How can I start planning/saving for a HDB Flat even though I'm single for now?

Hi anon,

Given that you will contribute 23% of your salary to OA, that is $1035/mth without accounting for salary increases or bonus/AWS. Assuming your OA balance is now $0, in $5 years you can expect around $66K in your OA account, and more likely closer to $70K-$80K. Let's also assume that you will want to leave the first $20K in your OA to maximize interest.

If you are combining finances with your spouse to purchase a BTO, then your combined warchest will probably amount to around $100K-$120K. This is usually sufficient for a BTO downpayment, so all you need to do is to ensure that you remain employed and continue to increase your human capital and by extension your salary. There's no need to invest your OA monies to try to get more returns, given your expected timeframe. Most BTOs are around $400K-$500K so a 20% downpayment is $80K to $100K.

To play it safe, you can also save up some funds in a high-interest bank account. Some expenses relating to a BTO purchase can only be paid for in cash, and one of the biggest expenses will be your renovation and appliances. By saving $500/mth in a high-interest bank account (at least 1%), you'll have a fund size of $30K from your end to take care of these expenses.

In the end, it's about right-sizing. Don't feel pressured to buy an EC just because your peers are getting one. You'll want to be able to comfortably pay off your house while having cash reserves for other things such as children/investments/retirement. There's no point in being asset rich and cash poor unless you wish to monetize your house by renting out a room or two in future.

You should do fine.