Know your financial commitments: this includes any debt, daily expenses, savings for short term and long term and others
Plan out and have different accounts for different expenses/savings
Know the importance of investing and how to start investing effectively
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Firstly, I would urge you to keep investing in yourself, that means continuously learning. You are your biggest asset and it's you who will determine what kind of income you are making. That said, getting into better financial shape is a process and there are a few factors you might want to keep in mind.
Always set aside some savings. Whether you are making $2k or $7k, it's always wise to save some money for the rainy day. You don't know when you might need this emergency fund in the future. A good rule of thumb is to accumulate between 3 months to 12 months of your monthly income. A good way is to automate your savings so you won't even have to consciously think about it.
Know what kind of lifestyle you want. Different types of lifestyle determine how much you are going to spend. If you are someone who can go on economic rice everyday, then you will have more money to allocate to your hobbies. On the other hand, if you absolutely need to have a car to survive in Singapore, then you might find yourself stretching your finances.
Learn to budget. Sometime we might need to spend more to celebrate our best friend's birthday and we will have to exceed our budget. But it's okay, what this mean is that you will have to find some other expenses to cut back on. This will mean forgoing your favorite bubble tea for 2 weeks to stay within budget. With practice you will get better at budgeting.
Manage your risk. You may be young and feel invicible but don't get carried away as we will all grow old one day. The cost of medical treatment is rising and you might potentially wipe out all your savings. That's where insurance comes into play. Yes, insurance is an expense if you do not use it so learn about it so you know how to utilize it for your own advantage.
Incorporate CPF into your financial plans. Many don't consider CPF "real" money as it is an illiquid account where the government create a forced savings for you. However, CPF can be utilized in a way to help you reduce the cost of your insurance and housing.
The list is non-exhaustive. The earlier you start getting into good financial habits, the greater the control you have on your finances. In fact, getting a trusted financial advisor is a good way to avoid financial pitfalls that you may not be aware of. Good luck and enjoy your journey!
Start budgeting and recording your expenses. You can use the seedly app for this as it works well fo...
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