Recent studies conducted have shown that majority of Singaporeans are not financially secure. What this simply means is that bad financial habits have finally caught up with us. We’re living in an affluent country where we earn relatively well. But our irresponsible spending habits and the rise of the cost of living paint a daunting picture to our financial lives. It’s never too late though especially for the younger ones. We can say goodbye to our bad financial habits and start having responsible wise financial goals. Here are some financial goals that Singaporeans in their 20s should be saving up for:
Emergency Savings Fund
Everyone should have a contingency fund where they can use for emergency purposes. These emergency situations may be unplanned loss of job, sicknesses, death in the family, loss of house, and the like. An ideal emergency savings fund is at least 3 to 6 months worth of your monthly expenses. It’s 3 months if you’re a little aggressive while it’s 6 months if you’re conservative. The money for this fund should be easily accessible such as in ATMs or savingsaccount in banks. The downside to this is your money is subject to the inflation rate.
I’ll bet this is the most exciting part for every young adult. Everyone wants to travel the world, see different cultures, and experience a lot of wonderful new stuff that travelling offers. But not everyone thinks of saving up for their travels. Irresponsible financial habit means spending by whim or by the spur of the moment. This is why a lot of young adults with good jobs find themselves broke a week before payday. This is why a lot of young adults are broke after or even during their travels.
We can have different milestones in our lifetime. They milestones may be graduating from university, getting that first job, getting married, having a baby, and so on. For 20-something adults, marriage may be currently not in their mind. What they are interested in right now aside from travelling and having fun are possessing trophy items. Something they can give to themselves as a gift and something that they can show off to everyone else. These trophy items can be a sophisticated Apple gadget, a car, and a house.
Most Singaporeans have expressed fears that they are not financially prepared for their retirement. Saving up for retirement is crucial as you don’t want to be spending your whole life working and then end up as poorly when you started. It’s best to start saving up for your retirement as early as possible. Having a shorter saving time span may be more difficult as it requires setting aside a bigger amount of money. Your saving time span should be longer than the amount of time you’ll be living on it. This is if you want to retire early and spend the latter part of your life comfortably. Make it easy on yourself by starting young.