Asked by Anonymous
Asked on 10 Jun 2019
Am I on the right path, or am I spending too much?
-I'm 27, with a savings of 65K (in the bank)
-with life insurance & p.a
-Invested slightly less than 8K in total in my company shares from 2015 (now worth roughly 12-13K in 2019)
-Invested $300 monthly in axa ipl sub-fund, min. commitment of 18 months in my 3rd month
-I spend monthly roughly 1.3K (membership, rent, food and bills)
I don't know your salary, but it seems like you are reaching 100k in networth before age 30, so congrats!
The amount of savings should also depends on your income. If you are saving $30k a year and earning $100k a year, that is a healthy ratio.
If you are earning $500k a year and saving $40k, thats not a lot of savings.. :)
On the other hand, if you are earning $35k a year and saving $30k, I think thats horrible... you will have too little leisure and happiness.
Save a healthy rate of 20 - 40%
it depends on individuals too. If you failed to save 20 - 40% doesn't make you a bad person, it could be that your family requirement is different from the rest.
17 Jun 2019
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For 1.3k a month including rent, i do think you are doing well!
At 27, I would probably put more towards investments.
Additionally, think about your investment goals. What would you like to reach, and are there any big ticket items you are looking to purchase in the next five years? Formulating a plan towards your goal would definitely help inform how much you save vs invest.
17 Jun 2019
65k savings at 27 yo with life insurance worked out and other investments. Would say its not too bad.
If your monthly expenditure is 20% of your monthly salary, assuming that's the case and your monthly salary is 6.5k.. it would be a reasonable level of spending/savings. Preferably do not spend more than 40% of your income if possible.
Rather than focus on your spending, how much do you set aside as forced savings monthly? Pay yourself first by setting a side a monthly amount as pure savings (untouchable), then paying off your essential living expenses like rental, food, utilities.. whatever remains will be your spending cash or extras for investing.
I assume 65k savings is enough for more than 6 months of emergency savings already. So you might want to consider using your future savings on riskier /higher yielding investments to grow your money.
17 Jun 2019
You're doing really well so far. What's your monthly savings though?
You should really consider investing more of what you have in the bank.
With savings like that, there's a decent chance your OA has been fairly filled and will mitigate most, if not all the downpayment already - so you're holding onto too much cash unless you really want to spend it all on your wedding + reno...which I think you'd consider really excessive.
Especially seeing as how you're concerned that 65k at 27 years old + investments + insurance might not be enough.
I offer formal investment advice with a strong track record - you can read this if you think it might help.
17 Jun 2019
Am I on the right path?
By income, u are on the right track but do u know understand the ILP u r committed to?
By savings of $65k, u r doing quite ok after all the expenses so far.
By shares in your own company, are u getting it free or u are buying at ur own time on target?
Am I spending too much?
By life insurance, is your coverage sufficient and at the right price?
By ILP, is not just about the commitment but what is ur exit strategy before it become too costly by age?
By spending around 30% and saving 70%, the saving track record is good so far.
Hope my replies help!