facebookHi, Currently a 25M. I save about 50% of my monthly income, and my question is how should I allocate this 50% into savings (for wedding & BTOs) and investments (currently using Stashaway)? - Seedly

Anonymous

17 Feb 2020

Robo-Advisors

Hi, Currently a 25M. I save about 50% of my monthly income, and my question is how should I allocate this 50% into savings (for wedding & BTOs) and investments (currently using Stashaway)?

To give more context - I already have put side an amount that is 3 months of my take home pay. Am planning to get married within a year or two. So, should I allocate more money to my wedding/housing goals or maybe split 50-50?

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Pang Zhe Liang

20 Jan 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

I was just discussing the exact same topic with my partner last weekend! To share a little more, our house is coming next year, and my car is expiring thereafter. Therefore, the financial urgency was certainly waking us up.

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-pers...

Next, create a budget that is capable of helping you to plan for the future. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly...

To understand what you need for the future, create detailed tracking and calculations on the amount that you need for each goal, e.g. downpayment, renovation, wedding.

By the way, what I mean by detailed is e.g. to list down exactly what you intend to buy for your house and the amount that you are intending to spend on. This is because we will often underestimate the amount by a huge margin! Plan as if the event is happening next month.

Once you have all the numbers ready, discuss with your partner on the level of risk that both of you are willing to undertake in order to reach your goals. Personally, we found ourselves to be playing it too safe. As a result, one year was wasted.

With this in mind, both of you need to reach a consensus on the amount of risk and capital that you are willing to use in order to grow your money further. Thereafer, diversify across different investment tools and asset classes to create a well-balanced portfolio.

Personally, I have also started an investment plan last year (a couple of months before we paid for the downpayment of the house). This is for the purpose of our kids' expenses in teh future. In case you are wondering, we don't have kids yet. However, this is part of the planning that I am willing and able to do now in order to have a better life later. This is especially because the moment we collect our house, we will be expected to empty our banks and not save much money for quite a while.

All in all, discuss on your partner and come up with a comprehensive calculation on the amount that you need. Thereafter, list down all the investment tools that are able to help you all reach your goals. Then, set timely reminders to do regular reviews. Finally, make adjustments whenever necessary.

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