By Credit Bureau Singapore
Rejoice because it is that time of the year again where the unwedded receive their yearly ‘bonus’! Apart from the scrumptious food and heart-warming fellowship with family and friends, collecting red packets is a major highlight of this season.
Many would use their red packet money on Blackjack, Poker or Mahjong. And if you are one of them, how about changing things up this year? This article will provide you with a list of what you can do with your red packet money.
1. Save Up
Saving your red packet money is always a wise choice as many benefits ensue from this good habit. One such benefit is having emergency funds for unexpected situations. Life is full of uncertainty, and you never know when you will need liquid cash. Hence it pays to be financially prepared all the time.
Kickstarting the habit of saving can put you one step closer to buying your dream car or house. Such big-ticket items are very costly, and most people will have to take a loan. Instead of financing these loans with just your monthly income, they can be serviced by your savings. Eventually, you can make a more significant down payment for these expenses and take up a smaller loan with savings accumulated. Everyone should be forward-looking and predict large purchases they want and start saving up early for it.
We suggest saving your red packet money in a bank account just for savings. Cultivating a habit of saving at a young age will help you prepare for any uncertainty in the future and retirement. The practice of saving will strengthen as you progress in your career and bring you a step closer to your financial goals.
2. Invest For Your Future
Investing is a way to ‘grow’ your red packet money. Even though you might not be able to utilise this money momentarily, there is potential for that sum of money invested to multiply into a bigger pot. With a couple of hundred dollars, you can invest in yourself or a loved one by buying a hospital plan or put it in a high-yield savings account. All these may sound like boring ways to use your red packet money, but always remember that the best time to invest was yesterday and the next best is today.
3. Donate to an Organisation
You can donate a part of your red packet money to help the less fortunate and give back to society. If you are unsure which organisation to donate to, find an industry or group of people you are inclined towards. For instance, if you have a strong passion for underprivileged children, you can look for an organisation that uses these donation proceeds to supply daily necessities and provide education to these children. Donating to an organisation you are passionate about will make you feel more contented. It may even be the starting point in your charitable journey.
4. Settle Any Liabilities
Another way to use your red packet money wisely is to settle any outstanding bills or study loans that you might have. There are multiple advantages that come with paying your bills and loans on time. Firstly, prompt payments will prevent you from incurring unwanted interest or late fees. These fees are unnecessary and will only add to your remaining outstanding debts.
Early payment of your loan can lighten your financial burden so that you can accumulate more savings for yourself. Particularly for student loans, the principal amount usually starts accumulating with interest once you graduate. By paying off your student loan (if you have one) in advance, you will have lesser financial debts to settle after you graduate.
Lastly, paying your bills and loans on time can improve your credit score tremendously. A credit score indicates how likely an individual is to repay their debts and the probability of going into default. A timely repayment track record will prove that you are responsible and financially stable. Your credit score is essential as some employers will also request a copy of your credit report to access your creditworthiness during pre-hire background screening. A good credit score will increase your chances of securing an internship or even a full-time job, especially in government agencies or the financial industry.
We hope you found these tips helpful in building good money management habits.
To check your credit score, you can purchase a copy of your credit report at Credit Bureau Singapore! You can also view a sample credit report with a detailed explanation here.
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