facebookThings Your Grandma says about Personal Finance that is Not Applicable Today



Things Your Grandma says about Personal Finance that is Not Applicable Today

profileCherie Tan

” AH MA, 拜托你啊 (I beg of you) STOP SPREADING FAKE NEWS!”

I remember those times my grandma used to nag at me for:

  • Washing my hair late at night (if not I would get a headache)
  • For not eating everything on my plate (if not my future husband have a lot of pimples)
  • Literally anything, anything she can think of. (Please tell me I’m not the only one!)

Now that I am older, I realised that half of the things that she said was not true. That was me. To be honest, I felt quite cheated.

But it did discipline me nonetheless, that was what she was probably going for.

Well, our grandparents did teach us a bit on personal finance as well, didn’t they?

Here are some things that we finally realised are not applicable today:

Keep Your Money in a Biscuit Tin

We all know this, our grandparents did this in their lifetime. But if we had heeded our grandparents’ advice, our money would have depreciated by 2.4%* every year.

Either that or your grandma is an advocate for POSB, “Put your money in your bank! POSB very good.” (Maybe POSB secretly endorsed your grandma as their ambassador, we’ll never know..)

For example, if you listened to your grandma and saved $1,000, after 20 years:

  • Your Biscuit Tin (0% p.a.): your $1,000 will still be worth $1,000
  • Your POSBkids account (0.05% p.a.): your $1,000 will be worth $1,010
  • Things you can buy with $1,000 before, will cost $1,606.93 now.
    – This means your $1,000 would not be able to afford the same $1,000 that it could 20 years ago. That is your money depreciating in value as a result of inflation.

*Singapore’s Inflation on 10-year average recorded by MAS

This is something that we cannot afford. Considering that we need to save in accordance to a Typical Singaporean Financial Journey (Study Loan, HDB BTO, Marriage etc.) if we leave our money in the biscuit tin, we need to ask for a pay increment of 2.4% every year to be on par with the inflation rate! And that sounds almost impossible.

How can we combat the inflation rate then?

  • First, change your savings account, we can deposit our savings in a high-interest yielding savings account, we have listed them here.

If you are like me and you are still holding onto a savings account that earns you 0.05% p.a. instead of saving with CIMB FastSaver that gives you 1% p.a., the opportunity cost here is S$9.50 per every $1000 saved per year. That’s like 2 cups of Gongcha bubble tea. (I am shook)

Don’t Invest

“Don’t invest, sure lose money!” 

More often than not, our grandparents have burnt their fingers in investment. Maybe in their era, they trusted their friends too much, you know the #kampungspirit, and invested without doing their own research and lost some money. So they lived to tell the tale and warned us from investing.

Aforementioned above, we cannot afford to have our money eroded by the inflation rate. So apart from putting our savings in a high interest earning savings account, we should make our money work for us by investing!

There are many ways available for you start investing if you have not done so. One myth that needs to be busted is, “you need a lot of money to invest”.

Not true, what I did was to save $100 a month with a POSB Regular Savings Plan with $100 a month that invests into an Exchange Traded Fund (ETF) that tracks Singapore’s market index, The Straits Time Index (STI). But there are also a lot of other alternatives that allow you to invest in the stock market with a monthly amount.

It is very important to do your research before you invest in anything, there are abundant of information available online. But also one key thing to take note, invest in something that you like or support.

Don’t Get Credit Card

“Don’t anyhow use credit card to spend money. Don’t spend money that you don’t have.”

Spending money that you don’t have – that literally is what spending on credit is. That is technically the concept behind credit cards, where you spend first, pay later.

Having a credit card does have its benefits as well as its downfall.


What can you earn from using credit cards?

  • Cashback/Rebates
  • Miles
  • Petrol Savings etc.

We have listed the benefits of different credit cards here, so if you are looking for some savings do check that out!

Food for thought: If you earned rebates on buying the things you need, you saved money. If you were buying things to earn rebates, there were no savings.

Having a credit card also allows you to convert big purchases into monthly payments (e.g. Courts, Harvey Norman, Apple).

Which is very useful if you are planning to renovate your house.

Source: Apple Singapore


If you are a spendthrift, it is best that you listen to Ah Ma and avoid this altogether, take it from me, a fellow spendthrift (sobs). We have seen people burying themselves in credit card debt upon their first job and asking our community for help on our Q&A page, you can view his situation here.

The interest on the credit card loan snowballs at 24m/s (Just kidding, interest on the credit card loan is at about 24% p.a.!) It makes your purchases so much more expensive, it is so not worth it!

Waits Till The Last Minute to Visit the Doctor

“Don’t need to see doctor. I’m okay, don’t waste money.”

Ah mas have an extremely bad habit of not visiting the doctor until the last minute where she really cannot tahan (tolerate) anymore. This is their way of saving money, I do admit that I learned this from my grandma as well. Until the day where I almost fainted, I realised I should not risk it anymore.

This short-term saving from not visiting the doctor increases the risk where you are required to spend more if your situation is less ideal.

For example, not going for yearly health checkup saves you on the consultation fees but increases your risks because you are unaware of what is going on in your body.

If there are situations that could have prevented, early detection would save your life and your pockets from future medical expenses!


About Cherie Tan
Turning finance into boba-sized pieces. One iced milk boba tea, please!
You can contribute your thoughts like Cherie Tan here.

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