After Chinese New Year, you’ll probably come home with an extra S$400 – S$600 in ang bao money. This is typical for most Singaporeans, with a lucky few crossing the S$1,200 mark.
Assuming you have an inhuman degree of self-control, you can actually use your ang bao money for benefits beyond a new Lego kit or a fancy dinner. The key is to immediately put it where you can’t get at it, and find ways to make it grow.
If you’re getting less than S$400, then we suggest you simply save it. Otherwise, here are some wise things you can do with your ang bao.
Start a Small Investment Portfolio
You can purchase safe blue chip stocks, such as the Straits Times Index fund, for as little as S$100 per month.
Banks such as POSB and OCBC have a blue chip investment programme, which don’t require you to buy in fixed lots (you usually have to buy shares in “lots” of 100 or 1,000). Because blue chip companies are highly capitalised, they are among the safest stock market investments – think companies like SMRT, SembCorp, and Singtel.
The returns for these stocks vary, but the banker will be able to explain them to you. If you are uncertain, simply purchase the Straits Times Index Fund, which automatically diversifies your money across various blue chip companies.
Insure Something Vital
If you have never bought insurance for your phone or laptop, now is a good time to consider it. For around S$200, there are banks and insurers that will cover your important devices, such as Citibank Lifestyle Guard.
This is especially useful if you are going to buy a new device this year. The sum assured for the devices are quite high, often up to S$5,000 – if anything goes wrong, you can skip having to find a repairman and just get a new one.
However, don’t bother insuring anything with a lifetime warranty. In many cases, you will not be able to exercise the warranty and also make the insurance claim.
Pay Off Your Credit Card Debts
If you have outstanding credit card debt, your first priority should be to pay it off. The compounding interest rate of a credit card means even small debts can quickly snowball, and they should only be used as form of payment; never as a form of credit.
There are likely to be plenty of balance transfer options in the first quarter of the year. This is when you can transfer your debt onto another credit card at 0% interest for a time. You can find a good balance transfer option on SingSaver.com.sg.
Let your ang bao money be the first repayment, and remember not to spend more on credit cards until the debt is paid off.
Lend it to the Government
You can buy Singapore Savings Bonds (SSBs) for as little as S$500. This is a much better option than leaving the money in a fixed deposit, as the interest rate will be the equivalent of 2.5% per annum if you leave it for 10 years.
You don’t need to leave the money that long, however. You can cash out your SSBs monies any month, although you may receive less interest.
Go to Batam for a Mega Grocery Trip
Groceries at Batam can cost as little as a third of the price in Singapore. The trick is to stock up for two or three months at a time, while using only a single trip.
Even assuming the ferry ride costs S$100 both ways (check the prices before going), you can still save hundreds of dollars on groceries. Just make sure you are buying what you need, and not simply buying because it’s cheap.
This is a combination holiday and money saving grocery trip rolled into one.
Spend it on Self-Improvement
S$400 to S$600 is enough for a variety of certification courses. Coupled with the government’s SkillsFuture programme (you should have already received your S$500 credit by now), you can develop some critical core skills.
Those working in offices will do well to look at Business English and accounting. Those in other lines of work should ask their supervisors or managers for a recommendation – pick something that will advance your career.
The original version of this story was published in Singsaver on January 31, 2017.
For more money tips and tricks, check out www.herworldplus.com/lifestyle/money.