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Four simple ways to find out if you really can afford something

   

How To Afford The Life You Want

Four simple ways to find out if you really can afford something
That would bring your total monthly obligations up to S$420 (S$160 for gym membership + S$60 for your phone plan + S$200 for transport and groceries). S$420 is around 19 per cent of your monthly income. This is just under the 20% ratio so, yes, you can afford it. However, if you later want to add a S$60 online game subscription, or your phone plan gets more expensive, then something has to go to stay under the debt ratio of 20 per cent. If you maintain an expense ratio of 20 per cent, you are less likely to rack up debt, while still living in relative comfort. The Formula: Item + regular expenditure < 20% of (monthly Income - CPF, savings, insurance) = Okay! 3: Your Weekly Budget This is a simplistic system, and requires more discipline than many people have. However, it is fast and easy to do. Using this system, deduct your CPF, monthly savings and
Either that or find yourself a low-maintenance girlfriend. The Formula: (Monthly Income - CPF, savings, insurance) / 4 = Strict weekly budget 4: The Credit Card Rule This one is easy. If you are using a credit card to pay for that fancy bit of wrist swag, can you make full repayment before the next billing cycle? If the answer is no, then guess what? You cannot afford it. We’ll say it again: You cannot afford it. Just no. Keep the credit card, walk away and check your smart phone for the time like regular people do. Do not get into the habit of accumulating credit card debt. The interest rate is a sky high 24 per cent per annum, and late payments or defaults will destroy your credit rating. The Formula: Item cost > credit card debt repayable before billing cycle = NOT okay! Following any one of these formulas is the first step to inculcate good

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