facebookIs it bad if my boyfriend does not have any cash savings? - Seedly

Anonymous

17 May 2019

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Saving Hacks

Is it bad if my boyfriend does not have any cash savings?

My 24 year old boyfriend has less than 3k in cash, lives from pay check to pay check. However, he has insurance worth about 20k in endowment plans. He has no plan to withdraw the $ after the premium has been fully paid. His mum constantly asks him for $. Im concerned if this would be an issue if we were to get married. Please advise. Thank you.

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Nicholes Wong

17 May 2019

Diploma in Business Management at Nanyang Polytechnic

Yes its bad because if an emergency were to happen, he will most likely not have enough money and might have to borrow from family and friends or even banks. That being said he is not that old so he still have time to save up. If he have to take care of his family which lead to unable to save any money, then he just need some time to adjust and increase his income as he continues to work. But if he is unable to save money because he is splurging too much on his wants then u might have to sit down and talk to him to discuss about the future plan and goals. It is better to talk now and resolve it together than waiting until you get married and potentially quarrel with him because of money.

Hello there!

Every individual's personal finance situation is different so there is hardly a right or wrong answer, but whether the circumstances are acceptable to you at this stage of your life if you are considering to settle down with him.

I think there are a few other things that you should take into consideration:

1) Will his earning power increase?

  • At 24 years old, i'd imagine if he is a PMET / working professional, his earning power should improve over time. If he is proactively upskilling himself and performing well in his work, these are great telltale signs that his earning power will increase, after which his savings rate will definitely increase.

  • Bad sign = if he is not motivated in life and has no concrete plans as the years pass by.

  • It is not uncommon to hear someone at age 24-25 (within first 2-3 years of graduation) to not have any savings, and then start saving up substantially after the second job or when he realizes that he needs to plan for the future. This awakening is part of the adulting process.

  • Adulting also means - giving up short term discomfort (cook during the weekend instead of restaurants or bars) for long term wealth.

2) Does he have any bad money habits?

  • "living pay check to pay check" implies that he might have high monthly expenses. It probably will be a good time to talk to him and examine these monthly expenses. the "problem" will be better if these expenses are variable expenses (food, cab) which can be cut down.

  • If he is spending what he earns / more than he earns, he should probably reflect internally and see if this is sustainable.

  • If the monthly expenses are for fixed expenses (insurance, rental, bill payments), it could mean that he has many commitments that he has to be responsible for - can see down together to see what is absolutely necessary and what is not)

There are too many facade to this question but i think if he is willing to relook into his personal finance and take ownership of it, proactively upskilling himself for potential increase in earning pwoer, willing to not spend unnecessarily, actively reduce liabilities, I think it's ok to not have much savings at the age of 24.

He probably still have about 4-5 years to save up for his first few milestones in life (marriage / hdb) - which is quite manageble. If both of you save 1k a month now for 4-5 years, you can save up quite a bit!

For additional context, at age 24, i have less than 3k in savings, living pay check to pay check (first job paid me 2.2k) and have student loans to pay off!

Hope this helps and hopefully, love conquers all!

Ps - not a financial advisor + just another guy with less than 3k in his bank account at age 24

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