Working Adults: Money Checklist In Singapore
What am I not doing financially?
Life in your 20s and 30s can be a financial mess. Late night partying and long hours at work (rinse and repeat) immediately after coming out into the working world.
On the weekends, you ponder… What other Singaporeans are doing with their financial lives and what are the key areas you should probably look at.
5 Important Checklist Items
- Sort out your money accounts
- Get basic insurance plans
- Understand and start basic passive investing
- Work towards a first financial milestone
- Join a free community to learn together
1) Sort out your accounts
This is extremely crucial and it follows the ‘pay-yourself-first’ principle. A proven method to limit you from overspending and essentially build up your savings over time. You can set this once and let it run on its own over time. (Recommended baseline % benchmarks)
Savings (20%)
- Where the chunk of your Salary gets credited to (your pot of gold)
- Look for the highest interest account based on your balance
Spending (50%)
- Where you limit your spending to (eg 50% of monthly income) and pay your bills etc from this account
- Both fixed expenses (e.g rental, telco bills) and variable expenses (e.g. Eating out, movies, shopping)
Wealth (30%)
- A chunk of money which you allocate each month to a passive investment
- It could be just one of the RSP (regular saving plans) which are offered by any of the banks
- Pick one which you feel is best suited to your investment size accordingly
2) Get basic insurance coverage
The next important and crucial step to setting the ‘worst-case scenario’. Either way, your financial planning friends would most likely approach you (or already done so). Take an evening to properly understand what policies you currently are on. There is a full list of essential policies we discussed but I will just highlight the two most important ones below:
- Whole life or Term life: In case of death, your family gets paid out the sum assured
- Health: For hefty hospital and surgical bills when you are still alive and need treatment
Recommended: For insurance, it is always better to sit down with an advisor to properly go through these policies as every individual’s situation is different. But first read up beforehand or after and have your structured doubts to challenge their recommendations. It may seem a very complicated product at first but that’s where we have made it simpler to understand 🙂
3) Start passive investing
Many Singaporeans often confuse investing passively with things like day-trading, complicated charts, and rough excel sheets. Understand the basic principle – Higher Risk, Higher Return. Here are the steps to get you started easily, better late than never.
- Understand the different investment products available to you
- For beginners, read up on Exchange Traded Funds (ETF) and Singapore Saving Bonds (SSB)
- ETF: You can start by just doing it online with your existing iBanking accounts easily
- SSB: You can start by checking out the steps on investing in your first SG government backed bond easily
Remember, starting is key. Do not worry about making a 100% return or beating the market. Following the market (with index ETF investing) would be good for a start and at least you experience what investing is really like, rather than gambling or speculating.
4) Work towards your first financial milestone
This is crucial because it gives you the motivation to keep going. Here are some easy ones which we crowd sourced from everyday Singaporeans:
- Amount based: Hit first $10k savings
- Amount based: Hit first $5k investments
- Goal based: Save up enough for HDB BTO down-payment (e.g. $30k)
- Goal based: Save up for a year end holiday with my loved one (e.g. $5k)
That being said, everyone has a different kind of motivation to make you create a habit. Find your own unique style and keep to it. You can simply refer to the chart above and what is the rough expense milestones every Singaporean goes through in life.
5) Join a community
We cannot stress this enough… This personal finance journey that every Singaporean goes through does not need to be a taboo subject. In fact, as a community of learners (people who ask questions and answer), there are a lot of benefits and mutual unbiased learning.
Some Community Questions & Answers:
- What is the cheapest way to invest in ETF outside of Singapore?
- I’m 26 this year and planning to start a family in the coming 3 years, what should I be aware of financially?
- What are some of your good hacks with GrabPay?
Feel free to join, we are very strict on NO PROMOTION and NO ADVERTISING rules, so if you are looking to sell something or promote a product, please look elsewhere. For everyone else in Singapore who is looking to learn together and help each other make smarter financial decisions, this is the place for you!
