Your Complete Guide To Winning Your Personal Finance In 2019 (Guide & Podcasts Included)
Congratulations, You made it to the starting line!
It may seem a daunting task to start managing your own money. This article was written in plain simple English for non-financially trained Singaporeans to answer that first question at the back of your mind:
” How should I start my financial journey on the right track… This weekend? “
It’s now the Last Quarter of 2019
If you took a quick glance at the Calendar, you’d probably realise that it is already October 2019.
It usually marks the start of frantic panicking and fear, going through your new year’s resolutions to understand where you are in life.
Fret not! If you are reading this, it’s a good sign. Hopefully this money framework guides you along the way~!
It was distilled after many hours spent pouring through complicated money concepts and moderating our Community QnA online. We aim to share only what is essential, answering questions that beginners often have.
At the end of the article, you should feel that it is indeed possible to start now with several key actionable items (at least 5) at your side. If you are keen to jump the line and learn from the community by asking questions, you can join our Seedly QnA and ask your questions here.
We guarantee you that you will only need ONE WEEKEND to sort out your money by following this simple Seedly Money Framework concept.
So bookmark this or store this link somewhere for easy reference. Ready? Let’s go!
The Seedly Money Framework
It is a simple checklist:
- It has a total of 15 potential ‘To-do’s for you to think about and you can choose to accomplish.
- It is structured with a Level 1, 2 and 3 in each of the categories from Income to Spending to Investing
TL;DR: How to use this Seedly Money Framework
- Block out 5 hours on either Saturday or Sunday
- Download the image checklist above as a PDF and print it out to paste it somewhere you can see
- Read the contents of each section, understand where you stand and roughly what each ‘To-do’ entails
- Next, circle AT LEAST 5 (five) ‘To-do’s which you aim to accomplish in 2019
- The in-depth instructions on each different ‘To-do’ is listed below in the next section
- Scroll down to read a clearer actionable instructions on how to do each step accordingly
Yes it is really that simple! If you could go from ZERO to HERO for your personal finances in one piece of paper, this would probably be it!
We’ve added also various snippets from podcasts which we did on the MONEY FM 89.3 show with Michelle Martin as tidbits for you to pick up along the way also.
“Your Personal finance life on ONE piece of paper”
This segment basically focuses on the key ingredient in your financial planning, your income sources and cashflow.
INCOME Level 1: Understand my monthly cashflow movement
- Why: It is very crucial to understand your INs and OUTs of your monthly cashflow as a foundation
- How: Refer to your latest 3 months worth of bank & credit card transactions and determine how much goes IN or OUT of your banks
- What: We would recommend using a simple excel sheet or a hack would be the Seedly App (on iOS and Android) to simply work out your numbers
- Start here: Working Adults: How To Allocate Your Monthly Salary?
On this note, there is also the topic of CPF to understand what it does for you and how you can maximise it via tips and hacks from our community.
We spoke about it on MONEYFM with our top contributor and CPF Expert as well. You can listen to it here:
INCOME Level 2: Automate my monthly cashflow (pay myself first)
- Why: By segmenting your main 3 accounts. You will only be forced to spend only from ONE account (Expenses)
- How: Simply set up a simple Standing Instruction (SI) in your bank account to another and do not touch the ‘Savings’ account and ‘Wealth’ accounts
- What: Look for accounts with higher interest crediting and ones with easy and solid online interfaces so it is easy to setup recurring payments monthly after you get your salary
- Start here: Working Adults: How To Allocate Your Monthly Salary?
INCOME Level 3: Work on increasing side hustles and extra income
- Why: In today’s digital world, most people can afford to have a side hustle to gain some extra income (through investing or actual working via man-hours) or look at ways to up-skill yourself
- How: Figure out what your current base pay is and whether it is possibly a good opportunity for you to have a side hustle described below
- What: It could be baking CNY cookies, giving tuition, freelance design projects or video production
- Start here: Passion to Profit: How to earn money from your hobby and 5 Easy And Convenient Ways To Earn Money On The Side
This segment basically focuses on the next crucial daily habit of any person – where he/she spends money, and importantly – ‘how’.
SPENDING Level 1: Monitor my expenses (weekly or monthly)
- Why: It is very crucial to understand where you are spending your money in detail (segmented by fixed and variable expenses)
- How: Refer to your latest 3 months worth of bank & credit card transactions and determine where your money is going via categories (eg food, utilities, bills etc)
- What: We would recommend using a simple excel sheet or a hack would be the Seedly App (on iOS and Android) to simply sync your accounts
- Start here: Reduce Your Expenses To Only 30% of Your Salary With This Budgeting Template
SPENDING Level 2: Cut my monthly expenses by ___% (weekly or monthly)
- Why: The next obvious step after knowing how much you spent in various categories is to cut your expenses by ___%
- How: We recommend targeting a single category. For example in F&B or Transport.
- What: Using the Seedly App (on iOS and Android) to set budgets and find creative ways to cut expenses in that category
- Start here: Best Mobile Apps That Every Singaporean Foodie Should Have
SPENDING Level 3: Maximise my rewards by using a Cashback or Miles card
- Why: You should only be in the ‘credit card’ game if you know where you are spending and not overspending to begin with
- How: Simply figure out which type of spender you are and are you a cashback or miles person based on your goals and lifestyle
- What: Next, pick one or two cards (max) to spend on, and use Credit Card comparison sites and Reviews sites to discover the best product for you
- Start here: Know Your Credit Card: Cashback vs Cash Rebates vs Air Miles vs Rewards
This segment basically focuses on the your base of savings and of course managing + clearing your debt if you have any.
