How to have your sushi and eat it without guilt.
When it comes to spending and saving, there are two extreme groups of people.
The first, also known as the "miserable misers", will scrimp and save every single cent. Embracing the mantra of "saving for a rainy day", they nickel and dime their expenses. Naturally, the few material possessions in their home normally hail from the bargain bin!
The second, also known as the "super splashers", prostrates themselves at the feet of hedonism. Personifying the adage of "eat, drink and be merry, for tomorrow may never come", it is common for them to go beyond their credit lines, visit the bank for an overdraft, and live from loan to loan.
Personally, I would advocate becoming an "intelligent indulger". Life is short, work is stressful and one shouldn't be too hard on oneself. At the same time, squandering one's retirement savings prematurely is an act of utter folly.
Here is where credit cards come into play. By using them in the right manner, one could possibly have one's cake/sushi and eat it.
But wait a minute, I hear you say. Aren't credit cards the doyen of debt? Wouldn't they promote wanton and reckless spending?
On the contrary, no. In fact, an over-extended cardholder who runs into serious debts is a bad credit card client.
As some of you may know, I have recently applied for a Citibank Platinum SMRT credit card. This is my second credit card in 13 years. Together with my wife, we have two Citibank credit cards in the family.
By leveraging on its wide range of rebates, special deals and regular promotions, my family and I are able to enjoy a good quality of life, saving quite a bundle each month without living like paupers. Admittedly, most of the spending gets charged to my wife's Citibank credit card rather than my own as she is our CFO!
The idea of intelligent indulgence requires you to balance your life priorities while monitoring your monthly expenses closely. It looks at keeping track of your personal cash flow patterns and ensure that all bills, via credit cards or otherwise, are paid on time.
It also mandates you to time big ticket items - like holidays, cars, apartments, home entertainment systems and so on - with specific milestones in finances. This is possible when one has sight of one's financial portfolio through developing personal financial statements.
For us, we have a specific "extravagance" cap each month and an annual budget set aside for holidays, gifts and other luxuries. While we do occasionally "bust our budget" so to speak, we always make it a point to pay all our bills on time.
Being an intelligent indulger also means selecting a credit card that best matches your lifestyle. Mix and match your history of spending with the card that can offer you the best value.
On the issue of managing credit, there are in fact five golden rules (courtesy of Citibank's Making the Most of Credit which you can download for FREE) that one should be mindful of:
1) Only incur the debt if it is absolutely necessary.
2) Repayment is a must - and it carries a price.
3) Borrow only the amount needed.
4) Plan your finances to ensure that you can repay the debt.
5) Build a standby emergency fund.
You can learn more about being more financially savvy by checking out Citibank's wonderful Managing Your Wealth series. There are six titles in all, and you can access all of them FREE online or purchase them at many bookshops.
Managing Your Wealth - An Investor Education Series from Citi Asia Pacific
With the right safeguards and fiscal wisdom in place, one need not fear the personal credit crunch any longer!
If you wish to enjoy a $20 TANGS shopping voucher ($40 if you apply for both Citibank Credit Card and Ready Credit), you can apply for a Citibank Credit Card online via this special link (only for Cooler Insight readers).
Double your chances in the "Win with Citi" promotion, which gives you cool prizes like a Round the World Trip for 2 (plus $10,000 spending money) and more.
(Comparatively, offline signups will not get any vouchers while other online signups will only enjoy a $20 Marina Bay Sands voucher.)
Oh yes, just in case you're wondering, first year membership fees are waived. In fact, if you are applying for the SMRT credit card, fees are waived for two years!
This post is brought to you by Citibank Credit Cards.
Labels: citibank credit cards, financial management, managing credit, personal finances