From The Straits Times    |

The pathway involves saving 50 per cent of take-home pay and spending less than $32 a day. Quite reasonably, some readers wrote in to point out that big-ticket items like travel would throw everything off course. Well, not quite, I argue. My calculations assumed three months of extra income for every work year – the 13th month plus two months of bonus.

My civil servant friends tell me they get that sum, or maybe even more.

Even after the 20 per cent Central Provident Fund deduction and saving 50 per cent of the take-home amount, a fresh graduate on the median income of $3,050 will still have a pot of $3,660 for that three-month extra income.

The amount will be reduced slightly after deducting income tax. After that the cash can then be spent on holidays, new clothes and the like. My experience shows that this is enough for one long trip within Asia, with a good amount left over to be spent however you want. In fact, I held back on longer tours until I had worked for a couple of years, ensuring that I had enough savings by then.

Some of my friends have separate bank accounts as they save up for big-ticket items. Products such as OCBC Bank’s Frank account even allow you to set up sub-accounts – at no charge – for various items such as travel.

Holidays are all about letting our hair down – and with good planning and budgeting, there is no need to get frazzled over the impact of these enjoyable indulgences on our carefully mapped out financial journeys.

– See more at: http://business.asiaone.com/news/good-holiday-eye-budget/page/0/2#sthash.RWg0OS4h.dpuf

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