(By: W. Milo)
Most people subscribe to the fact that cash flow position can only be improved by a pay increment or changing to a better paying job, despite longer working hours and more responsibilities. If this sounds familiar, what you probably failed to see is how you can use your time and make some minor adjustments in habits and lifestyles to change your life. Here are some useful tips that you can consider:
- Convert your junks into cash - In every home, there are bound to be stuffs that are considered "old" or "out-dated". There may also be some gifts that you do not like or are unlikely to use, such as CDs, VCDs, watches, golf clubs, musical instruments or some electrical appliances. Why not bring it down to a second hand shop to convert them into cash? In Singapore, one of the popular and established second hand shops would be the Cash Converter.
- Participate in a flea market or second hand bazaar - If you believe you are a born entrepreneur with great marketing skills, and think you can get a better price for your stuffs, why not consider a flea market. But before you rush into that, do consider whether you have enough items to sell, at what price and of course, whether these items will appeal to others so much so that they are willing to pay for them at your desired price. These are necessary considerations as there is always a registration or rental fees involved in getting a stall or a lot. The common and popular flea market locations in Singapore are those organized by Tanglin Mall, Far East Square, Clarke Quay Sunday Flea Market, Holland Village and Turf City Flea Market.
- Sell valuables through the internet - If you are the internet-savvy type and hate the chore of lugging stuff to the flea market, you can bring them online and sell via an auction or classified ad. Prior to posting your items up for sale, understand the demand and supply of the items you are considering to sell. Thereafter, take a good quality digital photograph of the item to be uploaded into the net. This is the key factor to attract a sale, as "A picture speaks a thousand words". Finally, make a realistic but reasonable offer price. The highly competitive Singapore sites are eBay and Yahoo.
- Reduce your petrol cost and parking charges - By planning the shortest route to reach your destination and deciding on the most affordable place to park, you will be surprised how much difference it can make to reduce your petrol and parking expenditure.
- Patronize shops or food places without Goods & Services Taxes (GST) - Do you know that whenever you purchase an item or food from places that do not charge GST, you will instantly save 5% (or any amount taxed) from your bill? Some may think that the 5% (which is expected to increase to 7% in 2007) savings will not make a substantial difference. Consider this: If you spend $50 per day dining at a restaurant, at the end of the month, you could have paid $70 or more for GST. This effectively translates to S$840 per annum, or a 2% tax on your income (assuming your annual income is about $30,000).
- Use your credit cards to your advantage - Credit cards have always been considered as the "root of all evils" with the surge in the number of bankruptcy cases in recent years. However, these "evils" issued by banks do offer loads of benefits when used wisely. Many would probably ask what sort of benefits credit cards offer, apart from charging the card users annual fee, exorbitant interests and late charges. In fact, credit cards generally offer attractive discounts with many participating merchants and some even offer discounts on top of the existing discounts offered by the merchants. To benefit from these card tie-ups, be sure to pay your card bills promptly and always ask the bank to consider waiving the annual fee. If they are unable to waive the fee, consider cancelling that card and apply for another card with another bank that offers annual fee waiver. Another advantage of using credit cards are the rebates in the form of reward or dollars that the banks offer to their customers. Between the two systems, the cash rebate is a better option since you are not restricted to the participating merchants you need to spend with, as these are indeed real cash. In other words, your cash rebate becomes "additional discounts" on your purchases (assuming, of course, if you pay your card bills on time). The 2 cards that offer the dollars reward programs are Citibank's Dividend Card and POSB's Everyday Card.
There are many more approaches that you can take to improve your cash flow and the above are just a few to consider. The ultimate question remains whether most people would bother to make some adjustments to their lifestyle or habits to their advantage. In short, the avenues are available but only YOU can help improve your own cash flow position.
Disclaimer: Please note that the information contained above is the personal view of the author and does not constitute any legal, tax or other advice offered by the author. Nothing provided above shall be construed as advice or encouragement from the author to you regarding the making of any commercial, business or investment decision. You are put on notice to obtain independent professional or financial advice before making any decision or taking any action in relation to any of the information raised above.