Inflation is the theme of 2022. While we are coming to the end of the year, the issue of inflation has yet to go away.
Inflation is not just a financial concept, we feel it keenly in our pockets too.
I usually don’t remember prices but somehow I recalled the price of the Nestle Milkmaid condensed milk, which was $1.70. Just the other day at the supermarket, the price tag stunned me – it was $2.45 after discount… otherwise it was $2.75.
This means that the price of a can of condensed milk has shot up 62%!
No wonder my Teh Siew Dai has been increasing in price too.
It is now ever more important to stretch our dollars to preserve our purchasing power as much as possible.
Reduce expenses through cash rebates
I am an advocate for credit cards. Not the part about buying things on credit because you cannot afford them. My mum has always reminded me of the ills of credit when I was young.
But credit cards are a great tool if you make use of the discounts and rebates they offer, and that you repay in full timely and diligently.
POSB Everyday card is one of my favourites.
I use it to get up to 20.1% + 2% fuel savings at SPC stations. It is one of the most generous cards for petrol discounts.
Even if you don’t drive, you get 5% cash rebates (cap at S$5 each month) on public transport with no minimum spend. You can just simply tap your POSB Everyday Card at MRT gantries or buses for SimplyGo to benefit from this.
You should also use the POSB Everyday Card to pay for your utilities. You get 5% cash rebates on your bills for SP Group, Union Power, Tuas Power and Geneco; or 4% cash rebates for Keppel Electric, Senoko Energy, and Sembcorp Power. There is no minimum spend for this category so you save right from the first dollar onwards. The only limitation is the cap at S$5 per month.
Grocery shopping? How about 7% cash rebates (capped at S$30 per month) at Sheng Siong supermarkets? Enjoy savings on your groceries simply with no minimum spend!
Shopping for health and beauty essentials at Watsons stores also get you 3% cash rebates in-store and online with no minimum spend.
If you consolidate your spend on this card that would allow you to be able to meet $800 or more spend in a month, and you will to enjoy even more rebates such as
- 10% cash rebates on online food delivery at foodpanda, Deliveroo and WhyQ
- 8% cash rebates at POPULAR and POPULAR Online Store
- 5% cash rebates on online shopping at Amazon.sg, Lazada, Qoo10, Shopee, RedMart, iHerb, and Taobao
- 3% cash rebates on your phone bills at StarHub, Singtel, Singtel GOMO, StarHub giga, M1, MyRepublic, Circles.Life
Credit cards can be a great way to save money on your everyday expenses, especially when you use a card like the POSB Everyday Card that offers generous discounts and cash rebates. Make sure you repay your credit card bills in full and on time so you can enjoy these benefits without accruing interest charges. Don’t have a POSB Everyday Card? You can get S$150 cashback when you apply here now.
Reduce expenses through deals
POSB has launched over 24,000 deals under the Lobang Kit.
There are deals covering your essentials from dining, grocery and transport to health & wellness, shopping, telco, utilities, travel and more.
Ordering McDonald’s? You can get S$3 off your McDelivery orders with minimum spend of S$25.
There are plenty of 1-for-1 deals too. For example, you can get 1-for-1 Buffets at Cafe Mosaic or Atrium Restaurant, milk tea drinks at Bober Tea, desserts at Burnt Cones or Denzy Gelato, and more!
Inflation doesn’t mean one should live like a pauper. You can make use of deals and dine well for a fraction of the cost!
You can check out the list of deals here.
Make your savings work harder
Besides reducing your expenses, you can also earn bonus interest on your savings.
POSB Multiplier is a savings account with higher interest rates – take up more POSB products such as credit cards, home loans, investments and insurance – you can potentially earn up to 4.1% p.a..
Although the interest rate may not seem as high as other banks’ hurdle accounts, the requirements are easier to fulfil with no minimum amount. I know of students who could not credit salary but could still enjoy higher interest on their Multiplier account by syncing up with SGFinDex.
Personally I am sticking with POSB and DBS accounts because other banks have a lot more requirements such as minimum spend and savings to qualify for the higher interest. It is a chore to fulfil these requirements. I prefer POSB and DBS where the requirements are less onerous and more inclusive as a result. I rather spend the time and effort to find better investments to earn higher returns.
If you are already crediting your salary, another hack to boost the interest on your savings is to save regularly with POSB Save As You Earn (SAYE) account.
The SAYE account is a separate account that allows you to save money and you get to enjoy additional 3.5% interest on your monthly savings for the first 2 years! You can start saving from as low as S$50 per month to a maximum of S$3,000.
Below are some scenarios for your reference:
Invest to grow your wealth faster than inflation
We cannot just play defence with money, we need to play offense too if we want to beat inflation.
Over the last 60 years, the S&P 500 has returned an average of 9.96% a year, while inflation has averaged about 3.97% a year.
This means that not only did investors in stocks earn a higher return than those who kept their money in cash, they also beat inflation by 5.99% a year.
You might be thinking this year is different – the US inflation is 7.7% while S&P 500 is down 15% in 2022 – stocks are not beating inflation this year.
But this is just one year. Stock market has booms and busts and it is normal for stocks to underperform during a market crash. But crashes don’t last forever and stocks have fantastic long-term returns and will recover at one point in time.
Basically, you should take a long-term approach to investing and holding stocks for more years increase your chances of beating inflation.
Just like stocks, bonds have also historically proven to beat inflation. However, the outperformance is not as much as stocks.
POSB has made it easy and convenient for anyone to invest with its digiPortfolio offerings. There are currently four options available
- Global Portfolio
- Asia Portfolio
- Income Portfolio
- SaveUp Portfolio
These portfolios differ in their allocations to stocks and bonds, as well as geography (Asia or Global). Depending on whether you are looking for long-term growth, income generation or simply saving up for the future, each portfolio caters to a different investment need.
You can refer to this post for a more detailed write-up about the various options.
To help your money work harder during this inflation period, POSB is waiving the management fees on the first S$5,000 invested in these digiPortfolios till 31 March 2023.
Reduce your mortgage expenses with cash bonus
Mortgage rates have been rising and this is one of the significant expenses you want to minimize as much as possible.
It is always good to hunt around for lower rates and refinance. POSB is offering cash bonus if you decide to switch your home loan to POSB’s.
Under the POSB HomeSaver promotion, there’s a S$500 cash bonus when you have a Save As You Earn (SAYE) account and take up a POSB home loan, and another S$200 cash bonus if you get the mortgage insurance plan with POSB.
The mortgage insurance plan helps you pay off your mortgage in the event of your death or terminal illness. It is a form of term life insurance, which means that it provides coverage for a specific period of time (in this case, the length of your mortgage).
Feels good when your Neighbour has got your back
My very first bank account is with POSB and I am still using it today. That’s almost three decades! It is heartening to see that POSB has kept up with times and fulfilled the promise of being a neighbourhood bank – it now wants to fight inflation with us in an inclusive way.
There are definitely more initiatives from POSB and it is not possible to explain everything in detail here. It pays to figure out how to stretch your dollars and make your money work harder during such times. Find out how POSB can help you.
This article is sponsored by POSB but the opinions belong to the author.
T&Cs apply. SGD deposits are insured up to S$75,000 by SDIC. This advertisement has not been reviewed by the Monetary Authority of Singapore.
For POSB Everyday Card, T&Cs apply. Please refer to here for full details on the card benefits.