Siao On Saving? SG’s 20s Money Wake Up Call!

Okay, Singaporeans, let’s be real. How many of us have that sudden ‘aiyo, I need to save money’ moment? You’re not alone! It’s easy to get caught up in the hustle, but what happens when the reality of saving hits you?

Current State of SG Savings

• Many young Singaporeans are starting to feel the pressure to save, especially after experiencing job changes. Like one Redditor said,
  

  “But I did basically squander away my 3 years of salary on travelling extensively and shopping and have finally finally reached a lightbulb moment where I realise DAMN u rlly need to wake up if you actually want to stop thinking a.”

• The average Singaporean in their mid-20s earning around $6,000 take-home pay is often figuring out how to balance life experiences with financial goals.
• While some prioritize travel and experiences, others are starting to focus on building an emergency fund, with the common advice being to have about 6 months of expenses saved.
• Discussions around where to park savings are common, with options like high-interest bank accounts (like OCBC 360) and T-bills being debated. Redditors are also looking at corporate bond funds like MBH.

Key Challenges Facing Young S’poreans

1. The guilt of spending on experiences, especially when peers seem to be saving aggressively, can be a real downer. As one person mentioned,
   

   “Was really hard to answer to peers when they ask “how are you travelling so much? Are you not worried about savings..” etc thus the initial pang of guilt.”

2. Figuring out the best place to park your money is confusing. There are so many options from high-interest accounts to investments, and it’s hard to know what’s right for you.
3. Balancing immediate desires with long-term goals like buying a house or getting married can be super stressful.
4. The fear of job insecurity is real, especially after layoffs, which highlights the need for a solid emergency fund.
5. Many are questioning if having a lot of cash sitting in the bank is the best move, given the potential for compounding returns through investments.
   

   Remember that extra cash you leave in the bank is missing out on compounding.

Smart Ways to Handle Your Money

• Don’t beat yourself up over past spending! Experiences are valuable, and it’s never too late to start saving. As one Redditor wisely said,
  

  “Travelling when one is young is never a waste of money because you might not have the time or energy to do it later when you are older. Consider it an investment of memories.”

• Start with a clear emergency fund goal (around 6 months of expenses). Use high-yield savings accounts like OCBC 360 if you can meet their requirements, but don’t stress too much on the “best” option.
  

  Time to time the “best” bank account changes – but as long as it suits your needs, that’s fine!

• Consider diversifying your savings and investments. After your emergency fund is set, explore options like corporate bond funds (e.g. MBH) or ETFs (e.g. VWRA). Don’t forget your CPF OA for housing.
• Be honest with yourself about your spending habits, and adjust your budget accordingly.
• Don’t be afraid to seek advice from peers or financial professionals, but ultimately, make decisions that align with your own comfort level and goals.

Source: Finally starting to be financially aware