From The Straits Times    |

Credit: Jane Tan

Turning 30 is certainly a cause for celebration… but what are we celebrating exactly? In ‘My Dirty 30s’, columnist Samantha Y. reflects on the good, the bad, and the downright ugly truth about what this decade spells for “ageing” millennials like herself. 

There are so many arbitrary achievements that are tied to turning 30, like making it onto some 30 under 30 list, landing your dream job, having life figured out, etc. A common one that I see most of us striving for? Having $100K by 30.

A quick Google search would throw up blueprints from finance gurus on exactly how to achieve this goal — by setting up smart investments, scaling back on your expenses, and making full use of your CPF account. With such detailed instructions readily available, you would think that the goal of $100K by 30 isn’t that out of reach. “If these regular Joes can do it, so can I”, you tell yourself.

First of all, who came up with this magic number? Why $100K specifically? And secondly, among my social circle of early 30-somethings, I only know of one person who has hit this target. I would also like to point out that he’s single, isn’t saddled down by debt or mortgage, leads a simple lifestyle and earns a decent amount thanks to his niche in a very technical industry.

How about the rest of us, who admittedly, were a lot more frivolous with our finances for the bulk of our 20s? Here’s the good news from my small sample of friends: we might not be anywhere close to having $100K in our bank accounts, but we’re also doing OK. Most of us have moved out of our parents’ homes for a few years now, and we are able to afford our lifestyles without pinching pennies. That is a complete win in my books.

But here’s the caveat — just because we abandoned the idea of $100K by 30 doesn’t mean that we’ve completely given up on accumulating wealth. The conversation around this arbitrary goal was our starting point for better money management. Across the board, here are three common things that my peers and I did to build a healthy savings account (and a better relationship with money!):

Cultivating discipline

Well, duh. As dull as this sounds, the crucial first step is making sure that you’re disciplined about saving. For most of us, this means taking stock of what we’re spending on, cutting down on unnecessary expenses, and making sure that our money actually stays in our bank accounts.

One shopaholic friend went cold turkey and did a “no-buy” month to break her habit. Another friend actually quit smoking and started replacing his daily coffee with homemade cold brew. A particularly extroverted friend who worked in the alcohol industry started turning down social invites, so her partying frequency went from every weekend to every fortnight. As for myself, I was militant about funnelling a percentage of my salary from my expense account into my savings account. I’ve been doing this for years and it is the first thing I do on payday.

The point is to start doing enough of these small things now and have them all add up. And you know what they say about discipline being a muscle. All of us fell off the wagon at some point (or several points), so don’t beat yourself up if it happens. Just make sure to get back on track as soon as you can, as often as you need to. Consistency is key!

Gaining knowledge

Finance may not be your area of expertise, but with the plethora of information and tips available for free online, there is simply no excuse to remain clueless. I’m not saying that just reading up is enough to turn you into a stock trading whizz, but you should know the basics, such as using a high-yield savings account, maximising your CPF monies, racking up points on your credit card, and how to invest your money in some way.

As for the more advanced stuff, like retirement planning, starting an investment portfolio to beat inflation and so on? For me and my less mathematically-inclined friends, we choose to enlist the help of a trusted financial advisor. Fair warning though — it might take a bit of trial and error to find the right person. Some of us have surrendered policies at a loss or switched advisors due to a myriad of reasons, such as being oversold financial products or finding out that the advisor just wasn’t the right fit for us.

Having realistic goals

In our quest to amass $100K by 30, my friends and I have been thrown off-track by a few things. Some came out of left field, such as retrenchments, medical expenses and family emergencies. One friend dipped into her coffers to take a break for two months because she was severely burnt out; another put his saving plans on pause when he had to move out just as rental prices were hiking due to family issues.

Heck, you might just decide that travelling and exploring the world is more important than having $100K in your bank account. That is OK too!

Over the years, each one of us have made adjustments so that our goals are a lot more achievable. For some of us, this might mean topping up our CPF accounts for higher payouts in retirement. For others, it can be as simple as paying off student loans first, then deciding where you want to go from here. As for myself? I realised that I would be completely miserable if I scrimped and saved all the way, so I allowed myself to spend on things I enjoy, like the occasional dinner at a fine dining restaurant or going to music
festivals. All within a set budget, of course.

Take it from me – if you’re just starting to manage your finances, it helps to set yourself up for success with small, realistic goals first. It is so crucial to building your confidence, plus it’ll give you the encouragement you need to aim higher. The last thing you want to do is shoot for the moon and then feel so despondent that you completely give up.

And who knows? If you keep at it, maybe you’ll work your way up to $200K by 40!