Dollars and sense for a new generation
Your 20s are a time of youth, fun and adventure. But with that, you could also find yourself in a bit of a tricky situation finance-wise. You’re out making your own moolah and while it may feel great to no longer have to hand over your ang pow money to your parents for “safekeeping”, it also means being fully responsible for all your expenses.
Chances are, you’re also at a point in your life where you don’t have to worry about the financial dependencies of a spouse and children just yet. With that being said, it can never be too early to start planning so that you’ll have a nice and abundant nest egg when the time comes.
Now that your age no longer ends in “-teen”, it’s time to level-up your finance game plan as well. Here are 10 things you need to know to do just that!
1. Fun and excitement don’t have to cost a bomb
Whether it’s cafe-hopping or catching the latest flick at the cinema, your usual weekend activities may well be the biggest culprit behind your dwindling funds. Sometimes, the trendiest things to do also happen to be overrated, overpriced and, well…not that fun!
Instead of squeezing in a cramped cafe bursting with hipsters, consider spending an afternoon in the great outdoors instead. We guarantee that you’ll be making awesome memories without putting a major dent in your wallet.
If you’re completely out of ideas, here’s a list of 50 fun and FREE things to do in Singapore. Congratulations, you now have all your weekends for the rest of this year, sorted.
2. Budget wisely instead of throwing caution to the wind
It’s tempting to go all-out and splurge on a shopping spree (or five) every time you get your paycheck. After all, you feel like a millionaire.
NO. Map out a clear budget and stick to it, splitting up your income to have ample amounts going into categories like food, utilities, savings and miscellaneous purchases. This will keep your expenditure in check and prevent you from going “bankrupt” before your next pay comes in.
To make things easier, there are resources online to calculate budgets specifically for Singaporeans. If you’re curious to know where else your income is funneled to, they’ll also calculate your CPF contribution, allocation and withdrawal amounts!
3. Avoid falling into the trap of unnecessary expenditure
You’ll be shocked, then mightily pleased, to know that a ton of money can be saved each month just by scrimping on unnecessary extras. You don’t need that atas coffee priced at nearly ten whole dollars. You and I both know that a humble bag of kopi will do just as nicely in giving you that dose of caffeine. And at 10% of the price, too!
Thrifty today means wealthy tomorrow!
4. Stick it in the bank for a rainy day
Source Kitty will keep your funds nice and safe.
Accumulating liquid savings is one of the key things everyone must start doing as they venture into adulthood. And no, we’re not talking about collecting water. Liquid savings basically refer to money that goes into your bank account on a regular basis and is placed in an account that won’t be accessed for spending.
The temptation of shelling out wads of cash every now and then for an unnecessarily indulgent purchase is something we’re all too familiar with. By chucking it safely in the deposit of your bank account, you can keep those urges at bay while sustaining an emergency fund for rainy days too.
If you need some help in the discipline department when it comes to your expenditure, give a structured savings plan a try! Aviva’s MyRegularPay and MyWealthPlan both offer 100% guaranteed capital* as well as a slew of benefits that will make it much easier for you to reach your goals.
*100% Capital Guaranteed refers to the total guaranteed benefits payable (that comprises of the Annual Guaranteed Cash Benefits and the guaranteed lump sum amount upon policy maturity) This means upon policy maturity, you would have received at least 100% of the total premiums paid over the premium term. Actual guaranteed returns and projected total returns will vary according to the selected premium term and policy term.
5. Break free from the shackles of loans ASAP
Congratulations on graduating! Celebrations aside, do not make the mistake of sleeping on your loans. The accumulation of tuition fees is probably something you don’t wish to deal with right now. The sooner you pay them off, the better.
When it comes to large chunks of money, it’s easy to want to put it off till a later date. Keep in mind, however, that the longer you wait, the more money you’re giving away to banks in the form of interest.
6. Be wary of loan burdens for your loved ones
Source Avoid this situation, plan your finances right!
Life insurance is vital as it provides protection for your loved ones against hefty loans that belonged to you. Even though there isn’t a need to worry about a spouse or children who are financially dependent on you right now, consider purchasing a small amount of death cover.
In the event of any mishaps, the policy covers outstanding loans and debts such as credit card bills. That way, the financial burden won’t be placed on your elderly parents or other family members to take care of.
7. Know your assets
Don’t go purchasing stuff willy-nilly, get acquainted with the terms appreciating and depreciating assets. Appreciating refers to an increase in value of an asset over time, typically with items that are in high demanded and limited in supply. Conversely, decreases in the value of assets over time are called depreciation. It affects almost everything you purchase, like cars and electronic appliances.
On the bright side, purchases like artwork as well as vintage wine, cars and timepieces are known for having the potential to appreciate in value. Stocks and properties would be the most common go-to investment products. So there’s a handy tip for when you’re ready to start investing!
Start purchasing wisely now and you may just see your wealth grow well before you even hit the big 3-0. Now THAT I can appreciate!
8. Safeguard your income from life’s mishaps
Source A good protection plan means you’ll be well taken care of.
Living benefits constitute the most immediate and relevant aspect of having a protection plan. They refer to payouts while you’re alive, granting you financial protection against a series of unfortunate events like hospitalisation, major illnesses, disability and so on.
At a stage of life where you’ve yet to build your own family, it’s important to gain financial independence in case any accidents happen to disrupt your source of income. Income protection plans in the market generally allow you to purchase up to 75% of coverage for your current salary.
Should you become unable to work due to illness or disability, the benefits kick in in the form of income replacement. This’ll help to pay the bills and cover daily expenses while you get back on track!
9. Get a health insurance plan while you’re in the pink of health
Besides knowing about MediShield Life as well as coverage for hospitalisation and surgeries, there are also terms like excess, deductibles and co-insurance that you must know. While the information overload can seem pretty daunting, that’s no excuse for you to get it done.
Time is of the essence when it comes to obtaining health insurance since better health conditions equate to greater extents of coverage. Get the lowdown on health insurance here. Alternatively, you can sit down and have a chat with a financial adviser representative. You’ll be well-versed on all the ins and outs of health protection before you know it!
10. Plan ahead for a blissful retirement
While your trusty financial adviser representative is by your side, make sure to discuss the various plans and accumulation tools that’ll enable you to achieve your retirement goals.
“Retirement? I’ve barely journeyed into the world of adulthood!”
Don’t scoff, my young friend. While it may seem like a billion years down the road, it’s never too early to start planning for the key milestone that is your retirement. Besides, who knows what life will throw your way in time to come. Get it sorted now and Future You will be thoroughly grateful indeed.
Saving For That Pot Of Gold
You know the saying, don’t put all your eggs in one basket. There’s no sense in earning a steady income but spending it just as constantly on purchases of no value or necessity. Follow the points on this list and your inflow of moolah will be streaming in from numerous different channels instead of just one.
A penny saved is a penny earned. Coupled with investments and the financial security of all the necessary insurance policies put into place, rest assured that your financial planning and protection will leave you well prepared for the future. That’s one less thing to worry about!
Venturing into the world of financial planning can be daunting. Where exactly should you start? When it comes to money, you’d want to go to someone you can trust. Aviva is an esteemed example that has been providing reliable care and protection for their customers. Having a solid provider of financial planning means one less thing to worry about.
This post was brought to you by Aviva.