Adulthood can be daunting. Faced with the unknown – a global pandemic, salary cut and retrenchment – preparing an emergency fund seems like the next best step to take. Earlier this year, we asked how you save for emergencies. Here’s what you said, with some reminders for an even healthier portfolio.
Ensure a portion of your savings is readily available as cash
Image credit: Unsplash
A common method among our followers is depositing a portion of their savings in high-yield savings accounts. Knock on wood, you never know when you’re going to need the money, but knowing that at least some of your savings are immediately available can help you cope with emergencies.
Investment works, but not always
Image credit: Unsplash
The logical next step would be to funnel some savings into purchasing securities. The benefits of this approach are obvious, but selectivity is important. In general, the investments you use to grow your emergency fund should have a short maturity period, whereupon they can be easily converted to cash if needed. Sometimes a shorter lock-in period can mean less attractive returns, but such a trade-off can be worthwhile when caught in a financial emergency.
#TiqOurWord With Tiq 3-Year Endowment Plan, you get high guaranteed returns of 2.10% p.a. in just a short 3-year maturity period. It also comes with life protection and Financial Assistance Benefit for the Novel Coronavirus (COVID-19).
Round off the edges with insurance savings plans
Image credit: Unsplash
Insurance savings plans, also known as endowment plans, constitute a form of forced savings. Choose a plan with attractive guaranteed crediting rates and a short lock-in period, or one that allows withdrawal without penalty or interest clawback. Insurance savings plans form a comfortable middle ground in being less risky than investment and in providing more attractive benefits than popping your cash in the piggy bank.
Be disciplined with your savings
Image credit: Unsplash
Being this conscious about your savings strategy is the first step to healthy finances, but such an approach requires discipline to maintain. Start by funneling a fixed percentage of your monthly income to your emergency fund before dividing the fund internally. Consider online insurance savings plans and learn ways to digitally management your finances. Putting your emergency savings in a separate account from your regular savings can also prevent your reserves from being eroded by accidents or impulses.
Ensure your emergency fund doesn’t dip below a minimum amount
Image credit: Unsplash
Among the crises your savings should support you through is the loss of your job and other important income sources. As a rule of thumb, the value of your emergency fund should fall between 3 to 6 months of your current salary. Of course, the more you save, the better – but remember to allocate enough to longer-term investments for further goals. You can start saving from just S$10,000 with Tiq 3-Year Endowment Plan and enjoy the flexibility to apply and manage your policy online.
Never lose your cool
Nobody is immune to disasters. The Circuit Breaker is in place for safety reasons, but there’s no doubt that it’ll dent the economy. Hence, preparation goes a long way. With a financial support system this strong, you’ll have everything you need to get back on your feet no matter the outcome. And remember this: everything will be okay in the end; if it’s not okay, then it’s not yet the end.
[End]
Information is accurate as at 20 April 2020. This policy is underwritten by Etiqa Insurance Pte. Ltd. (Company Reg. No. 201331905K). Protected up to specified limits by SDIC. As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid. You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Tiq by Etiqa Insurance Pte. Ltd.
A digital insurance channel that embraces changes to provide simple and convenient protection, Tiq’s mission is to make insurance transparent and accessible, inspiring you today to be prepared for life’s surprises and inevitabilities, while empowering you to “Live Unlimited” and take control of your tomorrow.
With a shared vision to change the paradigm of insurance and reshape customer experience, Etiqa created the strong foundation for Tiq. Because life never stops changing, Etiqa never stops progressing. A licensed life and general insurance company registered in the Republic of Singapore and regulated by the Monetary Authority of Singapore, Etiqa is governed by the Insurance Act and has been providing insurance solutions since 1961. It is 69% owned by Maybank, Southeast Asia’s fourth largest banking group, with more than 22 million customers in 20 countries; and 31% owned by Ageas, an international insurance group with 33 million customers across 16 countries.
Discover the full range of Tiq online insurance plans here.
