Asked on 26 Aug 2018
Let's us have some scenario base, using my personal experience as example - hopefully it can be related to you somehow.
My starting pay for my IT career is $1.8k before CPF. And because I opt for part time uni, I need to save my uni fee, so I put aside $500 per month. I gave my parents $300 per month (part of it is to pay my mobile bill). then education loan + insurance $200 per month.
I take home: $1,440
School Fee: $500
Education loan + Insurance: $200
Left over: $440 (30% of my take home) for expenses, etc.
So the questions which you need to think of:
List out your objectives, this helps you make a better decision making. In my case, my priority is my school fee, that explains why largest amount is on it.
In my case, I make it a point how much I would give my parents so I will spend lesser.
So the main flow usually is 1>2>3 but execuation will be 2>3>1
Another tip for ya - do not put 100% of all your saving into investment, do divide them out. You may use part of your saving for investment classes to learn & understand them before attempting or classes to enhance your skillset. And it is always okay to start your investment journey small (if you are looking at saving investment)
Hope this helps you to think through. I do understand the take home amount may be little but things can be done if you set your mind into it. Do PM me if you wish to have some detailed discussion on it. Good luck :)
Savings always comes with a purpose. But there are two purposes that savings must fulfil:
1) savings set aside for emergency use - you must have this amount of savings up immediately if you are sole breadwinner for the family. A rule of thumb is 6 times your monthly expenses
2) savings set aside for short to mid-term purposes, such as travelling, getting a higher degree, and etc.
Parent's allowance also comes with a purposes. Allowances may differ depending on:
1) whether you are already paying bills for your parents
2) the lifestyle your parents have
3) if your parents use the allowance you give, to give back to you, e.g. they provide breakfast and dinner for you with the allowance you give them
You should list down the purposes for both savings and parents allowance, and negotiate from there. No right or wrong just different depending on individual circumstances!
It means that your take home pay is approximately S$1,500.
For such scenarios, there are 2 things that you can work on first before thinking about portioning out savings and parents' allowance.
1) Increase your take home pay -
Can suggest that perhaps you take on some part time jobs which pay hourly or take up GRAB (if u have a driving license). You also have to take into consideration the amount of free time left for yourself to rest, WORK LIFE BALANCE.
Another suggestion is to take up courses to upskill yourself so that you can qualify for other opportunities that have a better income.
2) Cut expenses
Download an expense tracking app like Seedly and apportion a certain % of your income for specific purposes: Food, Transport, Miscellaneous, Housing, Insurance, Savings, Investment, Parents. Once you have come up with the expenses, make sure you stick to it.
Hi! I would consider the following before any solution (because different people have different circumstances).
Really, because they can support themselves you may want to consider giving them a token sum and allocate more to your own portfolio of savings; then investments. Let compound interests work in your favor so you are in a better position to take care of them in future.
If they need your help to contribute to the household, what are the things you can contribute? I started small with groceries (with good planning you can save alot and only CNY is very expensive) then electricity bills and insurances.
Try for 50% necessary expenses (you + household), 30% for optional expenses (save remaining if possible) and 20% (must save) if you can.
Make it a habit to track your expenses. DO NOT sign up for credit card based on what the bankers said. Trust me, having "extra cash" that doesn't belong to you is a nightmare they are selling. Get a credit card for the rebates and that's it.
Review your portfolio (assets/strategy) every 6 months and see if you need to make adjustments accordingly. Also, make sure you park your money in a good interest account (CIMB Fast Saver maybe?).
Hope this helps!