Should I devote excess cash over my emergency funds (I’m thinking 1 year of base salary as cash in my bank account) in POEMS for short term goals? - Seedly
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PhillipCapital (POEMS)



Asked on 11 Jan 2020

Should I devote excess cash over my emergency funds (I’m thinking 1 year of base salary as cash in my bank account) in POEMS for short term goals?

I’m in a long-term and stable relationship with my boyfriend. We are not engaged yet but we do plan to get married in the near future. Should I set aside cash for wedding, reno, car etc (which I don’t even know how much will it cost) in my bank or should I invest them and liquidate them only when needed? I think its worth pointing out that we are both aiming for FIRE as well.


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Hi anon,

1 year of base expenses would be my benchmark for emergency funds, but there is no harm to have 1 year of base salary either.

Assuming you have your emergency funds set aside, you should aim to grow the rest of the monies, taking into account your time horizon and needs. Regardless of whether both of you are aiming for FIRE or not, do bear in mind that investments involve risk, so in the short-mid term (3 to 5 years), monies that are needed during this period should be placed in safer investments. FDs, SSBs, POEMS money market, and even short term endowments can be considered.

You wouldn't want to invest your monies only to see 20%-40% of the portfolio value wiped out right before the downpayment for the house renovations or the wedding.

Understand that time bound commitments will require a certain level of predictability for funding them (if you have to pay the wedding banquet, the hotel won't extend an extra year to you just because the market is down), whereas FIRE, which doesn't technically have a fixed time frame (if you FIRE a year later than you intened, it doesn't really hurt you).

For context, although I don't know what you have in mind for your wedding/reno/car, I can provide some context for the wedding costs (these are more common, if you wish to engage other vendors, then it depends, eg. an emcee):

  • Wedding banquet: Tables are anywhere from $1000 - $1800 depending on the hotel. Restaurants are cheaper. Multiply that by the number of tables

  • Photog: $1200 onwards

  • Video: $1500 onwards

  • Bridal package: $2000 onwards depending on package details, number of dresses, etc

  • MUA: $700 onwards

  • Wedding Bands: $1000 onwards

  • Don't forget the ang baos for the actual day! It can add up

Renovations can cost anywhere from $15K-$20K onwards. Home appliances will really depend, but actually you'd probably get by with a basic washing machine, dryer, fridge and TV, while slowly installing other stuff like home entertainment systems or robotic vaccum cleaners.

I don't own a car, so hard for me to comment there. Sorry. Try getting a second hand though, to get an idea of the costs, without a significant capital outlay required.​​​


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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:

As a general guideline, keep at most 6 months of your expenses in high liquidity channels as emergency funds (instead of basing it on salary).

Next, write down your goals and the age that your partner and you intend to achieve it. Furthermore, include the exact numbers that we are looking at to reach this reach. Once this is completed, work backwards to find out how much you need to save and grow your money in order to reach each goal. Without knowing the exact figures and your goals, there is no way to achieve it in the most efficient manner.

To create a budget, the best way to do this is via automation and this is how I do mine:

Being in similar situation as you currently, I invest with my goals in sight. Since investment yields only non-guaranteed returns, I am cautious on how I manage my investment portfolio to achieve my goals.

Additionally, I have started finanical planning for my family in the future. Personally, I find this more important than to focus only on the short term goals. This is because I can only foresee my expenses to rise in the short term - giving me enough expenses to stop saving and planning ahead.

Here is everything about me and what I do best.


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Question Poster

12 Jan 2020

Thanks! When u calculate ur total expenditure, do u include the money u give to ur parents monthly as well?
Pang Zhe Liang
Pang Zhe Liang

12 Jan 2020

Yes, in fact I treat it as a fixed expense.
Level 9. God of Wisdom
Updated on 12 Jan 2020

You will need your emergency funds for unexpected events; (touch wood) being retrenched, hospitalized etc. Also, investing is for the long term, if you seek capital gain quickly, it's the same as betting.

Set aside about 6 month's worth of expenditure, increase your monthly savings more than the common target of 50% (maybe 60-70%) since you got big ticket items coming up. Maximize cashback/miles card for rebates when you make purchases. Ensure your current bank accounts are giving you the best interest.​​​


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