Sunday 29 January 2012

Personal finance 1 - Savings

Do you have a rich father? If no, please continue to read this.

Savings for Singaporeans is a must have, it is something we need to have and accumulate, if not, we are probably unable to fulfil the below needs:

Car:
To be able to afford a car, you need to have savings to cater for at least a few months worth of instalment, apart from that, there is a need to cater for maintenance cost, insurance cost and road tax. If you intend to cut down on your monthly loan payments, you need to put it a larger sum of down payment.

House:
To book a new flat at HDB, you need to put in 1K~2K worth of option fee. If you are buying a resale flat, you need to cater for agent's commission of 1% of purchased price, option fee of 5K will be required to exercise the option, lastly, the buyer need to come up with the down payment of 20% for the flat's valuation. Lastly, there is the renovation cost required, which easily comes up to around 30K$, it is not advisable to take a renovation loan due to the high interest rates.

Marriage:
You need money to buy the engagement ring, be it lee hwa or cartier. Price varies from 500$ to 12,000$ based on the carat size and the requirement of your partner. A pair of wedding bands can also cost more than 500$ for a mid tier brand. There is also the photography package that cost around 4K$. We have not even included the honeymoon cost, ang pow money for the in-laws (for guys) and lastly to standby the money to repay the difference for the wedding dinner package should the ang pow money received fall below the average cost for part table.

Starting a Family:
Government encourages family planning but the cash perks that there are offering are simply insufficient. The cost for a delivery package for a gynaecologist is around 3K$. There is also cost for repeated gynea visits. Apart from that, major expenses include confinement nanny and tonic food for the wife. We have not included the baby expenses like baby cot, pram etc.,

With enough savings, we can breathe better when it comes to the expenses required, nobody can help us apart from ourselves.

How to save?:
1. Forced savings from young. Pay yourself first. Create a separate bank account, budget a fix amount to be transferred to the account once you receive your pay check. Any other additional income, you can put inside as savings too.
2. Cut down on expenses and instill delayed gratification. Be frugal. Do not be influenced by peer pressure for luxury items and learn to say NO to sale people.
3.Monitor your expenses to up to 3 months to understand your spending habits and make improvement.

After many months, you will see your savings being accumulated. slowly and steadily.

2 comments:

  1. You don't need an MBA to learn how to save money and invest in your future. It's a matter of interest. Therefore, I cultivate my interest in personal financial planning to motivate myself to be frugal and save for the future.

    ReplyDelete
  2. This info you provided in the blog that was really unique I love it!!! the credit people

    ReplyDelete