After more than a decade and a half of education, many young Singaporeans (finally) graduate from school and enter the working world. They start thinking about the kind of jobs they want, the people whom they wish to work with and the salary they hope to earn.
While these questions are important, it’s equally important for young working adults to learn how to start managing their monthly salary. And similar to eating right and exercising well, adopting the right financial habits can go a long way in ensuring that you manage your money well.
Start Saving Early
The first thing you need to learn is how to save. If you do not save, you will never have enough to plan financially for other areas such as 1) big-ticket items that you need to spend on, 2) insurance policies that you need to buy and 3) investing for additional returns and income for the future.
One of the first financial goal that you should work towards is an emergency saving account. This should be between 6 to 9 months of your average monthly expense. If you spend about $2,500 a month, you should aim to have about $15,000 to $22,500 in savings.
Your emergency savings should also earn you a good interest return. You can read more here about the best savings account in Singapore for working adult.
Here are some other articles that you can consider reading.
Plan On Your Insurance
As young graduate who are just entering the workforce, your health is the biggest asset that you have. With good health over the next few decades, young working adults will be able to work and earn a living for themselves and their family.
Insurance matters may appear challenging, but they don’t have to be. To begin, you first need to understand the various types of insurance policies that a young working adult may need. Once you have a basic understanding of the various types of life, health and general insurance policies that are available, you can find out more about them in details, before committing to a plan.
Here’s a list of articles that you can read to better understand the common type of insurance policies.
Invest For Your Future
Once you have taken care of your saving and insurance need, it’s time to start investing for your future.
The idea of investing boils down a very simple principal. Instead of working for money, you let money (i.e. your investment) work for you.
You have to start somewhere. In the past, there was a perception that you need to be knowledgeable and/or have lots of money to start investing. This isn’t true.
You do not need to be super rich or to hold a degree in Finance to be investing. Investing is also not gambling or trying to make insane profits. Rather, investing is a valuable tool in your long-term financial planning portfolio that allows your money to create more value for you. There are in fact many ways you can start investing in Singapore from as low as $100 a month.
Beyond that, it’s also good to know some other investing strategies and approaches. As your investing knowledge and experience grows, you may also be keen to try out different ways and methods of investing.
Get Yourself Equipped
Whether it’s saving, insurance planning or investing, it’s important to get yourself equipped with the right knowledge and information in order to make the best financial decisions for yourself.
Unlike other choices in life such as what to eat for dinner and where to travel to for your holidays, financial planning decisions such as the insurance policies you buy and the investments that you make have long-lasting effect. It may be years, or even decades, before you have to claim on your insurance policies, or reap the reward of your investments. So it’s important for you to make the right decisions for yourself today.
Need A Loan For Your Expanding Business?
Find financing solutions for your business needs through OCBC Business Banking today.
Join The DollarsAndSense Business Community
For more content that helps entrepreneurs, freelancers, and self-employed individuals and learn to build better businesses, join the DollarsAndSense Business Community on Facebook.