1. Determine A Budget
Know how much you are spending every month. Then, decide which expenses are necessary and which are not – it will allow you to draw up a realistic budget. As a buffer for emergency spending,
Fiona (account manager by day, money-savvy blogger by night) recommends adding 20 per cent more to your budget. She shares, “If your monthly salary is $4,500, your take-home should come up to $3,600. Supposing your budget is $1,500, the additional 20 per cent means you will have about $1,800 to spend and $1,800 to save.”
Lim Shiyun, a financial services consultant with AIA Singapore, observes that it is typical for most of her clients to spend at least half of their gross monthly salary. So taking the $4,500 as an example again, this means that expenditure can go up to $2,250 – a little beyond the $1,800 Fiona recommended. “The other 50 per cent can be divided thus: 20 per cent to CPF; and 10 each for savings deposits, insurance plans and investment policies,” she explains.