Check how far you are from this year’s savings target, so you know how much more you need, or how much investment income you must put aside, to meet your savings goal.
     For example, if your target for end-2014 is to save $30,000, and you are behind this year by $10,000, it means that you’ll need to set aside an additional $834 monthly next year, to make up for what you didn’t achieve this year.

When was the last time you made a thorough list of expenses – yes, even those morning kopi takeaways – to figure out where your money is going? It’s even more important to do this when you have a financial shortfall to meet.
     Be strict about what you spend on. Walk around your home, too, and look at all the electrical items driving up your bills. Do you really need a second computer, for example? You’ll be amazed by how much you can actually save. It could make all the difference to whether you get back on track financially.

Don’t invest and then forget all about it. Start by deciding on the time horizon for your investment goals, so you (or your financial planner) will be in a better position to identify suitable investment products for you.
     For example, an equity product – like stocks and mutual funds – that has bright long-term prospects but minimal dividend payout is probably not suitable if you’re looking to book gains over the next three to six months. In this case, a bond fund that gives out higher interest payments regularly over the next six months is a better choice, since you’re likely to need some cash flow from your investment over that time.

Leaving your money in the bank when you don’t need the liquidity is generally a bad idea. Not only do you earn very little interest, you’re also losing your buying power because inflation is eroding the value of your cash holdings. So if you already have a pool of savings in the bank, you should make it work harder for you.
     Invest your spare cash for higher returns, such as in unit trusts, exchange-traded funds or savings plans offered by some insurance companies. Most of these funds are managed by professionals for a nominal fee, with the objective of delivering sustained returns for investors.

 This article was originally published in Simply Her December 2013.