Dollar dynamo

Financial independence is a dream many of us share. It’s not just about having enough money when you’ve retired, it’s about having the freedom to live life on your terms. But how do you get there? It takes careful planning, discipline, and a strategic approach to managing one's finances. We’re going to take you through five key principles to streamline your finances and get ahead. 

‍

Set your goals

‍It may sound basic, but defining what financial independence means to you is crucial. What kind of lifestyle do you envision? How much will you need to sustain it? Here’s a simple formula to get you started: 

‍
Desired monthly retirement payout x Years in retirement = Retirement sum needed 

‍

This doesn’t account for unexpected costs but it gives you a ballpark figure to aim for. Knowing your end goal makes it easier to set specific, measurable, achievable, relevant, and time-bound (SMART) goals. Whether it's saving for retirement or in other cases, buying a home or starting a business, clear goals will guide your financial decisions.

‍

Know your finances inside-out

Now that you know where you want to be, how are you stacking up? Understanding your income and expenses is fundamental. Track your expenses for at least three months to identify patterns. Categorise your expenses in buckets that make sense for you. Some thought starters include housing, utilities, transportation and entertainment. You might be surprised by what you find - those coffee runs might be costing more than you thought! 

Use this data to create a realistic budget and set realistic budgets for each category so that you are setting yourself up for success. And, be sure to revisit and review your budget and make adjustments as needed! Life changes and your budget should be flexible enough to accommodate these changes. 

‍

Increase your income and turbocharge your savings

Planning and reducing expenses are great, but increasing your income can give your savings a real boost. Do you have a hobby or project you’re passionate about? Turn it into a side hustle! If you’re aged between 25 and 34 you’re in good company - one in four of your peers are already engaged in side hustles. More than half further indicated they might consider a side hustle according to people we spoke to for our GXS Progress Quotient earlier this year. 

Another way to increase your income is by making your money work harder for you. Consider putting it into a savings account with a higher interest rate (such as the GXS Savings Account, which offers competitive interest rates when you keep your funds in a Saving Pocket or Boost Pocket) or financial instruments that can stretch your spare cash such as Singapore Savings Bonds and Treasure Bills (T-Bills).

‍

Reduce debt

High-interest debt can be a significant barrier to financial independence. Loans can be empowering tools if you understand the different types available and choose one that suits your needs. The GXS FlexiLoan, for example, allows you to choose your preferred tenure and repayment date, making it a flexible option. 

And the proof is in the pudding! Within 12 months of launching the GXS FlexiLoan, customers have cumulatively saved S$4 million in interest. Additionally, we helped 100,000 dreams take flight with the disbursement of 100,000 loans in under a year.  

If you’re still trying to figure out why a personal loan might be more suitable for you versus a credit card or a cash advance on a credit card, check out this piece where we break down the differences and get into the nitty gritty of the matter.

Finally, focus on paying off debts as quickly as possible, starting with those that have the highest interest rates. Consider strategies like debt consolidation or refinancing to lower your interest rates. Find out if a balance transfer is the solution you’re looking for here. 

‍

Keep learning!

If you’ve made it this far, give yourself a high-five! Financial literacy is crucial for making informed decisions. Continuously educate yourself about personal finance, investment strategies, and economic trends. Resources like Betterzine, financial blogs, podcasts and books are great places to start. 

Whether or not FIRE is for you, these five principles are useful starting points to navigate your finances. By the way, if you’re keen to find out more about FIRE, check out our introduction to the concept. Which tip will you be trying out? Let us know at betterzine@gxs.com.sg.

‍

‍

Psst! Here's something else you should know:

By emailing GXS Bank and submitting your feedback, content, photo, video and/or other images, you agree to GXS collecting and using your email address and other data provided to contact you. Check out our GXS Data Privacy Policy. 

‍