I'm a final year student with school fees of $38K but my father has paid for it first. Sadly, I only have about $1.5K in my savings now. What advice could you share with me that would really help? - Seedly
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Anonymous

Asked on 08 Nov 2018

I'm a final year student with school fees of $38K but my father has paid for it first. Sadly, I only have about $1.5K in my savings now. What advice could you share with me that would really help?

I'm conflicted as to what I should do better to manage my finances as a 24y/o. Right now, I try to spend less on unnecessary things and am freelancing to earn on top of my $500 allowance

I know it seems I'm in a terrible financial state and I'm pretty sure there are people like me too out there who are looking to change their lifestyle or habits to prepare for the future so any help would be greatly appreciated!

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Arpita Mukherjee
Arpita Mukherjee, Community Evangelist at Kristal.AI
Level 6. Master
Answered on 14 Nov 2019

Hi Anon,

It is okay that your father paid off the fees, may be once you have job, you start paying him back. After that maybe you can start investing your money in stocks or bonds. There are plenty of safe ways to invest your money and have it grow. You can go for REITs, other ETFs and bonds, but before you do that, I'd suggest you read up as much to understand what a Robo-advisor really does. Robo-advisory platforms assess your current financial position and recommend a portfolio strategy after reviewing your risk profile. These bionic advisors are still not very different from your ordinary financial advisors as both options will still have a management fee incurred for users. The difference lies with the amount, as Robo-advisors have lower management fees. And the best part is that they give you the most unbiased advice.

You can read here for a better understanding.

I work at Kristal.AI, and my mojo is to help people make the right financial decisions. If you think I helped you, do give me "Thumbs up". If you think my response was biased let me know, I will work on it.

I hope this helps you make the right decision.

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Yuantai Liu
Yuantai Liu, Chief Coach at Happy Coach
Level 4. Prodigy
Answered on 08 Jan 2020

Hi Anon,

Great question!

I offer you a framework of 3Ms to get you started:

  1. Mission

What is your life calling and mission?

While you are in your twenties and this might have not been solidified, it is time to think about what you want to achieve in your life.

How does being successful sound like to you?

How would it look and feel like?

  1. Mindset (and money)

We need the right mindset with respect to money.

People think that money is the root of evil. On the contrary, money merely magnifies what you want to do i.e. Your mission!

It is also important to have the right mindset in wealth accumulation.

Some things to bear in mind:

There is no shortcut to success.

Nothing worth it is ever easy.

We can't choose where we start from, but we can definitely choose where we end up.

  1. Mastery

While you are young, invest time and resources to build up mastery of the right skill sets, mindset and network.

Determine which skill sets you require to help you to achieve your mission.

Don't waste time on things that will not help you to build up mastery of skill sets.

If you have further questions, feel free to reach out to me by dropping me an email at [email protected], or through LinkedIn:

Www.linkedin.com/in/chiefhappyman

Wish you a happy and abundant 2020😁🎉

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Junus Eu
Junus Eu
Level 9. God of Wisdom
Answered on 07 Apr 2019

It's really nice of your father to pay for your school fees. If extrinsic goals motivate you, maybe make it a goal to repay your father that $38k within a timeframe that you have set yourself.

While you would be in a better position to save when you start working full-time! But meanwhile, it's already great that you are freelancing and looking to cut down on unnecessary spending :)

Earn More X Spend Less X Invest Wisely

Earn More: Given that you are currently studying (I assume full-time), this would probably need to wait until you have graduated and are generating a monthly income. Of course, you could decide to run a business as well, but that comes with its own risk/reward profile.

Spend Less: You are already cutting down on non-essentials, which is a great start! Everyone's definition of 'essential' is of course different, so perhaps you want to work on that target amount you want to save (or repay your dad), and work back on how much you need to earn Less spend each month.

Invest Wisely: Once you've amassed enough to pay for your own monthly expenses (instead of relying on a $500/month allowance), you can start looking at allocating some of your capital into investments. Many resources online that are free, start small and be informed.

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Jay Foo
Jay Foo
Level 2. Rookie
Answered on 08 Nov 2018

Let me give u my two cents as a person whom had started out that way just 4 years ago. Your current situation is perfectly fine. Everyone started out that way, and we all started with $0 or maybe a little more.

