When it comes to earning our first pay cheque, the most common problem my friends and I face are the allocation of funds into the "right" account.

Dear Casey, thank you for your question. I am not 100% sure if I understand your question fully. If I am not answering your question correctly, please let me know.

If you are earning your first paycheck, the first thing you should really do is to slowly build towards an emergency fund. You should have 3-6 months of your income/monthly expenses set aside for this. For this money, you should put into something that is safe and highly liquid. Some possible accounts and instruments you can consider for this money are:

1. Higher interest savings account such as DBS Multiplier, OCBC 360 and UOB One (if you meet the requirements). Thsee accounts can give you interest of say 3.5% p.a.

2. POSB Save As You Earn (SAYE) - This account can give you 2% p.a

3. Singapore Savings Bond - First year non-compounded interest can be about 2%

Once you have set aside this amount, you are ready to set up what I believe is an important second “account” - This “account‘ is called your ”bad mood fund”, This is the money you set aside monthly for you to accumulate and subsequently be avaliable for you to spend, when you are bad mood. The amount that you set aside can be any dollar amount, subject to your affordability. Do not underestimate this “account”. It is of utmost importance. This amount of money helps you feel better on bad days. Money is an enabler. When you feel like spending and you have budgeted an amount that you can really splurge with, you feel psychologically better. It will also give you a abundance mentality.

Beyond these amount set aside, you can now invest towards your future goals.

Hope this helps!