A recent study shows that 1 in 5, or 20% of people are expecting to go into debt because of external financial pressures such as high inflation and rise in cost of living. Half, or 50% believe they will have to dig into their savings to ‘keep the lights on’.

Volatile global markets over the last few years have had a huge impact on cost of living and many salaries cannot keep up with inflation. With inflation at an all-time high, the spending power of salaries are shrinking.

We can blame the economy for our financial distress, but we are equally to blame with our self-sabotaging bad habit of spending our entire salary every month. Ultimately the shortfall comes from debt, like loans and credit cards, or our savings.

How do we avoid becoming a statistic?

•    Our hard-earned savings are there for emergencies and unforeseen situations. If you run short of cash during the month help yourself out of trouble, but don’t let it become a monthly habit. Running low on cash because you have overspent is not an emergency.

•    Cut down on your monthly expenses - You will be surprised how much we spend a month on unnecessary impulse buys or luxuries we don’t really need. e.g. how many have gone to the store to buy bread, milk and eggs and come out with a trolley full of items bought on cravings and a hungry stomach? This is probably the biggest monthly expense we can cut down on. 

•    Your budget should not make up your entire salary. Don’t budget to the hilt. After savings and expenses, you should have disposable income left for the usual and unforeseen expenses that always occur e.g. entertainment, medicine if you get ill, last-minute birthday present you forgot about etc.

Don’t become a statistic. Before your budget becomes a disaster, chat to your advisor to help trim the fat off your expenses so you won’t have to use your savings or take out debt. [email protected]
*https://www.independent.co.uk/

Please note, the above is for education purposes only and does not constitute advice. You should always contact your Acuma HK adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.