Making use of your financial toolbox to your advantage


Managing your finance can be challenging especially when you have so many options around. The ideal situation is to be free from debts and to be as minimal as possible when it comes to installments but that would be easier said than done in today’s world.

Not as bleak as it sounds

While we cannot escape the financial commitments required of us, there are ways that we can fully utilize the financial services to our advantage. Basically, the rule of thumb is to:

  • Use your credit card for emergency
  • Use a portion of your salary for expenses
  • Insurance and investments are for wealth building and protection.
  • That said, what else can we get out of them?

Only the necessities

In most cases, you will only think about financial products and services at the point of needing them like credit cards or home loans. Unless you are buying a home, there is no need to apply for a loan. so, how does this really work? Recently, the term financial toolbox surfaced which refers to the platforms that you need to efficiently manage your money. This is something you should have and knowing their capabilities will give you more mileage with your money.

Like a typical toolbox, this is where you keep all your tools (for financial management). Generally, you should have:

  • A savings account
  • Credit/debit card
  • Loans
  • Investments
  • Insurance

So with all that, you would have enough to keep you going. Now you need to figure out how to use them the right way.

Integrating your tools

The market is filled with all types of financial products and services. Every bank out there will offer you all types of cards and accounts but you need to find one that suits you the most. So, in looking at the financial toolbox, take note of the following:

  • Savings accounts – This is the easiest account to maintain but you need to work around it to ensure your funds are channeled correctly. The 50/30/20 plan would be ideal but if your funds are not properly managed, it can be messy. You should have 3 different accounts so you know which one is for your commitments, your wants and solely for keeps. The account you used for your expenses should have online banking services while the one used for savings should not have (so that you keep your money there without needing to touch them).
  • Insurance – There is no debate that you need insurance. Check your policy to ensure you have enough coverage and it is not only about protection against bodily injuries or death. Find a package that gives you protection for your family as well.
  • Credit/debit cards – Such cards should be catered to how you live your life. A lot of credit cards these days give you cashback and rewards. Hence, find out which one gives you that flexibility while not over-charging you in interest.
  • Loans – This is one package that should be minimized unless it is absolutely necessary.
  • Investments – They come in the short, middle and long term and it depends on how you want to grow your money. Be sure to check in with a legitimate investment advisor on which markets should you go into as well as the amount.

Putting them all together, having a financial toolbox is not only essential but necessary today. Knowing what they can do one thing, knowing what they can do for you is crucial so that you put your money in the right places.

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Six Capital Pte Ltd. Singapore

The financial world since 2008 and the Global Financial Crisis has changed forever. In the currency markets, the banks’ role as ‘market makers’ has diminished

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