Financial – 5 Money Rules Every Smart Woman Should Know. (part 2)

3. Build Your Safety Net.
Financial safety nets are vital, especially for a woman with kids or a single woman with elderly parents.
“A common perception among women is that we can get insurance later, when we can afford it,” says Jacqueline Chua, Business Development, Van Gogh Preferred Banking, ABN AMRO Bank. “But premiums get more expensive as we get older.” Insurance firms tend to think women over 40 are more prone to “women’s illnesses”, so premiums at many firms rise sharply around ths age.
There is no set rule on how much you should spend on insurance, which can over your life, mortgage or health, but most experts recommend coverage of at least eight to 10 times your annual income.
“You should spend about 10 per cent of your disposable income on insurance, but this will vary with your lifestyle and stage in life,” says Lim Meng Tat, Chief Marketing Officer, AXA Wealth Management. He points out that many women overlook the importance of medical and critical illness plans, which he rates as more crucial than protection for loss of income and lifestyle.
“As she advances in age, a woman must look at long – term care. So, she should consider a good disability plan. And for life protection, consider term protection instead of a life plan for affordable maximum coverage.”

Easy Does It.
> The sooner you take up cover, the better, as you pay lower premiums.
>Adapt your insurance needs throughout your life. Getting married, for example, requires a different plan from when you’re starting a family.
> Don’t just rely on your husband’s or your company plan. Consider your own life policy.

4. Credit Cards – Too Much Of A Good Thing?
Because of their convenience, credit cards are a popular form of payment these days. They are also a useful money management tool, allowing you to make purchases you will only have to pay for 25 days later.
But when deciding on a new card, are you more likely to look at its rewards points, privileges and freebies? Or are you also comparing fees and interest changes? “It is important to compare credit card terms and costs so you can select the card that will give you the features and terms which best meet your needs,” advises OCBC’s Anne.
So shop around for a credit card the same way you’d shop for goods.

Easy Does It.
> Compare the interest rates of credit cards. When you sign up for a new card, you get a low promotional interest rate. But this lasts only for a specified period. Find out what the normal rate is. How does this bank compare with others?
> Review all changes for each credit card. Besides interest, there may be annual fees, late payment fees, or fees to participate in a rewards programme.
> Compare the “grace period” given by the card company to pay your current bill without incurring interest – usually 20 to 25 days. Remember, grace periods only apply when you have fully settled your previous bill by the due date. If you rool over your balance, you will be charged interest on your outstanding balance plus new transactions.

5. Wills – Prepare For A Future Without You.
Though considered a suay (bad luck in Hokkien) subject to discuss, a will is one of the most important legal documents you’ll ever sign. It sets out your wishes on how your assets should be distributed after your death.
“A will should be drafted as soon as a person has assets. If you don’t have one, the Interstate and Succession Act will apply,” explains Vincent Chan, a partner at Chan & Goh law firm. Under this Act, assets can take years to sort out, leaving a family in hardship while much – needed funds are tied up. And if next – of – kin can’t be traced, the state gets the money.
Wills make things easier and prevent squabbles. Muslim women should also make a will, as discretionary gifts are allowed once religious obligations are met.

Easy Does It.
> Your will must be witnessed simultaneously by two non – beneficiaries aged above 21.
> You don’t need a lawyer to draft your will, but he can ensure it’s legally valid and clear.
> You have to make a CPF nomination in order to “will” your CPF fund.

Wish you never had to worry about money again.