Now @ age 37 gross income $3800, age 30 gross income $2300, 2 child age 5 and age 1. Stay in 4 room hdb flat. Only have $10,000 cash saving, and monthly saving of $1000. What advice you have for us? ? - Seedly

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Asked by Anonymous

Asked on 27 Mar 2019

Now @ age 37 gross income $3800, age 30 gross income $2300, 2 child age 5 and age 1. Stay in 4 room hdb flat. Only have $10,000 cash saving, and monthly saving of $1000. What advice you have for us? ?

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Get yourself covered with insurance first.

Coverage in the event of death of about 15-20 X your income for both parents (this will also include the expected tuition fees for your children).

Coverage in the event of Critical Illness about 5 X of your income for both parents as well.

And upgrade both Medishield Life to Private Integrated Shield Plan.

You're saving 20% of your income right now. Good, but having just 10k in savings is too little. Make sure you bump that up to about 6 months of your combined income. So about 30k. Invest everything after this.

Then try saving 5% more, purely for your kids education. You might need more, but it doesn't matter, it's the max you should save, because you have to plan for your reitrement as well.

The 20% that you're saving, please make sure that after setting aside the emergency expense, the rest has to at least generate you 4-8% returns. If not, inflation is gonna kill you.

Start taking account your CPF monies, and all other resources you may have.

Make your CPF nominations wisely, especially now while your kids are still minors, if both parents were to pass away, they cannot handle the money directly. So follow this up with a will.

Plan for your retirement, where you going to live, how much you need per month, factor in other costs that will continue after you stop working, and what extra you might start incurring.

These are just basic overviews, there are still more that can be done. If you need help to do all the above, please speak to a financial advisor.

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Jackie

3w ago

Death insurance is so overrated. The multiplier doesn’t really help much. A decent CI coverage with sufficient protection is enough. Disability income is needed too. Other than that, cash liquidity of 10k is more than enough. The rest could be invested in safe assets like SSB or certain ETF. All could be done more without speaking to a FC.
Junus Eu
Junus Eu
Top Contributor

Top Contributor (Aug)

Level 8. Wizard
Answered 3w ago

Not really strict finance, but matters a whole lot ESPECIALLY given that your children are young. Take care of your health. This is especially so if you are the sole breadwinner - taking care of yourself is actually your responsibility to your children.

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You save abit more than 20% of your income which is not bad at all. Maybe start to look and research what you can invest in to grow your money after setting aside emergency fund. Of course if you can save even more, it will be even better.

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