Dab before you suffer
You may have heard this advice many times: Build an emergency fund with at least six months of expenses.
But Ms Evy Wee, Head of Financial Planning, Investments and Insurance Solutions, DBS Bank, recommends those with financial commitments like a home loan to have more as a buffer.
“Regardless of the evolution of interest rates or the choice of mortgage formulas, we strongly advise borrowers to set aside sufficient funds as a buffer in the event of further interest rate increases or unforeseen circumstances”, she says.
“Ideally, one should also set aside some cash or cash savings that can be used to pay their monthly mortgage payments for the next two years,” said Mrs. Wee.
This would give you plenty of time to restructure your loan if necessary, or even sell the property if you run into financial trouble.
To better fight inflation, Wee encourages people to take advantage of higher-interest savings tools. She gives examples of bank savings accounts such as the POSB Save-As-You-Earn and DBS Multiplier, as well as options such as Singapore Savings Bonds (SSB), Endowment Insurance Plans or Government Funds. Money Market.
Individuals should also proactively review their spending and financial goals regularly, and put in place an overall financial plan that includes a diversified portfolio.
DBS or POSB customers can use the DBS NAV Planner, the bank’s digital financial advice and pension tool. Using the NAV Planner, they can create a personalized budget with savings and spending goals.
The AI-powered advisory tool also helps identify and close insurance and investment gaps, or even project revenue streams.
This is the third installment in a four-part series titled “Winning the Race Against Inflation”, in partnership with