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INDEPENDENCE | Money

3 women on their budgets and mindsets towards saving

The best time to start is now

By Her World Team - 

Image: 123rf
Image: 123rf
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Don't know how to go about getting your finances in order? You can start by first identifying your financial goals.

"Then prioritise these goals, whether they be going on a trip, pursuing higher studies or buying your dream car. It is also important to set up an emergency fund with three to six months of income to prepare for any unexpected expenses and emergencies," says Cassandra Wee, Head of Insurance at SingSaver.

If you want to grow your nest egg but are new to it, she suggests first automating your savings plan.

"Setting up an automated savings plan with a standing instruction to ensure that a fixed amount of money gets invested each month will make it easy to achieve."

And once you've got that sorted, you can try your hand at creating your investment portfolio.

"Investing is a great way to make your money work harder for you. For instance, if you can save about S$2,000 every month for 30 years, that’s S$720,000 in accumulated savings. If you keep your savings in a bank account and assume a healthy compound interest rate of 1.5% p.a., that amount could potentially grow to around S$909,730 at the end of 30 years."

She adds that with investing, it's a good idea to take a multi-asset approach with adequate diversification as this allows returns to be protected even when the markets are volatile. And that once your emergency fund is well stocked, you can start looking at Exchange Traded Funds (ETFs) and blue-chip stocks.

However, Cassandra cautions that you should avoid investing in what you don’t understand.

"It is important to keep your risk appetite in mind while investing. Risks can be measured by volatility - the larger the swings in an asset’s price, the greater is its volatility. For short-term financial goals like buying a house in 5 years, choosing a higher-risk investment product will mean that you will see greater volatility and potentially lower returns. For long-term financial goals such as your retirement portfolio, where the investment horizon is 10 to 30 years, you can afford to take on more risk."'

Three women tell us about how they manage their budgets and their mindsets towards money.

Jay Min, 24, digital marketer

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"I try to stay within a S$500 budget each month and save up the rest. I am still living with my family, so I do not have any bills to pay except for my phone bill, which is around S$50 a month.

For big-ticket items, I will think over it for a while. If I still want it after a few months, I will get it. I am constantly on Shopee looking out for discounts and would buy in bulk if something I use daily goes on sale. I also opt for cheaper alternatives. For example, I always take public transport instead of taking Grab.

I am looking to start investing next year. As this is my first year as a working professional, I would like to save up some funds first."

Kendra Tan, 25, writer

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"I am very frugal and only spend 15% of my salary each month. I don’t have that many bills to pay — only phone bills and credit card bills. I mostly spend it on eating out and activities. I don’t really go shopping for clothes or shoes or branded goods. I save and invest the rest of my salary.

I believe what I do in my 20s make or break my future. That’s why I am saving and investing so much money because I want to enjoy my life and be able to retire when I grow older. Saving aggressively when you are young is important, but once you have six months to a year of emergency savings, you should invest the rest because having too much cash on hand is not very efficient.

I believe in thinking long term and do not put all my eggs in one basket nor gamble in meme stocks. I invest my money in more stable and less volatile stocks (with some dividend payout) including OCBC, Singapore Airlines, Singtel, CapitaLand and the like. I also have an endowment plan (good for lazy people who don’t want to think too much about allocating savings) and some bonds. Whatever it is, it beats having all your money sitting in a bank. That being said, I recommend putting your savings in a bank that gives you higher interest rates such as OCBC 360 or UOB One."

Jayeeta Mazumder, 36, content manager

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"I like to think that I’ve always been money-conscious. I lead a pretty frugal life with occasional indulgences like travel, a spa day, or dining out every now and then. I’m mindful of the impact our consumption has on our environment, so I try to shop less or shop smarter so that whatever I buy lasts longer. I’d manage to save and invest about 75% of my salary almost every month. But that changed a little recently because I had a baby earlier this year. I still manage to put aside a good 65% of my salary.

My motto about money has been simple: save and invest enough to not have to compromise on your lifestyle at a later age. It’s a good question to ask yourself: can I afford my current lifestyle at 60? If the answer is no, you’re not doing enough to work your money harder.

The biggest gift you can give yourself in your late 20s to early 30s is a financial advisor. As a working mum, having one helped me plan my finances before and after a baby in the least stressful way. A holistic plan means heavy-duty budgeting, investing, insurance policies, retirement, and estate planning. I mostly play it safe when it comes to investing strategies and put in money behind less volatile stocks. Recently, however, I started to toy with the idea of diversifying my portfolio. Diversification lets you eke out opportunities in sectors like technology. But you have to bear in mind that it doesn’t guarantee high returns or rule out the risk of losses."

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budget tipsmoney saving tipsmoney tips
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