[_CPCG_]

By: Zeng Han Jun, CPCG, Singapore



There are countless of financial forecast reports that are being published 24 hours a day. Some of them predict that the coming months are a disaster and some look upon the next few months as an opportunity period. What do all these mean for the average household? No matter how things turn out to be, the average household still has to maintain their cash flow to survive. However, maintaining a consistent cash flow may not be an easy thing to do now, so it will be wise to stock up on some cash and pay attention to some of the financial matters that you have never noticed before.

Credit cards and personal loans



It may be a good idea to consolidate all these debts into one loan. These types of credit facilities are priced at an expensive interest rate and by restructuring them; you will be able to make good use of the low interest rates now. Depending on your spending behavior, you might not need to consolidate your credit cards if you are the type of person who always clears the card debts immediately after you charged. However, if you are chalking up large amount of card debts and always trying to meet your installments, why not consider a consolidation? From an interest rate of 20% for credit cards, you might be able to consolidate it to a 2%. Now that is a lot of savings.

Switch to a smaller house



Maintaining that dream condo might be a little difficult lately, especially when you are not so sure about bonuses anymore. Instead of struggling to meet the monthly installment every month, maybe you can switch to a smaller apartment and shave off the burden of keeping up with that high installment. It might be a tough decision for certain people. Especially if they have decided to stay long term, but hey, if you cannot keep it, perhaps letting it go might be better in the long run. Selling off a house may not be an option for some though. The reason being that in certain areas, the valuation has dropped by so much and sellers might have to top up some cash when selling.

Refinance your housing loan



Your home loan may be the biggest ticket item of your entire life. Being the biggest ticket item, it is therefore logical and sensible to pay extra attention to it. Interest rates attached to housing loans sometimes creep up high on you without you even knowing it. Talk to your advisor if you think your housing loan is getting a bit difficult to manage. Do not wait until the last minute before you do something about it. Refinancing your home loan with the right interest rate, terms and condition is the best method to save a significantly amount of money from your monthly bills. However, just like selling off your house, you might not be able to refinance due to the sharp drop of valuation of your property.

Dump that car



Public transport is not such a bad idea after all. Taxis are actually a convenient source of transport now, and it is even more so when you decide to share the cab with others. Freeing yourself from that car can save you from recurring fees such as road tax, fuel charges and parking charges. Lets think about it. If your job does not require you to travel often, and your family is pretty small, then it does not make much sense to own that car at all. You might as well travel in taxi, bus or mrt and you can save quite a bit from there.

Reduce usage of your hand phone



Use a landline when ever possible. You can save a lot from using a landline and it is safe to your health as well. I heard from one of my clients that in Japan, the trend is that people over there are starting to use more of landline as an alternative to hand phone. It is because of the radiation emitted by a hand phone is thought to be harmful to health. Anyway, the main point here is that, it is cheaper to use land lines compared to hand phone.



Zeng Han Jun is a prolific writer and the Business Financial Manager of Chan & Partners Consulting Group, based in Singapore. He actively contributes articles about business and finance on a weekly basis, so as to share his knowledge with the financial community. He has been directly involved and plays a crucial role in marketing and sales of several businesses in CPCG. He also provides advice on various kinds of mortgages and construction financing for private individuals. Till date, he has assisted countless clients in securing mortgages for investment, commercial and residential properties, plus taking over of businesses.

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[jbowyer]

OK, I'll comment on two of the five suggestion.

Switch to a smaller house

Maintaining that dream condo might be a little difficult lately, especially when you are not so sure about bonuses anymore. Instead of struggling to meet the monthly installment every month, maybe you can switch to a smaller apartment.

Since I was an officer in the U.S. Air Force during the 1970s, I have always maintained "A house [or condo/apartment] should be a HOME, not an investment."

In the current global Credit Crisis, which derives primarily from people buying houses beyond their means, I am just laughing and thinking, "I told you so."

Are there really people in the world who buy a condo on the assumption that they will receive a bonus every year, as the above quote states? What idiots!!!

When we are home, my family doesn't need too much. A desk for each of our computers. A television. A kitchen with a nice table for family meals.

A yard? Why would I want to waste my time working in a yard? BORING.

Our family prefers to spend our time in activities OUTSIDE of our home. Sports. Shopping. Ski trips. Scuba diving trips. Visits to major European cities.

Why "struggle to meet the monthly installment" when a home is just a place to flop in the evenings?

Dump that car

Public transport is not such a bad idea after all.

Amen.

I've only owned two cars in my life (once in secondary school and once in Omaha, Nebraska because the bus only arrived every 40 minutes), and I haven't owned a car for the last 19 years because the public transportation system in our current hometown--Brno, Czech Republic--is excellent. Even throughout Europe, public transportation is wonderful.

One summer, my wife and older son went scuba diving in Croatia. My younger son and I planned to meet them in the middle portion of Italy for our family vacation. Thus, my wife and older son travelled from Croatia to Italy, and my younger son and I travelled from Brno to the same destination. We all handled everything by public transportation. No problems. In fact, given that both of our kids were younger than teenagers at the time, I'm rather proud of our accomplishment.

Cars. Look at them seriously. They are SO inefficient. Will lots of people lose their jobs in the auto industry if everyone switched to public transportation? Of course NOT. They could simply switch to making trams, trolleybuses, buses, and the related components.

Yes, I know. Many people lower on the human evolutionary scale can't live without their cars. It's like an extension of their bodies. Sheez--what a boat anchor to carry around. I've heard other snobs complain that too many people on public transportation stink--they don't want to associate with the common rabble. What an excuse! Personally, I think they like cars because they can pick their noses in private, which they can't do on public transportation.

[bolts]

This crisis will be a critical lesson to many: on why it is necessary to be financially free. There is no such thing as having rolling good times forever.

If this it is not possible to be financially free now, at least aim to be debt-free first.

[ukey]

I'm just wondering about the consolidation of credit cards bills. Is it really that important? Luckily I've never needed to owe any bank money on unsecured credit, but from what I hear, in addition to paying up the minimum balance, try paying up your cards from the most expensive to the least expensive, then from smallest to the largest debt, and put into cold storage those cards which had been paid up, and you would be better off.

Its more towards human emotions and clearing up more debt as time goes by, like when u start a marathon, you don't cheong all the way from the start, or even try to main equal speed all the way, but u start slow, let ur body warm up and get used to the momentum, and then build up to a constant speed.

Similarly, by paying up the minimum, and then put whatever u have left into the most expensive debt, once that is cleared, you are left with easier debts to pay up and have more left to pay up the next card.

not sure if I make sense here, but think about it ba.

[Mische]

Thank you for sharing this, especially about the credit cards. It's very helpful information.

[echealth]

Depending on what country you live I imagine credit card debt won't matter as no one expects many Americans to pay back their credit card debt. Indeed if the dollar inflates and subsequently devalues as many expect I can't imagine the US paying its debt.

[XHD2560x1600]

These are dumb suggestions at best.

Credit Cards... No one needs to pay anything. Bankruptcy = Clear of debt, Easy and done.

Dream Condo? Who are we bill gates?? Not many people have a "dream condo" to give up... lol

Refinance your home loan, The only suggestion that has any validity.

Dump your car for a taxi? I don't know where you live but a taxi start out at $5.00 as soon as you get in and easily reach $20-30 for a ride if your going over 15-20 miles. it would be much cheaper to get a bicycle or moped.

Use a land line, well obviously anyone who has a cell phone that cost money to call and a land line at reach is going to use the land line unless they are inconsiderate of money.