- December 30, 2019
- |Finance, Legal Moneylender, Loans, News
- 0
The common financial measures like having a financial plan, saving money, setting up for retirement, and buying life insurance are followed by every Singaporean. But when you are an expat, you need to take a few additional steps to ensure that your finances are safe. When it comes to investments and taking serious financial decisions, we all tend to make mistakes. But when you are an expat working in Singapore, you need to avoid making mistakes so that you don’t end up facing huge losses. Here, we will talk about the most common financial mistakes that expats make in Singapore, and suggest ways to avoid those mistakes.
Neglecting Health Insurance
One of the biggest mistakes that most expats make is moving to Singapore without insurance. You can be uncertain about the risks you will face in the new city and country. If you are uninsured, a minor injury can become significant and result in major expenses. Therefore, compare various health insurance options and buy the right policy as soon as you reach your new city.
Overlooking Insurance Cover Details
It is very natural to miss out on the terms, coverages, exclusions and other details of various insurance plans when you have different providers and policies to choose from. However, missing out on any cover and exclusion details before buying a policy can lead to confusions at the time of claiming returns. Thus, pay much attention to all the terms and conditions, things the plan cover and excludes, return guidelines and other important information when comparing insurance options and buying one.
Closing an Existing Bank Account
When moving abroad to a new country, most expats tend to close all bank and credit card accounts in their home country to start anew. If you are planning on doing the same, you are on the wrong track. Having an account in your home country always serves as a backup option in case you lose your investments or face any other financial crisis. Also, depending on your home country, closing your bank and credit card accounts at once can affect your credit score. Thus, let your bank and credit card accounts be there. These bank account can also act as your emergency cash accounts.
Missing Out On Taxes
A lot of expats tend to forget that they need to change their view for taxes after they change locations. As a result, they end up paying more tax or miss out on taxes altogether. Singapore provides a very favorable taxation system that includes reduced tax rates, double taxation treaties for the minimization of taxes, and other incentives specially for expats. Not only this, no tax is deducted from the earnings beforehand. Which means that it is easy to spend the tax portion and then face crisis later. Therefore, know everything about Singaporean taxes and make sure you pay off the taxes before the deadline.
Not Diversifying Your Investments
As an expat, you may not know the best financial facilities to make investments. If you don’t hire a financial advisor, you make even make investment mistakes due to lack of knowledge. As a result, you may make investments in just one option. You simply can’t rely on one type of investment as you may not know of the different risks in that sector. Therefore, your investment portfolio should be diverse, and you must invest in various facilities such as bonds, stocks, insurance, equities, etc.
Not Using Credit Card Perks
If you have recently moved to Singapore, we would like to tell you that the credit card perks here are brilliant. The points accumulated on credit cards can obviously help you buy attractive things. However, some credit cards also offer awesome air mile deals and discounts at fancy bars, restaurants, spas, and designer stores. So check with your credit card provider for the offers and perks you have on your card. If you are planning to apply for a credit card, compare your options and pick the one with the best perks that fit your lifestyle.
Overlooking Budgeting
If you are already great at creating your budget by considering all the fixed and variable expenses, you will continue budgeting well in your new city as well. But as an expat, you automatically have a few more expenses and financial obligations to look after. Although you might live in a foreign country, you’ll likely still have financial obligations at home. Thus, don’t overlook the amount you have to send back home every month. And while sending money, you also need to keep the transfer fees in mind. Most Singaporean banks offer free and same-day online fund transfers. So check with your new bank for the transfer charges and add them as well while budgeting.
Overspending
It is very easy to get carried away and overspend when you are in Singapore. The lower tax rates and cheaper daily essentials make shopping and living a luxurious life easier. Upon arrival, you might develop a new-found love for brunching, weekend getaways to exotic locations, and generally living the high life. But if you continue doing this, you’ll hardly have any savings, and you will use up your extra cash for not-very-necessary things. This way you will hardly have any investments. Hence, be mindful of your expenses and way of living.
Now that you know about various mistakes that most expats make in Singapore, you can be alert and see to it that you avoid them in the ways mentioned above. Follow the solutions mentioned above and you’d hardly face any financial downs in this country.
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