Wednesday, May 24, 2017

How To Save Money If Your Flight Gets Delayed Or Rescheduled

Delayed flights don’t always happen, but they can cost you a lot when they do. Here’s how Singaporeans can save money if their flights get rescheduled.
Airlines are notorious for last minute changes. This can happen due to overbooking, weather conditions, or even changes in airport charges. Getting your flight delayed or rescheduled can be quite a headache. Besides affecting your travel plans, flight changes will also impact your wallet, especially if it gets pushed back by 12 or more hours. Here’s how to save money when it happens.


Demand to Get Compensated
Airlines generally have a “don’t ask, don’t give” policy. You have to take the initiative, and demand compensation from your airline. Never trust them to do it of their own accord. One advantage to pressuring the airline is that, even if you don’t get compensated in cash, you might get a freebie. This can be a discount on your next flight with them (assuming you want to use them again), or complimentary items from their catalogue. Do note that your airline’s actual legal obligations may be different. For example, some of them clearly specify that you accept the risk of flight changes, and that they’re not obliged to offer any compensation (check the terms and conditions before you buy). However, some good airlines may offer compensation anyway, as a matter of maintaining good customer relations. If you don’t ask and push for it however, you tend to get nothing.
 
Check If Your Travel Insurance Covers Flight Delays
Many travellers, amid a haze of anger and exhaustion, tend to forget about their travel insurance – which can come free with the right credit card. Remember, travel insurance isn’t just about medical expenses and lost luggage. Some policies also cover delays. While most travel insurance policies do not cover schedule changes, some cover delays or cancellations in case of bad weather or if the delay is more than 24 hours. If you’re uncertain, call to ask. And if you haven’t gone on your trip yet, consider buying a policy that covers these circumstances. If you’re self-employed, being unable to go home and run your business for a day or two can cost a lot of money.
 
Call Your Airline Directly to Settle Things
Here’s a special tip from us: the automated instructions that airlines send out are often a waste of time. When your flight is rescheduled, always call the airline directly and raise your issues. You’ll sometimes be able to book an alternative flight on the call, faster than the other people standing in line. You may also get alternatives that are not immediately offered on automated instructions – for example, you may be given the opportunity to leave three days later, but with full compensation for a hotel room (if you’re on vacation and not in a rush to get home, this might be even better than an alternative flight tomorrow, with no accommodations for tonight).
 
Call Your Credit Card Concierge
Sometimes, the delay would just cost you too much. Perhaps you have a concert to attend, and you already paid for the tickets. Or perhaps you have a vital business meeting to get to. If your airline can’t move fast enough, your last resort can be your credit card concierge (if you have one). Call them and let them know your situation; they’re often able to get you last minute flights, which you can’t get on your own. As an aside, the same concierge can also be asked to help with accommodations. For example, get the concierge to look for the cheapest hotel that’s close to the airport; this will save you having to Google things on top your current problem.
 
Using Airbnb? See If Your Host Can Extend Your Stay
Some Airbnb hosts will be open to giving you an extension, if there are no other guests after you. This could be cheaper than looking for a last minute hotel, so always be sure to ask.
 
Ask Friends For Help
Obviously, the first choice should be friends who happen to live at your travel destination. See if anyone can put you up for a night or two if your flight gets rescheduled for the following day. However, don’t forget to call home and use your friends’ contacts. For all you know, your best friend back home has a former colleague who lives near you; or perhaps mum and dad know a distant cousin who’s in the area. It’s not a guarantee, but you may just have a shot at saving on a hotel room. As an aside, try to make friends abroad, wherever you go. It’s good for your social life, and very helpful in situations like these.
 
Check Flight Prices Before Accepting a Refund
If your flight is cancelled or significantly delayed, you may be entitled to a refund. When this happens, the airline will often give you a choice between an alternative flight or accepting the refund. When you are given this choice, always check the price of booking with another airline. You will sometimes save money by taking the refund and booking a new, cheaper flight, rather than taking the existing airline’s alternative.  


SingSaver.com.sgSingapore's #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

Wednesday, May 3, 2017

New To Mutual Funds? Here's A Guide To Choosing The Right One

If you’re thinking about investing in mutual funds in Singapore, follow these guidelines to help you choose the right one.
 
