That’s not recommended though because you can only drain your account if you have less than $5000.
It also means that CPF won’t consider your account as a retirement fund in such case. On the other hand, if your OA (Ordinary Account) and SA (Special Account) balance exceed $5000 by the age of 55, then CPF will merge the two into your retirement account (RA).
Invest your money
If you manage to save some money over time, it’s better to invest it in something than just let it sit in your bank account. If you have the opportunity to earn good interest on your savings, it will most definitely contribute to your family’s financial future. As an example, you can choose an investment opportunity with minimal risks involved, such as an endowment plan.
You can research the best endowment plan in Singapore to find what suits you the most. Simply put, an endowment plan is a form of insurance investment. You pay a company a specific sum for an agreed time period, usually 3 to 5 years. You get a specific annual interest return from your investment and you get special benefits in case of death before the policy expires. It’s a good way to secure your money for a short time period and protect your family’s financial future in case something bad should happen to you during that time.
Pay your bills on time
As everywhere else in the world, Singapore also penalizes late bill payments. It’s not uncommon for people to be late with bills, credit card or even tax payments. Sometimes you simply forget or you don’t have money on you when the bills are due. However, late payments will only cost you additional funds that you can otherwise save for better purposes, such as securing your family’s financial future. As an example, late tax payments result in hefty fees.
A late fee is 5% with an additional 1% fee for every month the taxes aren’t paid up to 12% maximum. In addition, credit card fees can also be a financial burden you don’t really need. Most people only pay the minimum amount required for their credit card loan. This, however, is a really bad practice that can ruin both your personal finances and your credit score. Therefore, to avoid such extensive fees, try to meet your obligations on time.
Maintain your credit score
Your credit score is an important factor for your personal finances and for your financial health. Credit score in Singapore is rated from AA, which is the best, to HH, which is the worst. Your credit score determines your liability levels. In other words, how big of a risk you are to lenders, such as banks.
Any loan above $500 will take your credit score into consideration. If your credit score is bad, you may be denied for a loan, get a smaller loan than you need or get charged with very high interest rates. Therefore, in case you need a loan for whatever reason, you should have a good credit score to back you up.
Securing your family’s financial future depends on your financial habits and your willingness to save money. If you don’t make an effort to avoid extensive fees or if you don’t plan for the future, you won’t be able to ensure their financial stability.