Based on what you have you are in a great financial position with no mounting student loans and other debts, and there can only be brighter outlooks in your life ahead. The fact that your school fees are paid off by your father and a $500 allowance, gives you more leverage to go ahead in life and sharpen your current set of skills to perform in future.

if you really want to plan ahead for your finances, what i suggest is you complete your current set of studies and finish that thesis or whatever you have. That gives you the skills to survive and earn your rewards from being productive at work.

Moreover, the basic skill of budgeting for your daily survival necessities are way more important than your wants in life at this moment. The rest are to be used for whatever emergency that you need. Your keep will come soon once you get that job after graduation. Freelancing is great; you get to experience and improve other skills that can otherwise help you in future.

It is good that you are already thinking ahead of your peers. However, you must remember that you are still a student, and your first and foremost job right now is to get good grades. To put it in a financial sense, you are earning knowledge to brand yourself and become more valuable.

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Julie Tan
Julie Tan
Level 3. Wonderkid
Answered on 08 Nov 2018

The bright side is that you are not in debt!

I think the first thing you have to start on is to learn to save. While its quite normal to lead a pretty carefree life while studying, saving is something important to learn to curb the output especially before you start working, or else the sudden newfound 'wealth' might lead to lifestyle inflation. Things might snowball from there.

I started by reading up on articles to save money (differentiating between wants and needs; looking at cost per use of items) + started with an expenses app. The beauty of the app is that you can categorise your expenses. At the end of the month/year, it generates a pie chart/percentages to give you an idea of what you have spent. This can help you see if you are spending disproportionately on certain items and also help with budgeting. From this, you can see how relatively small expenses add up.

Its good that you are working. Work and save to build up some capital before you look at other forms of income e.g. investments.

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Your situation not too bad. At least your father paid for you first so theres no need to worry about interest.

Start setting a budget and track your expenses. Once you get a job, start doing a fixed payment to your dad for the school fees. Make sure you save your money for future as well at least like 20% if possible. (if you can save more also good for your own sake) You can also use the savings to invest but do remember to read up before investing.

You can even automate the savings and payments so that everytime you get your salary, automatically put into a savings account and also pay your dad a fixed amount.

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Yen Peng
Yen Peng
Level 4. Prodigy
Updated on 26 Feb 2020

Hi Anon,

you are definitely not alone! don't fret that you have little savings, because you are currently freelancing to earn more so money will definitely come your way :) It's great that your father assisted to pay for the school fees first, as you don't need to shoulder the huge finanical responsibility of paying off bank loan + interest after you graduate. if it burdens you, talk to your father on a monthly instalment plan to slowly pay him back, hopefully you guys can arrive at a lower/no interest agreement!

Honestly, I don't think that you are in a terrible financial state because you are actively taking steps to ensure cash inflow, and that itself is very commendable and responsible. In terms of lifestyle and habits, I would suggest you explore expenditure-tracking apps, or use Seedly app to retain an overview of your assets across the banks! This will make sure you know where your money went, and what you have, to better curb excessive spending and consciously plan your spending/saving strategies along the way :) remember wealth accumulation doesn't happen overnight, but if you are consistent in saving/planning, you are on the right path!​​​

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MT2020
MT2020
Level 7. Grand Master
Answered on 26 Feb 2020

If only have 1.5k in savings, i would not recommend you to invest in anything. This is because you may never knw but u will need the 1.5k anytime and you wouldnt wan to put in a stock market which may not give positive return in the short term.

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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-personal-cash-flow/

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-budget/

By enforcing discipline and to focus on your goals, you will be able to overcome the situation. Remember, this is only temporary. Where the willingless is great, the difficulties cannot be great.

Here is everything about me and what I do best.

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Ming Sheng
Ming Sheng, Healthcare Services at NUS
Level 3. Wonderkid
Answered on 09 Dec 2019

Find like minded friends who are keen on saving up their money/improving their cashflow. Try to hang out with them more, and hang out with people who spend a lot, less.

its been a year, hope things are looking brighter one year on (:

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Gabriel
Gabriel
Level 8. Wizard
Answered on 10 Nov 2018

It's good that your father could pay for your school fees first so that you didn't have to take up a study loan which would incur interest. As others have mentioned, focus on completing and excelling in your final year first before focusing on earning money. After you graduate and find a job, do your budgeting and you can discuss with your dad regarding a repayment plan where you can pay him a little every month.

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Just keep up the hustle man.

We all start somewhere and usually with $0.

Focus on doing well for school, and find the best opportunity possible right after you graduate.

In fact, I would recommend you to even spend some money to learn a trade skill. Something someone would pay decently for.

Skills are way more important than the class of honours you graduate with.

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