Asked on 18 Sep 2018
Looking to get some really good advice from those who have been there and done that to hear your experiences so we can plan ahead as a couple and not be shocked when the time comes, post-marriage :)
Congratulations! You guys gonna settle down in 3 years time, not too late but of course if start earlier will be easier.
Sharing the experience of my close friend which helps and quote from famous financial blogger with very good planning examples:
(A) Love Nest:
(1) With either side parents (Minimal cost but less privacy)
(2) BTO, wait 2.5 year, to decide where to stay. (best to apply after ROM to avoid any last minute changes lost of deposit etc since 2.5 years is a long time)
Related: Bank loans or CPF to pay for the HDB.
Read this from seedly Ming Feng to know more: https://blog.seedly.sg/the-complete-guide-bank-hdb-loan/
(B) Getting marry: weddings, reno and baby related cost:
Read from Kyith, investmentmoats with some suggested plans/solutions on how to plan and come out with the $:
Assuming both earn 3k, getting marry, reno and baby in 3 years time, I modify it to my suggestions of planning :
Step 1: Cost of marry: weddings,reno and baby is about 89k
Step 2: The time you need the $ and the amount. I've updated Kyith sheets to my own thoughts in terms of the timing:
Step 3: How much is take home pay (after Employee CPF 20%) for both. Assuming 3k each person and less 20% Employee CPF and with 2 months bonus, both combine take home pay is 3k x 2 person x 14 months x 0.8 (excluded 20% employee CPF) = 67.2k (assuming no increment but in reality will have increment in 3 years time. If not you should find new job after 2 years! :P hahaha!)
Step 4: How much to save each month to get to the target. Eg. Both earning 3k, getting marry, reno and baby in 3 years time, will need to save 40-50% of your combined income 6k, which is about 3k. This is assume you have no interest but you can put into high interest savings account such as DBS Multiplier with just both salary credit + credit card spend of just $1, you'll get 1.9% p.a. credited monthly so it will compound more and faster!
Step 5: To simplify it, just use an excel sheet, list down your income on the left column A for the name and column B for the amount and on right, Column C and D for the expenditure name and amounnt. Suggestion on the plan to reach 50% savings/monthly is achievable as below:
Step 6: Cut expensens (leak!) and increase income. Eg. If my explain in step 5, if you can cut restaurant meals and only eat hawker or cook and bring out to park share / picnic, you can save $100 monthly immediately ($100 use to purchase groceries for home cook meals).
Step 7: Settle debts and build emergency funds. For this if you don't have debts is the best but if you do, then have to cut/trim somewhere to settle and $200 monthly for emergency fund is not sufficient but better than nothing. Since prioritize now to achieve the 3 years goal.
Step 8: Figure out the annual cash flow to fund these major milestone
May check the excel sheet below:
(1) Year 2019 for wedding need 14k to be funded by A - Savings of 1.5k/monthly from Oct to Dec 2018 salary + 2 months bonus less employee CPF
(2) Year 2020 for Baquet, honeymoon, reno and furniths need 65k to be funded by A balance and B (savings of 2 person in 2019)
(3) Year 2022 for baby delivery etc need 10k to be funded by G or H (savings of 2021 of 2 person).
Assumptions / Notes:
(1) All the above plan exclude any intereste earn from bank (just purely savings)
(2) As shared by Kyith also it exclude investment because the priorities here is to settle down now and later restart investment.
(3) Meanwhile, while savings for the 3 years, you can start putting monthly savings into DBS Multiplier A/C to earn high interest. Just both salary credit (3k+3k) + credit card spend of just $1, you'll get 1.9% p.a. credited monthly so it will compound more and faster to reach your goals!
4 more comments
Instead of pointing you to what others are doing, have you discuss with your partner on the
Type of life style both of you wanted together eg cafe or hawker food and entertainments
Type of home responsibility together eg. Who do what housework. I feel even as a guy even when we work outside, we shld help w the housework
Baby responsibility eg. Who take what shift to look after the baby. Nv let all the baby responsibility be the wife duty bcos is a family responsibility
There are more then the above 3 factors to plans for but with these 3 consideration you can set a budget or funds (amount) and types of protection which you can prepare for the coming 3yrs, the next few yrs with ppty purchase or when the baby join the family.
Hope my reply helps.
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Although insurance is my occupational hazard but let's put that aside for this discussion.
Below are some expenditures you should think about:
1) Renovation for the baby room
2) Cost to deliver a baby at the hospital
3) Visits to Gynae
4) clothes, stroller, cot
5) Milk powder (if necessary)
6) Pampers - can save by buying from Malaysia
In 3 years time, start to plan for the above costs today. Nowadays at 26, Singaporeans face debts from education, housing, car, wedding which all happens in a very short span of time. So the least you can ensure is having sufficient cashflow (:
Hope that helps!
The most important is to expect your life to not go according to plans... I am the more risk-adverse type so I believed in saving as much as possible, even if spreadsheet says 50% can liao, if have more i save more. Basically cut everything that can be cut. The biggest change is actually after the baby is born. The change I underwent was something I never imagined how I could have planned for. I suddenly didn't have any time for anything and everything, and my monthly savings fell below 50% no matter how I cut, so the only way was to change job to remain sane. If i could turn back time, I probably would have done a lot more things I had wanted to try before baby duties (like mba, learn a new language, learn to play music, work overseas) and not focused so much saving like a miser. 10 years later, I look back and think, ok I saved 500k, but I dont feel like spending it on anything. Taking mba or working overseas after kids is difficult because of the higher direct and indirect costs. Learning language or music after kids is doable but much tougher. I still don't have enough time for many things, dont have time to play games, read books, meet friends, so if value certain activities, fill your life with it because a little ball of flesh will rob you of all your time, for a good long time of your life.
05 Oct 2018
I have not been there and done that but I am in the same position as you.
Apart from the hard financial stuffs like setting goals, having a plan and managing cash flow, I feel that the soft aspect of financials is also very important.
One aspect is the mindset that both of you have towards money. Money should be an enabler to achieve the life that you want to live (a means to an end) and not the end goal. so it is important to be aligned on this so that there will be minimal conflict when deciding how to spend money on the household.
Another aspect is the type of your lifestyle (often link to money) that both of you expect in the future as a couple. It is important to talk about this matter because it sets the right expectation for both parties and the commitment towards the future.
Having talks on this 2 aspects can be done anytime and doesn’t have to be planned out haha like on a normal day nuaing around. It will be fun and exciting to talk about the future :)
hope my perspective helps!
Not done that but have thought if I were to settle down. Try to have enough cash for renovations, electronics and furniture. Don't take installments from e.g.courts. Its not worth it as they charge pretty high for installments if your calculate the full cost of it.
Insurance for both + future kid
cost of raising a kid
I havent gone through that yet, but I'd suggest you look into you and your spouse's insurance, as well as rainy day funds! Some insurance covers your kids for free until they are of a certain age (if i remember correctly).
Hi there, if you're saving your savings in the bank (Interest rates at 0.05% generally), i would recommend getting a savings plan or a long term investment plan to growth your wealth.
Savings plans are at generally at 3% interest and investment plans can have interest as high as 10% or higher (after deductions of all charges).
But you should be aware of the inflation rates figures (e.g: 6% inflation for poly fees yearly), the number of years to your retirement and the amount of money you need to save for your future plannings.
Currently i might have something that could help you achieve your goals as well as achieve your retirement needs.
If you're interested feel free to FB message me. I would be glad to share what i have with you and add value to you.
Disclaimer, i'm not an insurance agent.