How Much Should You Save From Your First Paycheck (And Where It Should Go) 

You’re about to enter the workforce and earn a salary for the first time in your life. Although this is an exciting milestone, managing your own money can be a daunting task, especially if you are just beginning to learn about personal finance. 

You may not know what to do with a substantial sum of money in your bank account. Should you pay your bills first or squirrel away some savings? And if you were to save, how much of your salary should you put away? 

What Percentage Of Your Salary Should You Save 

As a beginner, learning and implementing good money habits such as budgeting and saving for an emergency fund form the building blocks of a positive financial journey.  

For example, a popular budgeting method is the pay-yourself-first budgeting, which prioritises your savings over your expenses. 

Every month, when your salary is credited to your account, you can take a portion of your salary and put it to your savings first. Then, you can use what’s left of the salary for your various expenses.   

According to the CPF Board, first time workers can aim to save 20% of their salary or more if they can. 

This is consistent with the widely known 50/30/20 savings rule, which recommends individuals to allocate 50% of their monthly budget towards essential items such as housing, food and transport; 30% towards lifestyle choices; and save or invest 20% of their salary. 

Budgeting rules such as the one above are simplified for easy usage, but they only serve as a guide. They are not hard and fast rules about how much you need to save.  

When it comes to finances, everyone has different needs and priorities. For example, if you’re staying home with your family, you may be able to save more. But eventually if you plan to move out and need to pay rent, you may no longer be able to save as much.   

Another reference point we can take is perhaps the saving rate of Singaporeans. The personal saving rate of Singaporeans on average was found to be 33.7% in 2024. We calculate the average savings rate over the past 10 years to be around 32.0%. This will give us a more extensive view of how much Singaporeans save. 

According to the Labour Force in Singapore 2024 report, the average monthly salary for Singaporean workers in age groups 15 – 19, 20 – 24, and 25 – 29 are S$1,170, S$3,269 and S$4,680 including employer CPF contribution in 2024. After deducting employer and employee CPF contributions, they will have a median take home pay of around S$800, S$2,240 and S$3,200.  

Then, they could aim to save 32% of their take home pay, which equates to around S$256, S$717 and S$1,024. 

However, as mentioned, this only serves as a guide to how much you could save. Everyone’s financial situation is different and has their own priorities.

Now that you have some money saved up, you may be thinking about how you should manage these savings. You can consider investing some of your savings to earn interests and grow your money so you can reach your goal faster. As a beginner, you may want to consider placing your money in lower-risk options as you gain exposure to different types of financial instruments and learn about your risk appetite. 

Where To Put Your Money 

High Interest Rate Savings Accounts 

High-interest savings accounts operate similarly to a basic savings account, except that it offers more attractive interests. Sometimes, you will need to meet certain conditions such as crediting your salary or keeping a minimum balance in your account to enjoy the bonus interests. 

There’s a certain flexibility in placing your money in a high interest rate savings account. You can still access your money anytime with no lockdown period. Additionally, your deposits are protected up to S$100,000 by the Singapore Deposit Insurance Corporation (SDIC).   

For example, MariBank is offering 2.28% p.a. interest on your savings balance, without any minimum deposit requirement. 

However, the interest rates earned with a savings account are not guaranteed and there is always a possibility that the bank announces a lower interest rate at any point in time.  

Fixed Deposits (FDs) 

Fixed deposit accounts is a relatively safe avenue where you can invest a sum of money at a fixed interest rate (that is typically higher than that of a regular savings account). This means you know exactly how much interest you would get.  

Your deposits in the bank are also protected up to S$100,000 by the Singapore Deposit Insurance Corporation (SDIC), in case of sudden closure of a bank.  

Investing in fixed deposits require your money to be locked in with the bank for a tenure of one month to 60 months, in which a penalty may be charged if you withdraw prematurely. So, make sure that you’re putting money that you don’t imminently need for bills or other commitments in a fixed deposit account. 

From time to time, banks would offer promotional interest rates for fixed deposits. For example, UOB is offering promotional fixed deposit rates of up to 2.10% p.a. on a deposit amount of S$10,000.  

Singapore Treasury Bills (T-Bills) 

Singapore T-bills are short-term Singapore government securities bonds. A bond is issued by a company or government as a way to raise funds whether it’s to conduct a project or for day-to-day activities. When you invest in bonds, you’re ‘lending’ money to the issuer for a period of time and in return, you get to earn interests. The government issues six-month and 1-year treasury bills at every two weeks and every quarter. You can buy the bills and hold them until it reaches maturity where you will receive interest. 

For non-competitive bids, you specify only the amount you want to invest and not the interest rates you expect to receive, which means you accept the market interest rates. If you choose to put in a competitive bid, you put down an interest rate you expect to receive. If the rate is not hit, you will not be allocated any T-bills.    

There is a fixed amount of T-bills every launch so there is a chance you may not get the amount of T-Bills you applied for. 

Singapore Savings Bonds (SSB) 

New investors also can invest in Singapore Savings Bonds (SSB) issued by the Singapore government every month.  

The Singapore Savings Bonds is a Singapore government security that you can invest for the long-term for up to 10 years. The interest rates for each savings bond, as well as the returns over different holding periods (of up to 10 years) are made known to investors during the opening of application to buy the bonds so, you get a visibility of the interest rates you will earn for the long term.  

The Singapore Savings Bonds has a step-up feature, which means that the longer you hold the investment, the higher the interest rates you will earn. 

For instance, the Singapore Savings Bond (SSB) issued on 2 May 2025 has an average return of 2.69% over 10 years, with 2.49% interest in year 1 and 2.99% interest in year 10. 

It is also quite flexible in that you can redeem your savings bonds prior to the maturity date with no penalty charged. 

Read Also: Complete Guide To Buying Singapore Savings Bonds (SSB) [2024 Edition]

Switch, spend & score up to S$750 with DBS

Power up your payday with up to S$750! Credit your salary to DBS/POSB to get S$300. Apply & spend with DBS Live Fresh Card to earn up to S$450 more. Register by 30 June 2025. T&Cs apply.