10 Steps to Increasing Your Net Worth

1. Increase retirement savings (and defer/reduce income tax payouts)
Depending on your income level, this can be a huge bonus. By reducing your taxable income for the year, not only are you taxed for a lesser amount, it's also possible that you drop a tier into a lower tax rate tier. There are two ways to do this in Singapore:
i) extra CPF contributions
ii) opening an SRS account

For both options, you are only taxed on the contributions when making withdrawals. You will also only be taxed for 50% of the amount withdrawn according to the tax rate at the time of withdrawal.

2. Reduce alcohol consumption
Alcoholic drinks are basically empty calories. You get almost no nutritional value from them, and whatever little you get can be obtained from other cheaper sources of nutrition. Yes, I've read the reports on how moderate amounts of red wine improves cardiovascular health, but seriously, 30mins of running (which is free, by the way) will do the same. Besides avoiding waste, you know those photos your friends post on Facebook? The unflattering ones with you looking half-drunk and red-faced? You'll be avoiding those too.

3. Pay yourself first
Put money away into an account separate from the one you usually use for all your transactions. Set it up so that a fixed amount is automatically transferred from your salary account into this account and make it difficult to withdraw money from this account by refusing an ATM card for it. This way you save on the yearly ATM card fee and since the money is slightly more difficult to access you'll be more likely to keep it in the account rather than to spend it.

4. Stop adding to your debt
Always pay your credit card bills in full.With credit card debt interest rates at 24% p.a., the last thing you want to do is to keep adding to it. Letting you pay a minimum amount every month is the bank's way of luring you into debt so that they can make more. Always remember, the bank is not your friend. They are in it to make money, yours if possible. Don't let them.

5. Use the 3 month rule for big ticket items
The urge to buy an expensive new toy strikes me often. A new cellphone, bag, etc. Whenever I start thinking of buying a new shiny gizmo or accessory, I tell myself to wait 3 months. Usually, after a couple of weeks the urge wanes. The longer I wait the less desirable the item seems.

6. Don't spend to impress others
A lot of people spend money because of peer pressure. Don't succumb to it and you'll find your purse a lot fatter. Most expenses stemming from needing others' approval are usually unnecessary. If your friends need you to spend like they do, they're not very good friends afterall.

7. Take advantage of your local library
Let's face it. Most of the books we read, we only read once. After that, it sits gathering dust on the bookshelf. If you're like me and read a few books a month, buying (especially if new) can really put a dent in your finances. So why bother buying and keeping when you can get the same value by visiting your local library once in a while? Save trees, save money, borrow books.

8. Re-evaluate your need for all those subscriptions
I love magazines. I used to subscribe to a couple of magazines and derived as much pleasure from collecting every single issue as I did from reading them. However, thanks to being really busy at work, I found that I only read a portion of the magazines that were delivered to me. So I stopped subscribing to them. At the same time I became more reliant on the internet for articles and information and found that I wasn't missing out by ending my subscriptions. I still buy the occasional copy off the newsstand, but only if that particular issue covers a subject I'm particularly interested in.

9. Take advantage of retailers who appreciate brand loyalty
Many retailers have frequent shopper programmes that require a small joining fee. If you frequently purchase from a particular brand, it often helps to participate in these programmes for extra savings. Some programmes even offer discounts from multiple retailers, which would mean even more savings, but only if you already purchase regularly from them. If you don't, purposely cultivating the habit will only mean extra spending and not savings. So, do this only with brands or shops your patronise on a regular basis.

10. Fill up those jam jars
I have a set amount of cash that I withdraw from the ATM every month. This cash covers most daily expenses for the whole month and I've found that this is a very easy way to limit spending. I also have old jam jars that I place next to my main door. Every other day or so, I empty all the coins I have into these jars. This way, I save an extra residual amount every month. This may not seem like much, but after a while it really adds up.

Naturally, you'll want to wash and dry those jam jars first. :)


These steps may seem pretty straightforward and simple, but if you're not used to it can be a lot of adjusting to make them habitual. Steps #1, #3 and #4 especially can be difficult if you're not used to carving out portions of your pay packet to put away on a regular basis or have the habit of paying the minimum on your credit card bills. Just keep reminding yourself that you net worth is increasing and every dollar brings you closer to your financial goals.