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Re-charge Your Financial Well-being: Reflect and Revitalise

We are well into a brand new year. If you have not yet reviewed your personal finances, now is as perfect a time as any to take a close look at your financial well-being.

Just like having a medical health check which lets us know how physically healthy we are, reflecting on our financial milestones, taking stock and doing a financial health check will help us better understand how we are managing money and whether we are on track to achieve our financial goals – and if not, what changes are needed.

Here are 7 things to do to re-charge your financial well-being by taking the time to reflect the past to revitalise your financial health for the future.


     1. How much are you spending?

This question may appear simple and straightforward but without tracking your expenses, you could easily end up living beyond your means.

Persistent, excessive spending can lead to severe financial stress and spiralling debt, leaving you with insufficient savings to weather emergencies.

Keep a close eye on your spending to ensure that your overall spending is within what you earn.

     2. How much are you saving?

The key to successful and disciplined saving is to “save before you spend’’.

To put this strategy into action, consider setting up a separate savings account and transferring a fixed amount of your income automatically into this account.

But how much should you aim to save?  According to MoneySense, Singapore's national financial education programme, a good target to strive for is at least 20% of your take-home income. Of course, this is a guideline, and the exact amount can vary based your life stage and specific circumstances.

     3. How much credit are you using?

It is essential to keep credit card debt as low as possible. Continuously rolling over outstanding balances can lead to serious financial consequences.

Make it a priority to pay your credit card bills – you can pay either the minimum amount, more or in full, if possible and before the due date stated on your statement.

Given that credit cards charge typically charge an annual rate of interest of 25%, the outstanding balance can quickly snowball into a much larger amount if your purchases continuously exceed your payments.

You can check the status of your credit health by purchasing your credit report. If you are unsure about how to obtain and interpret a credit report, you can find out more in this article ( contributed by Credit Bureau Singapore (CBS).


     4. Set new goals

The transition from one year to the next also offers an opportunity to reflect on your financial journey and set clear goals for the year ahead.

You can use this time to review your financial milestones and learn from past experiences. Whether it's building an emergency fund, paying off debt, or investing for the long term, setting financial goals empowers you to begin the new year with a sense of direction and turn resolutions into actionable plans.

     5. Update your budget

As you set new goals or update existing goals, it is also a great time to give your personal budget a refresh.

Examine your sources of income, such as your monthly salary (have you received a pay raise?) and earnings from commissions or side gigs. Determine the average amount you expect to earn each month.

Next, after reflecting on your past year’s spending, make the necessary adjustments to your monthly expenses. Remember to factor in occasional expenses like going on vacations or buying gifts. This way, you can pro-actively plan for these expenditures ahead of time and set aside money in advance in the form of short-term savings.

Once you have listed out your income and expenses, aim to “balance” your budget. In other words, ensuring that your income equals expenses and savings. This means that you have allocated every cent of your income to expenses and savings.

The key is to ensure you have enough to cover your essential needs and save for your goals. If you are unsure where to start with budgeting, you can learn more by reading this article (URL: on the three simple steps of budgeting.

     6. Build your financial buffer

Have you ever wondered what would happen if you lost your source of income, like your job? It is a situation we all hope to avoid, but life can be unpredictable, especially in today's uncertain economy.

That's why it is crucial to have some money set aside for untimely expenses, such as medical emergencies or covering essential expenses if you face a drop in income or unemployment.

MoneySense recommends having an emergency fund that is typically 3 to 6 times your monthly expenses. This amount generally provides enough financial support to sustain you while seeking new employment in the case of job loss or emergencies.

If you haven't set up your emergency fund yet, a great way to kickstart it is by allocating a portion of your year-end bonus into a separate savings account.

For a comprehensive guide on setting up your emergency fund, read this article (URL:

     7. Protect yourself against financial loss

You should also assess your insurance coverage to protect yourself against financial loss.

Do you have sufficient life Insurance?   The Life Insurance Association of Singapore (LIA) suggests aiming for coverage that's approximately 9 times your annual income, though individual needs may vary. To calculate your specific life insurance requirements, you can utilise the CPF Insurance Estimator (URL:

Do you have adequate health Insurance?   For health coverage, LIA recommends having critical illness coverage at around 4 times your annual income. While selecting the right amount, consider the quality of healthcare services you desire and the level of income protection you'd need in case of illness or disability.

Can you afford the premiums? Remember to keep your insurance premiums for protection purposes within 15% of your income. This ensures that your coverage remains affordable.

Do you have family dependents?   If you have dependents, think about how much financial support they would require if you were unable to provide income for an extended period. Your family's daily needs should be factored into your protection plan.

Remember that health insurance premiums tend to rise with age, so ensure you can sustain the payments over the long haul. If you have any uncertainties, it's always a good idea to seek advice from a qualified financial adviser.

Parting Words

As we approach the year end, it is an ideal time to refocus on our financial well-being.

By examining our spending habits, prioritising savings, and managing credit wisely, we can ensure our financial health remains in excellent condition. Setting clear goals and updating our budget provides direction and practical plans for the future. Building an emergency fund establishes a financial reserve we can tap into when needed. Lastly, evaluating our insurance coverage ensures our protective shield remains strong against untimely financial loss.

With these seven steps, we hope you find them useful for reflecting on and revitalizing your financial health, setting the stage for a more secure and stable financial well-being in the year ahead.

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Credit Counselling Singapore

Published 8 December 2023.