Asked 2w ago
Personally, my expenses (food, transport, insurance, non-existence entertainment) add up to around below $700 each month. I had seen how some of you mentioned that you are able to save up and invest $1.5k per month, and I realised that I am unable to achieve that without compromising on something, like either family's allowance, or making the choice to buy a bicycle to cycle from jurong to amk for work, meals, etc.
You do not have to follow and invest $1,500 each month. Everyone has their own financial commitments.
What you can do is to draw a concrete picture of your income/cash flow. Remaining spare and disposable cash can be your investment budget.
If you have difficulty setting aside a retirement budget to your satisfaction, you will need to assess the following in whatever order you wish:
Insurance. Are you maximising your coverage for the premiums you are paying? Are you overprotected?
Transport. I assume you are taking only public transport at all times. Otherwise, consider cutting down private transport where possible.
Food. If you have been eating out, you may want to consider packing your own food.
Family allowance. Is this too large a percent of your income? If so, you need to voice this out to your family. I presume you are still rather young and it is important for you to build your personal and retirement savings. Can your parents derive some income through a relaxed part-time job to offset your burdens?
Your expectations of retirement. You may need to adjust this, depending on your financial commitments and situation. Not everyone has to follow the $1,500 per month thing.
I wish you all the best.
Don't use the 1500 as a reference or guide. Frankly I feel there is too much FOMO on the seedly community, and there seems to be a lot of privileged folks here who either don't need to support their family, pay student loans, or begin with moderately high net wealth.
I encourage you to do a spreadsheet to track net wealth. I do this on excel, update every quarter end (Mar / Jun / Sep / Dec) for how much I have in my bank, how much I owe (for property loan and credit card balances) and various assets eg stocks, cpf account. I measure how much more or less I have at that quarter end vs the last. I find it far more useful knowing whether I am doing better / worse or saving more / less.
Its a simple exercise that shouldn't take more than 2 hrs (don't need to make that excel super complicated).
Instead of spending your time comparing vs others, use it to think of how you can make your finances better than it is now. Now that is productivity.
I can sit around all day and complain why I can't afford a car when all my peers do. But complaining doesn't change anything except makes me look like a whiner.
I can choose to use that time instead to think of what else I can change in my life to make it better. Some examples I already have in mind for 2021 include
change the payment frequency of some insurance policies from monthly to annually. I expect this change to maybe save at most $200 per year. But its only a couple of forms to mail, and I can enjoy this savings every year thereafter.
consider moving some of my emergency funds to Singlife (vs buying new SSB). Again I don't expect this to improve my situation greatly.
But a few hundred here and there, and over many years, I will probably save thousands or more. In making small changes every year for more than 10 years since graduation, I would guess I saved 20k or more already.
If you need suggestions on where or what to look at for extracting savings, feel free to ask!!
Hey! you're not alone! I'm in such similar situation too. (though my folks have retired but they barely have any savings) And yes, i'm also looking at around $700 per months for my own food and non existent entertainment.
Some of the things i've done:
made sure my insurance are annual premiums which saves me a few hundred ( i made it a point to set aside monthly deduction to another account so that when its time to come to pay the annual premium, it wont be a shocker)
I do have some endowment plans to form part of savings for myself but i spread them across 10 and 15 years. they arent much, but at least when they mature, the money could come in handy when i'm planning to get my own place as i turn 35
i did start on some POSB RSS and Stashaway but just $100/mth for each and keeping as it is (but these are stuff that i started late as it took a while for me to finally have some extra cash after ensuring that i'm well covered and all)
In terms of lunches, i learned to meal prep so in a way i eat healthier and its cheaper too (i do give myself a free weekday to eat non meal prep food) So in a sense i do meal prep for 4 lunch portions. There are weeks where i extend it to 4 lunches and 4 dinner. Does save quite a fair bit and got my interest up in cooking too
i do explore ways to give myself entertainment at a cheaper cost (eg. finding strangers to share netflix subscription so its like $5-$6 for an account) Enjoying straits time subscription at $1/mth for 2 devices (made use of the 9/9 promo so that it last for 6 months, i think it helps to stay in the know for new too)
Occasionally taking on some side hustles on parcel delivery on weekends (helps me to explore my neighbourhood too)
Of course, know that you're not alone in this, do remember to show some self love to yourself or head out for some walks to get some breather when things get too overwhelmed!
Privilege is a huge part of why some people can invest x dollar value, but it means nothing unless taken into consideration how much that dollar value is in relation to spending, saving, debt and commitment.
I have always found it hard to save enough to create a good enough safety net as I started out my career in a low paying role. At just $1.2k a month, it was too small an amount for me to consider investment.
Looking back now, the biggest contributor to my ability to even consider investing was increasing my earning ability within and outside work. Just that confidence in creating value with my own hands and that being recognised by others who are willing to pay me for it, helped me accumulate a good safety net in a few years and I am only just starting to allocate my money to investments.
When I focused on increasing my value when it came to things I loved (e.g. photography, marketing, writing, learning and distilling information for others) I noticed they all centred around a similar theme, so instead of investing in the stock market, the small amount of money I had saved each month, I spent it on investing in myself.
The result is the period when I was super focused on that investment in myself reaped the most rewards for me in my career and personal life so far and allowed me to comfortably allocate $1.5k or more to saving for investments as this is money I am now willing to lose in the worst case scenario since I know I can find ways to create value that help me earn that money back.
I find consistency and where to invest in are more important considerations. Because investing doesn't have to be huge amount. You can even start now with USD 100.
On the US stock markets, you can get 1 share.
If your broker allows, you can even get fractional shares. For example, if you're interested in Apple stock (USD 124.40 for 1 share as of 13/10/20), you can get approx. 0.80 share on your USD 100.
Viola! You're a shareholder and owner of the company. 😊 You can dollar-cost average (DCA) - just buy a bit every month.
Remember, only DCA into high quality companies. I learned it the hard way - I DCA into mediocre company and index for three years...epic fail 🤦♀️
If picking individual stocks are too time consuming for you, you can consider Stashaway. Looks like they have a Monthly Investment Plan (SGD 100/month): https://www.stashaway.sg/r/earn-more-with-a-monthly-investment-plan
If there's a will, there's a way. Hope this helps to open up your options!
3 more comments
Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit.
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By using a proper budget, there is no excuse for not saving money for a specific purpose. At the end of the day, it is all about cashflow management and discipline.
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Hey Anon, instead of looking at specific dollar figures, try using percentages.
As a rule of thumb, try regularly investing 20% of your income every month without fail.
If you're trying to invest $1.5k, that's 2 X your expenses alone, and that's going to be close to impossible for many people to do.
To give some perspective (assume you don't have an increase of income).
If you can invest 20% of whatever you make at 6% p.a for 30 years, you'll end up with 15 years of your income saved up.
If you can bump that up to 30% of your income, that'll be 23 years of your income saved up.
If you can actively increase your income and not inflate your expenses by too much, you can expect to end up saving much much more.
Build strong financial habits and save/invest regularly a good percentage of your income.