Choosing a mutual fund is challenging, because of one unique quality in this industry: most mutual funds will underperform. It’s always a challenge picking the ones that will stay ahead over the long term. For the total beginner, here are some of the key questions to ask:
 
What is the Goal of Your Investment?
There are thousands of mutual funds available on the market, and not all of them cater to the same goals. For example, a pure equities fund may hold only stocks as assets, thus making the fund useful as a long term, retirement-oriented asset. Another fund may hold a large number of properties or bonds, and be focused on generating immediate income (this is useful for people such as retirees). Before you even start to choose a fund, you should have a clear idea of what you’re investing for. Some examples include:
    Investing to send your children abroad to study in 5-10 years
    Investing to ensure you will be ready to purchase your first home by age 35
    Investing to ensure you will have an income of at least S$2,500 a month by the time you retire at age 65
    Investing to make enough money for a car or life ambition (e.g. climbing Mount Everest) within the next five years
Depending on your purpose, different funds will have varying degrees of suitability. If you are investing over a short term (say five years, to buy a house), you might find an equity fund too volatile; stock prices can change dramatically over a short period. If you are investing over the long term, say 30 years, then a fund that holds primarily fixed income assets may have returns that are too low. Note that almost all mutual funds are aimed at an investment horizon (the amount of time you will stay invested) of at least five years.
 
Are There Load Fees?
Funds sometimes require “loading”, which refers to the way you pay for the fund. Besides the regular fees (see below), a fund may require load fees. They are either front-loading (you need to make an upfront payment), or backloading (you need to pay a lump sum toward the end of the investment horizon). It is always preferable to pick a fund with no loading, or at least with very low loads. Here’s why: Say you invest in a fund, with an initial sum of S$20,000. There is three per cent front- loading (S$600). Due to the load, your initial investment is now (S$20,000 – S$600) = S$19,400. Now if you invest the full S$20,000, at returns of around three per cent per annum, you would have around S$23,185. But if you pay the loading and invest S$19,400 over the same time and rate of return, you would only end with up with around S$22,489. That’s a difference S$2,786; so be sure to avoid loading where possible. (Note: most mutual funds that are sold to lay investors should not require loading.)
 
Look for the Total Expense Ratio
The Total Expense Ratio (TER) includes the management fees, the distribution costs, and all the other charges needed to run the fund. This may have a different name, but if you ask for the TER the salesperson will have to point it out to you. The lower the the TER, the higher your returns. For example, if the fund provides a total return of five per cent, but the TER is three per cent, you are only really getting a return of the remaining two per cent. You should always look at the fund’s performance with relation to its TER. Between a fund that provides returns of 5% and has a TER of 3% and a fund that has returns of 3.5% but a TER of just 1%, the latter is actually better.
 
Measure the Performance with Regards to the Benchmark Index
Mutual funds have a benchmark index, against which they measure their performance. For example, a mutual fund may use the Straits Times Index (ST Index) as its benchmark. If this is the case, the returns should be close to the ST Index. If the ST Index has returns of 2.7%, the fund should deliver returns of around 2.5% or 2.9%. A fund is said to have beaten the market if its returns are above the benchmark index. If the fund has returns below the benchmark index, it is said to have underperformed. Note that this is also true for negatives. If the benchmark index has returns of negative 4%, and the fund delivers returns of negative 3.8%, it has still beaten the market (it lost less than the market). Note that, as a norm, most mutual funds do not consistently beat their benchmark index.
 
Look at the 10-15 Year Performance
When comparing mutual funds, ignore histories of just one or two years. It is impossible to gauge the quality of a fund (or fund manager) based on such a short time frame. It’s akin to judging the academic results of a student by looking at just one or two of the exams they’ve taken. Look at results over 10 or 15 years, and have the salesperson explain them to you. If the fund has not been around for that long, you might want to step back and look for something else. Note that there is a common saying that past performance is not an indication of future success. However, it is also a common saying that you should not invest in something with no proven track record. As with many things in finance, both guidelines are contradictory. We will move on the side of caution and suggest you do look at past performance.
 
Check the Rules for Cashing Out
Not all mutual funds allow you to quickly cash out, should you need your money back. Some funds impose steep fees on pulling out before a certain length of time (e.g. five years), and some funds vary the number of units you can sell on a first come, first serve basis. For example, the first 100 people who want to sell can sell all their units, the second batch of 100 people can sell only half their units, and so on. Funds impose these rules because, when times are bad, there may be a rush of people who want to sell and “escape” a bad investment. This could sink the fund before it has a chance to recover. You should be clear on these rules before you buy. In particular, do not commit to a fund that will lock down your money for long periods, if there is a chance you may need the cash if you have no emergency savings.
 
 
SingSaver.com.sgSingapore's #1 personal finance comparison platform by transaction volume, provides consumers with timely money insights and aggregates the latest credit card offers and up-to-date personal loan deals.

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