Having insurance is great when
the universe decides it’s time to give you a major (or even minor) problem. But when you can get a policy for practically
anything, it’s easy to spend more on protecting your life than living it. Don’t
worry, though. We can help you keep these expenses under control while still
getting the coverage that you need.
Here are ten ways to be
protected for less:
1. Assess Your Needs
Rather than buying a coverage
simply because you think you should, it’s important to consider your specific
situation. Your life today and your future plans should dictate what insurance
policies you need and how much coverage is appropriate.
Although there are lots of
factors to consider for each type of insurance, you should think about the
following to determine your needs:
Your assets: More assets (cash, investments, businesses, property, etc.) may
mean more insurance
Your family:Having dependents typically requires more coverage
Your health: Poor health could necessitate a more robust medical policy
or more life insurance
2. Shop Around
Before committing to any
policy, get pricing from multiple companies. You may be surprised at how much
variation you see. And remember — don’t just set it and forget it. It pays to
do this before every policy renewal.
3. Bundle Policies
As you get quotes for coverage,
ask each company for a bundle price (rider policies) on the types of insurance that you need.
You could score big savings and simplify your bill-paying
4. Get a Discount by Employer
Some employers might be able to get you a better deal
on health, life, and disability insurance if you bought them from certain insurance company. Check with your HR department if there are any insurance companies that can offer you such deals.
5. Raise the Deductible
Increasing your policy’s
deductible could be an easy way to save a few bucks each month. Be sure,
however, that you can cover the higher deductible if you ever need to make a
claim. Recommended Post: Is Whole Life Insurance a Scam?
6. Keep Your Credit Report Clean
Poor credit history can cost you big time. Insurers may assign you an insurance score (similar to a credit score), with lower scores
resulting in higher premiums. They believe, right or wrong, that a low score
indicates irresponsibility and therefore more risk.
7. Save on Car Insurance
If you want to own a car, you need car insurance. The
good news is that you can defray the expense with tons of different discounts. You might be able to save cash by comparing the offers between different insurance companies or driving safely (being an accident-free driver can save you a lot of money on insurance).
8. Save on Homeowners Insurance
If you have a mortgage, you’re
probably required to have mortgage insurance - especially if you are buying a HDB. If you are buying a HDB, you probably can't save much since it is a requirement to have mortgage insurance and they are pretty decently priced. However, if you are buying a private property, you can consider if you want to get mortgage insurance or life insurance with a higher payout. The logic is: the mortgage insurance is used to pay for your home in the event of anything bad happens (fire, or if the buyer dies). And the insurance is usually required if you have a mortgage loan. Once your mortgage is paid up, you generally do not really need to have mortgage insurance - that means the money you have paid for it is technically "gone". Rather, you could have just bought life insurance with a higher payout that can cover both the require expenses for your dependents as well as pay for the mortgage. This is more complicated and best to seek advice from a licensed insurance agent.
Tip: Use this guide to take an inventory of your belongings and determine the
value of your stuff, which gets factored into your insurance requirements.
9. Save on Life Insurance
If you have a family to protect
or want to leave loved ones a little something when you’re gone, you may want
to purchase life insurance. There are a few different types, each with their own pros and
cons, but generally, the most affordable type is term life insurance. Term life
insurance will pay your beneficiaries a specified amount if you die within a
certain timeframe (usually 10-30 years). There are a number of ways to save on life insurance such as paying the entire year’s worth of
premiums upfront or getting a volume discount (aka getting more insurance for
Tip: Try this calculator to see how much life
insurance you may need.
10. Save on Health Insurance
It’s no secret — medical care
is crazy-expensive. Adequate health insurance can save your wallet from a
beating if you become seriously ill or injured. If you’re in good health,
don’t go to the doctor frequently, and have a cash reserve, consider saving
money on your monthly premiums by choosing a plan with a high-deductible.
You’ll pay the full tab if you go to urgent care with the flu or a sprained
ankle, but you’ll (hopefully) pay less overall each year due to premium
Tip: Although an "all medical expenses paid for by Insurer" is a very happy thing to have, the premiums will also be exceptionally high, which might not be that much of a happy thing after all.
Insurance can be a significant
line item on your budget, but there are many ways to minimize the expense.
While this article isn’t an exhaustive list of ways to save, it gives you a
good start to being covered affordably.
You have tons of debt that you want gone. But you also have other important financial goals, like saving money, that need your attention. These competing priorities can make you feel like you’re trapped in a chicken or the egg cycle. If you pay down your credit card debt, you’ll have more wiggle room in your budget and can save that extra cash. But, if you save more money, you won’t have to whip out your credit card next time an unplanned expense pops up. So do you pay off debt or save? The short answer is: it depends
Here’s your plan of attack to slay debt and pad your bank account:
Divide and Conquer
To work on both goals simultaneously, you’ll have to split your available resources between them. But, you need a clear plan to ensure that you allocate your dollars in the most effective way.
To get started, prioritise your debts and savings goals, keeping these things in mind:
High-interest debt will sink you. If you only make the minimum payments on your credit cards, you’ll be in the debt for years and pay potentially thousands extra in interest. Get rid of this debt first.
Lower interest debt isn’t as urgent. While you definitely want to pay off all of your obligations, “good” debt like student loans and your mortgage do less damage to your financial health - as long as you pay them on time.
