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Concerned about inflation? Experts help ease your biggest money concerns
Her daughter may only be seven years old this year, but Ms Jacquelyn Tan already knows what she hopes her child will grow up to be: One who is free to live life on her own terms, and explore her interests.
How is she helping to achieve that ideal for her daughter? By planning for her own retirement.
“Because she's our only child, it’s important for my husband and I to ensure she has financial freedom, and we won't be a burden on her as we grow older,” says Ms Tan, who is in her 40s. “So with that, we plan quite a bit, whether it is having endowment plans or making sure that our retirement is taken care of.”
Ms Tan, who is UOB’s Head of Group Personal Financial Services, is among a panel of experts from the bank who aim to help ease your money-related concerns in a new advice column.
Why is inflation happening in Singapore? 
Besides her financial expertise, her own experiences as part of the “sandwich generation” (those who care for their ageing parents and young children) will be useful and relatable. Ms Tan and her husband are supporting their parents, paying off their home loan, and feeling the pinch from inflation.
Why are interest rates rising?
“In a rising interest rate and high inflation environment, daily necessity, utilities, food and mortgage payments all put a strain on monthly finances,” says Ms Tan, who lives in a semi-detached house.
Helping others find financial stability
Having made prudent financial decisions in her youth – such as investing early, using dollar-cost averaging (investing a fixed amount regularly) and diversifying her portfolio – the personal finance head is keen to pass these lessons on to others.
“Especially for the younger generation, financial awareness and literacy matters a lot,” she says. “My parents inculcated practices like buying insurance policies early, so when I first started my career, I started with protection insurance plans. Then I invested mainly in stocks and real estate.”
Ms Tan holds a Master of Science in Finance from Imperial College London, so it was an easy decision for her to join the banking industry after graduating. She has always been “comfortable with numbers”.
But why has she stayed in the banking sector for over two decades? What about her job keeps her inspired and energised? “I’m passionate about creating financial solutions that suit people’s lifestyles – especially millennials and women, whose needs are a bit different.”
Her advice to readers amid the current economic climate is to look long and hard at what could cause them financial instability.
“Nobody wants to be caught unprepared when unforeseen circumstances happen. Think about what you are afraid of – that's what you should go and address, because that’s what money management is.”
- MS JACQUELYN TAN | Head of Group Personal Financial Services, UOB
Q. How will the current economy affect me?
A: Higher interest rates mean loans will be more expensive. Rising inflation will eat into your savings and reduce what you can buy. We’ll probably see inflation rates easing towards the end of the year, but they won’t be near-zero.
Q. What can I do to protect my wealth right now?
A: When your purchasing power decreases and interest on loans rises, it's so easy to just stop investing. But if you do that, you’ll see that you can’t keep up with inflation or meet your financial goals.
Consider investments that increase your portfolio resilience and provide diversified income streams like quality bonds, dividend equities and assets like property. Capitalise on long-term structural growth areas like healthcare and sustainability.
The last thing that you should do is to not do anything. We can’t ignore the risk of a global recession, and we can't control what the central banks do, but we can control how we manage our finances
Q. How can I cope with the higher interest on home loans?
A: For aspiring home buyers, it's important not to overstretch yourself, because 20 to 30 years is a long commitment. Seriously assess the affordability of the property. Our UOB Home Solution platform can help home buyers calculate the home loan amount they can afford, and get an instant valuation on a property they’re eyeing.
For existing homeowners like myself, it's important to have a financial buffer of at least six months of liquidity to combat higher interest rates. Consider refinancing the loan – there are solutions that offer fixed or floating rates, or a combination of both.
We also offer green loans, and a programme that helps customers switch to solar power for savings on their electricity bills. This is useful since utility prices have increased.
Q. What are some common financial mistakes Singaporeans make?
A: Some might fall prey to biases such as unrealistic optimism – where they think events will impact others, but not them. That overconfidence prevents proper planning for unforeseen circumstances like retrenchment or pay cuts. This could lead to being financially overstretched, such as taking on a larger mortgage than they can afford.
There’s also herd instinct (investing in something because many others are doing so). It’s dangerous, because the ‘wisdom of the crowd’ concept doesn’t necessarily work with investing. You need to assess your own goals, time horizon and risk appetite.
Lastly, there’s the urge to keep all of one’s money in savings. Rising inflation will erode savings, so once you have adequate insurance and three to six months’ worth of savings, you should start investing. It makes a lot of difference.
Q. What are some ideas about investing that people get wrong?
A: Thinking that investing is only for the rich, or that they need a sizable sum before they can start. You can start investing monthly for as little as what you would spend on a great meal or some subscriptions you no longer need.
Many also try to time the market. Because of that, they procrastinate. Others worry they don’t have the expertise, so they’d rather not start. And historically, women are not as well-invested.
Understanding the markets can be daunting, but there are digital solutions that offer portfolios managed by experts. UOB’s SimpleInvest is one, and it lets you start investing from as little as $100. People are starting to realise these platforms are both familiar – you can access them on your mobile phone – and affordable. When we launched SimpleInvest during the pandemic, over 85 per cent of users were new to investing.
You ask, they'll answer
Besides Ms Jacquelyn Tan, Head of Group Personal Financial Services, UOB, other experts from the bank will be drawing on their specific area of expertise to answer your most pressing questions. They include:
Mr Winston Lim
Mr Winston Lim is UOB's Head of Deposits and Wealth Management. He has been in the financial services industry for over two decades, and previously headed the personal financial services and private wealth management team in UOB China.
Mr Abel Lim
As the head of wealth management advisory and strategy at UOB, Mr Abel Lim oversees the bank's wealth advisory content for its clients. He was previously head of investment sales and advisory for UOB, and has worked in the company for 14 years.
Mr Lim Beng Hua
Mr Lim Beng Hua is UOB's head of secured loans – loans that are backed by collateral, including mortgages and car loans. He has over 10 years of experience at UOB, and previously led the bank's core banking business.