We spoke about this at length on a recent MONEY FM on clearing debt and managing your money, on an interview as well:
SAVINGS Level 1: Review my overall net worth (Assets and Liabilities)
- Why: Figure out what you have and what is your current overall position
- How: Plot out all your various savings accounts, and loans you may have (home loan, student loan etc)
- What: We would recommend using a simple excel sheet template or a hack would be the Seedly App (on iOS and Android) to simply sync your accounts together or manually add them
- Start here: Working Adults: How To Allocate Your Monthly Salary?
SAVINGS Level 2: Optimise savings accounts for the highest interest (and rainy day fund)
- Why: Please do not stick to you 0.05% p.a savings account, because you are actually losing out to inflation if you leave your money there
- How: Simply figure out what is your current balance, and which accounts suit you the best. Maintain 6 months of monthly expenses (min) as a rainy day fund (in case you get retrenched or get into any unforeseen accidents)
- What: Use this simple Seedly Savings Account Calculator to get a unbiased result on which account actually suits you the best
- Start here: Cheat Sheet: Best Savings Accounts in Singapore For Working Adults 2019? – Highest Interest Rates
SAVINGS Level 3: Plan out debt repayment schedule and re-finance loans
- Why: In Singapore, it is almost impossible to survive without taking on any debt (for example a home loan) and usually that is between 300 to 500k right off the bat. Loans compound, so the more you do not pay up monthly, the interest will suck you dry
- How: From the total loan amount, start to plan ahead between 10 to 15 years to know how much you will need in your CPF or in your monthly income to pay down your loans
- What: Using a simple home loan calculator that most property site offers or speak to the HDB officer or home loan officers to know exactly how to sort this out
- Start here: Hacks You Should Try To Clear Your Debts Fast And Effectively
This segment basically focuses on the key downside protection in your financial planning, your goalkeeper – Insurance
INSURANCE Level 1: Consolidate all my policies in an excel sheet
- Why: Understand how insurance works and know which type of insurance policies you currently own (VERY IMPORTANT)
- How: Read the article below and know that it is your own duty to know which kind of policies you have
- What: We would recommend using a simple excel sheet template or calling up your agent to figure out the exact policy names (Term, Whole Life or PA plans etc)
- Start here: 2019: What Are The Key Insurance Policies You Should Get in Singapore?
INSURANCE Level 2: Review my policies with agent or DIY to understand gaps
- Why: Your probably have not and will not understand every single thing as wordings are complicated. Spend the next 2-3 hours to understand your policy details.
- How: You should sit down with your agent or DIY call up the company who insured you (if your agent left you) and start understanding how much you are covered and what premiums you are paying
- Start here: How To Do Your Own Insurance Claims Should You Be UNLUCKY Enough To Get A Lousy Agent?
INSURANCE Level 3: Optimise my policies allocation (cost vs coverage)
- Why: For every dollar of coverage you get (for example in term life) there are better alternatives you can always consider
- How: Using the article attached below, you will be able to figure out what coverage you need and also from there, figure out what gives you the best bang for buck
- What: Fully consider all aspects, the company reputation, service, and claims history as well
- Start here: Singaporean’s Ultimate Comparison: Term Life Insurance and Singaporean’s Ultimate Integrated Shield Plan Comparison, Am I on The Best Plan?
This segment basically focuses on the next level. Turn back now if you have not covered your insurance and savings. Protecting your downside is even way more crucial than any upside.
Are you confused if you are ready to invest? You can check out this MoneyFM interview with Junus Eu, a Seedly Top contributor and DIY investor here:
INVESTMENT Level 1: Learn about one asset class ________
- Why: Only invest in what you know. Period. Investing in an asset class usually comes with high risk and to manage that, you will need to know more (gain knowledge)
- How: And when I say ‘learn’, I really mean go for a course, take an online tutorial or read extensively about it
- What: It could be a range from: ETFs, Index funds, Unit Trusts, Stocks, Blue Chips, REITs, etc.
- Start here: Cheat Sheet: Investment Products At A Glance
INVESTMENT Level 2: Build my portfolio and set up my first investment
Fun fact: We are had a First investment AMA on our Seedly QnA platform, ask questions and read answers from the community here.
- Why: Taking that first step in investing is never easy, so you will need to think of what your portfolio should look like and what returns you are potentially looking at
- How: Understand what a basic portfolio of Stocks and Bonds look like and start to plan out a simple diversified portfolio to begin with
- What: It could be a mix of: ETFs, Stocks, Blue Chips, REITs, (or at this point you may want to turn back and opt for Unit Trusts – professionally managed funds instead)
- Start here: Working Adults: When Should I Begin Investing? and How Long Does It Take To Double Your Money In Singapore?
INVESTMENT Level 3: Optimise investments for better and higher returns
- Why: This is the next level and if I could, I would label this from Level 3 to 100. A master is groomed over a thousand years of practice and experience.
- How: Once you are in the market and after receiving your first quarter of dividends or results, you will start to want more and figure out how to beat the market index, pushing returns upwards of 8 – 10% (or more)
- What: Happens to every single return investor. You could devour books, attend courses, seminars or follow model portfolio to see how you can increase your returns over time, as returns compound as well!
- Start here: Singapore’s Top 10 Dividend Shares Among the World’s Best and 3 Signs Your Stock Portfolio Could Lose You A Lot of Money
So with that being said, life is only getting started for you, and you should be really excited. We believe that this is really all you need to thrive in the working world financially and get to a good footing.
At this point, you should have learned the most important money habits and lessons when it comes to starting your own learning journey. So, all the best!
Oh and if you have more questions, we have an open community for you to get your questions answered and to hear from different perspectives.
Check out our blog for more unbiased opinions on your personal finance journey.