An emergency fund will save you in a pinch. A cash reserve will keep you from going further in the hole when something breaks or you lose your job.
Start saving for time-sensitive goals ASAP. The holidays, your sister’s destination wedding, and your car COE renewal are all known events. Save away a little bit here and there in the months leading up, and you’ll be able to pay for them in cash with ease.
Don’t ignore retirement. It may seem like a million years away, but delaying saving for retirement will have long term negative effects. You’ll miss out on the compounding interest that actually works in your favor.
Choose the Right Mix
Once you’ve got your priorities in order, you need to divide up your funds in a way that makes the most sense for you. For example, from your monthly salary, you could put 5% into retirement, 20% toward your credit card debt, 10% toward your savings goals, and the rest to cover your monthly expenses. As you pay off debt and your goals are completed or change, be sure to adjust your mix accordingly.
Remember: While there are some good guiding rules of thumb, how you manage your money is up to you. Personal finance is personal!
Find the Dollars
To make faster progress toward your financial goals, try freeing up more of your existing resources, increasing your cash flow, or both. Here are some steps you can take today:
Review your spending. Is there anything you can scale back on or remove? (Netflix, Spotify, Magazine subscriptions, etc)
Buy smarter. It doesn’t matter if you’re getting groceries, clothing, or shopping online, there are countless ways to get what you need and come in under budget. Be it buying on big days like double 11, or using the credit card that gives you the best rewards for your purchase.
Earn more money. Consider picking up extra shifts at work, getting a second job, taking on freelance clients, or selling some of your unwanted stuff.
Remember: While it’s tempting to spend or reward yourself for paying down your debts, be sure to use the bulk of your budget savings and side income for your debt pay off and savings goals.
It can be overwhelming to juggle multiple, seemingly-competing financial goals. But if you proactively map out what you need your money to do, you can strike a balance that allows you to live your best life.
Life’s usually pretty amazing. But when it throws an emergency at you, can your wallet handle it? According to a recent study by the Urban Institute, nearly 22% of adults struggled to cover a $400 unexpected expense. People between ages 18-34 were hit the hardest and were more prone to using risky, high-interest means like credit cards to make ends meet, resulting in greater financial stress.
To avoid facing the same fate, you need to build and maintain a healthy emergency fund. What’s that? It’s a pool of money that’s only gets used when life throws you a major curveball. That way, when your car breaks down, your pet gets sick, or you lose your job, you’ll have the cash stashed away to deal with it without taking on more debt.
Follow the steps below and you’ll be well on your way to dealing with the unexpected with ease.
Determine Your Needs
Since everyone’s situation is different, there is no hard and fast rule about how much you need to have in your emergency fund. However, the collective personal finance mind says that you should strive to save 3-6 months of living expenses. If you’re the breadwinner for your family or your income fluctuates, it doesn’t hurt to save more than 6 months just in case.
To gauge your essential monthly expenses, take a look at your budget (or create one) and add up all of your must-haves like shelter, food, transportation, utilities, medicine, minimum debt payments, etc.
Remember, since some of your expenses can vary month to month, be sure to save yourself some extra money for those variables. Next, multiply your monthly budget by the number of months that you want to cover. The total is your emergency fund savings goal.
Open an Account
Your emergency fund should have its own account that you can tap into when needed, but that you won’t see or touch regularly. This will make it tougher to spend the money on other, less dire situations. And, although it may be tempting, avoid putting the funds into risky investments like stocks because you could lose money if the market declines. To get the best results, consider putting this cash into a flexible asset like Singapore Government Savings Bond (SSB) or a high-yield savings account. It will be safe, separate from your day to day finances, and will actually grow a little due to the slightly higher interest.
Stockpile the Cash
The first two steps are quick and easy to complete. However, depending on your needs and your means, you could be in this phase for a long time. Saving thousands (maybe even tens of thousands) of dollars is a daunting prospect.
Don’t be discouraged! Start small and initially aim to get a few hundred in the bank. Then, work your way up and celebrate each milestone. What you’re doing isn’t easy. But when life inevitably throws a tantrum, it will be worth it.
Here are several ways that you can expedite the stockpiling process:
Cut expenses and bank the savings. Tight budget? Check out these tips.
Automate your savings. Set up a regular transfer from your normal account to your emergency fund account.
Earn more cash. Think about starting a side hustle, working overtime, or selling your unused stuff.
Put windfalls to good use. Gifts, bonuses, and tax refunds can make your emergency fund balance soar.
Remember: Don’t stick your hand in the cookie jar unless it’s a true emergency. (Getting a last minute invite to go on a cruise doesn’t count!)
Tip: While building an emergency fund needs to be a priority, it’s OK to juggle more than one financial goal. For example, if you have high-interest credit card debt, it’s a good idea to get that paid off ASAP. It’s important to find the right mix of saving and debt pay off for your situation.
Move on to the Next
Now that you've saved up your emergency fund, you’re in a great position to ramp up (or start) saving for retirement, put money aside for planned home repairs or upgrades, or open an account to fund the vacation of your dreams. You can also put more money toward your mortgage, student loans, or other debts. Of course, if you take money from the emergency fund, you should replenish it as soon as possible.
Building a solid emergency fund doesn’t happen overnight. Just like with retirement, it takes discipline and patience to save a large amount of money for “someday.” But — having that well-inflated cushion will allow you to rest easy and fully focus on living your best life.