You know the dream we all have (or had at some point in life) of free money raining down from the skies?
The recent $600 Solidarity Cash Payout that was credited to our banks seems like a dream come true.
To be fair, this is part of the Government’s assistance package to help Singaporeans who are affected by the COVID-19 pandemic.
As long as you’re aged 21 and above in 2020, you will receive the $600 cash payout.
(Heng I just made the age cutoff this year!)
So even though it’s ‘free money’, we should remember that it’s a one-time-only thing, and we should spend it wisely.
How We Can Use This $600 Solidarity Cash Payout Wisely
While I already have some ideas of my own with regard to how I would spend the Solidarity Cash Payout.
I decided to reach out to the Seedly Community to see if I can get additional insights.
So here it is, a compilation of 6 different ways we can use the Solidarity Cash Payout wisely.
1. Clear Your Debts
The Circuit Breaker measures enforced during the COVID-19 pandemic has pretty much caused Singapore’s economy to come to a standstill.
As much as we hate to admit it, a recession might just be around the corner…
So the first thing we need to do is to take care of our finances.
And the most important thing to do is to clear any outstanding debts before it snowballs and becomes an even larger problem.
For example, if you’re just paying the minimum on your credit card bills or have outstanding credit card debt.
Use this opportunity to either clear or reduce your credit card debt AND have a good look at how you’re spending your money!
By clearing your debt, you’ll feel better emotionally, can start building your savings for your retirement, and even improve your credit score.
2. Build Up Your Savings
After settling our debts, we want to build up our savings in order to prepare for the worst.
This will create a cushion for us during periods of economic uncertainty.
Especially during this COVID-19 outbreak where big companies like Singtel are freezing wages to cut costs.
And even a fast-food giant like McDonald’s has suspended all restaurant operations, affecting the jobs of more than 10,000 Singaporeans.
This is why it’s important to have emergency funds set aside — a general rule of thumb is at least 6 months’ worth of living expenses.
P.S. If you’ve unfortunately lost your job, you can use the COVID-19 Money Framework to help you get on track.
3. Make a Donation
If you already have your emergency funds secured and are in a better financial position than most.
You might want to consider taking this Solidarity Cash Payout and paying it forward by donating it to those who need it more.
If you’d like to help out, you can refer to this list of charitable campaigns and organisations.
Note: depending on which charities you donate to, you can also reduce your taxes so it’s a WIN-WIN situation
Alternatively, you can participate in our Seedly Community Giving Campaign (till 1 May 2020) by being active in our Seedly Community.
If you make it to the Top 10 on the leaderboard, The Seedly team will donate a total of $5,500 on your behalf to any social cause of YOUR choice!
4. Start Investing
If you’d like to take your first steps towards financial independence or freedom.
Perhaps this $600 could be the start of your investing journey!
While most of us are hesitant to make the first move, the best time is always to start NOW.
We just need to understand that investing is a long-term game and be honest with regard to what our risk tolerance is like.
And while there are plenty of ‘discounts’ to be had in the global stock market during this period.
There are plenty of lessons to learn from which can help us become better investors too.
Don’t know how or where to start?
Use this Step-by-Step Guide to Investing!
5. Learn Something New
The Solidarity Cash Payout could also be ‘school fees’ to help us learn something new.
Many educational institutes and organisations have opened up online classes (some of which are free!) for those who wish to upgrade themselves!
And since we’re at home anyways…
We might as well do something beneficial with our time.
P.S. while most of us might not have the opportunity to attend Harvard University in person, we could take and complete the free online courses… and brag that we technically studied at Harvard 😉
6. Bubble Tea
I mean, there is no such thing as TOO much bubble tea in our lives, right?
Assuming that each cup of bubble tea costs $3.40 on average, the Solidarity Payout can pay for 176 cups of bubble tea!
(Woah… Bubble Tea heaven.)
However, with the extension of the Circuit Breaker Period, bubble tea shops are no longer considered an essential service.
And while we could put the money aside and spend it all on bubble tea when this Circuit Breaker period is over.
This is also the perfect opportunity to think long-term.
The $600 could be seed money which you can save and invest to potentially become your downpayment for your very own bubble tea franchise.
Think about it.
That’s a business you own AND free bubble tea whenever you want…
Thoughts on the $600 Solidarity Budget
Can’t decide what’s best?
We could also divide the Solidarity Cash Payout and use it for all of the above!
While it’s great that we’ve gotten some free money from the Government.
It’s important for us to use this $600 cash payout wisely and not spend it unnecessarily.
For those who have yet to submit your bank details to receive your payout, remember to do so by 23 April 2020 in order to receive it by 28 April 2020!