If you are a millennial, chances are that you are still recovering from your recent wedding expenses, a house you just started paying for, a new family to support, and paying off your first car. And if not, at least you’re about to.
Compared to the past two years, more positivity is expected in 2022 as the economy picks up, the job market warms up and wages go up. All these are good news for millennials who have languished in an uncertain economy since the pandemic started. Once again, people can look forward to a more promising investment outlook, higher-paying job opportunities, and even a salary bump.
But before you go card-swiping, here are a few ways you can save while you enjoy your newfound fruits of labour.
Refinance your housing loan
If you had bought your house before 2020, your housing loan interest rate probably sits somewhere around 2 to 2.5%. Well, you might want to refinance your housing loan asap while the interest rates are down—most are below 2% nowadays. But do it soon as there is some speculation that it will go up in the near future. Now that you are paying less in loans, you can now invest a portion of your increased disposable income.
Sign up to utilities plans with energy retailers
If you haven’t already done so, do it. Most Singaporeans have some kind of work-from-home arrangement. Your computer, fan and perhaps even aircon now run more than eight hours a day, driving up your utilities bill, and the WFH experiment doesn’t look like it’s going away anytime soon. Electricity retailers offer competitive plans that can help you save on power bills.
Do bigger purchases asap
Before the GST rate is raised from the 7% now to 9%, slated to take place 2022-2025. Whether the government will do it in a staggered manner or a one-time event, of which there is strong speculation that 2022 will see some extent of a hike, you want to make sure you do the big expenses ASAP. So if you are planning to do home renovations, buy furniture, get wedded etc., you may want to relook at your plans.
But wait, don’t take a Grab down to Ikea just yet! You should work out if you will actually save more if you buy your stuff now. Will putting your money in investments yield more than the extra 2% in GST? Will your debt repayment be delayed? Will it eat into your emergency fund? These should also be factored into your calculations.
Put some savings in gold
As more and more millennials chase dividends and look for the next investment, don’t forget to diversify! Gold is a proven safe-haven asset that stabilises the risk profile of your portfolio. Not all gold-based instruments are the same; many gold investors prefer saving in physical gold for its non-correlated nature.
Yes, gold price may fall as demand for gold decreases due to people putting more of their money in a stock market on the recovery instead. But this is an opportune time to buy more gold; lower gold prices means you can buy more gold with less. Remember, as you invest more in volatile assets, hence raising your risk exposure, you want your hedging to commensurate too.
Hugo’s Gold Vault allows you to easily and affordably include gold in your investment portfolio by helping you save everyday and invest your savings in gold. Hugo allows you to buy gold starting from $0.01, such that no matter your savings amount, you can invest in gold for growth and protection at a level you are comfortable with.
There’s still a long way to reach retirement
Millennials have about 30 years before reaching retirement age. That is the amount of time their long-term investments have to appreciate. Yes, stocks generally perform better than gold in terms of yield, but their volatile nature means you should not put all your eggs in the hands of S&P500, Nasdaq or any other exchanges. You will want to also have an asset that appreciates in a stable fashion and is not correlated with stock market performance, so that you can earn good compounds confidently by the time you divest post-retirement. We cannot predict the future performance of gold, or any other investments for that matter, but we can take a reference from history.
Save as you spend
We live in a consumerist society now, and we love to spend. We get it, no judgement and it’s completely ok. To make spending productive, we should think about how we can save as we spend, and yet not impinge on our quality of life! Wait for sales, redeem e-vouchers like the CDC Vouchers and SRV Vouchers for food and discovery, use cashback features etc. To make it even better, use Hugo’s Roundups to squirrel away your spare change automatically every time you spend using your Hugo Card. Hugo protects and grows the value of your savings by investing it in physical gold in your Gold Vault. Below are some habits you can adopt to save more:
Implement a “24-hour” rule
Some items may look very tempting and being so easy to “Add to cart” is not helping. Practise taking time to think about your purchases (maybe even sleep on it) and you might realise you don’t actually need those products. Having a 24-hour rule to making a purchase also gives you time to search for more affordable alternatives or platforms with better deals.
Wait for discount seasons
There are plenty of discount seasons all year round so don’t rush to make a purchase when an item catches your eye! Look out for special dates like 11/11, seasons like the Great Singapore Sale or festive occasions like Chinese New Year and Christmas to enjoy major discounts.
Set goals and track your progress
Millennials are now at the prime of their lives. Career is progressing, life’s fulfillments (home, family, children) are at the cusps, income is on the rise. If you have good financial planning, you will know how to maximise what you have now, reap huge rewards in the future while avoiding preventable financial disasters. The process of setting financial goals now helps you assess where you are at now, determine your end goal, and strategise how to get there. You will become clear about what you have now and what else you need—a new role in a rising sector, a higher pay, a different skill etc.
Hugo’s Money Pots makes managing such goals and saving for them a breeze. It allows you to create financial goals and actively save for future spends you plan to make; it could be a post-COVID-19 vacation, a lavish Valentine’s Day meal, cash to learn a new skill, a new degree/course, or even expenses in 2022. Read more about Money Pots here.
Tracking progress is key
Having clear goals is good, but tracking makes it great. Constantly check in on your progress to ensure that you are on track to achieving your goal. Some #HugoHeroes break up their grand dream and set a Money Pot for each smaller milestones for better management.
Saving has never been easier
There are no more excuses for not being able to save. Unlike older generations that had to rely on manual ways of saving, we now have smart platforms that we can use to automate saving and investing to make financial management consistent and transparent! Hugo helps you to spend, save and invest effectively. Get on board today!