What financial advice would you give to someone who’s currently going through National Service? - Seedly
 

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Asked by Anonymous

Asked on 18 Jun 2019

What financial advice would you give to someone who’s currently going through National Service?

Hello,

Currently in the first quarter of my National Service endeavour. My financial goal currently is to have a sufficient amount by the end of National Service (500 days to go), that’s sufficient for me to have in case of emergency purposes like family matters or health stuff.

However, I’d also like to have the privilege to sometimes spend on things on myself like clothings, food and other more but on a control per month.

I currently earn $735 monthly.

Add on: What’s the best bank to have?

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You got to define sufficient in your head. Its always better to have a number to work towards.

I came out of Army with an additional savings of about 10k and I think thats a very good amount to have as a goal.

An integrated shield plan with rider will help you to offset about 95% of your hospitalisation bills. You will want to get that, it will protect your money.

So how to get to 10k.

  1. Commit an amount to save every month. This should grow as your allowance increases. Just saving 400/month on average will give you 9.6k after 2 years.

  2. Avoid canteen (seriously, the food is nothing special but just an illusion created cause we are in-camp) stick to cookhouse food. Avoid ninja van when out too.

  3. Don’t go ra-ra over nights off. Many NSF will spend more during nights off, don’t. In fact if my nights off are 3 hours only, I don’t even bother to go out.

  4. As much as you can, do not cab to camp. Just stick to public transport. If you have to cab to camp, share with someone else.

  5. Sell your time for duty. I do that and earn a few hundred bucks extra in the month. I use the time in camp to do reading too. But of course, I will have a bit less of social life. So balance that out accordingly.

Basically, it’s just being aware of what you are spending on. Army is a great opportunity to learn side skills and save (especially if you are stay-in like me)

I will recommend that you use CIMB Fast saver for your savings. Hassle free.

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Clarence Chua
Clarence Chua

18 Jun 2019

While in army I don’t use a %, I simply aim to keep my spendings at 360 while I aim to save 400 a month I set aside 30 dollar for food per week (Sat and Sunday) which amounts to about 120 per month And I had 30 dollar set aside for my hospital plan monthly 40 for transport 100 for social (when required) Then 60 for handphone bills and miscellaneous Tbh, I don’t spend 360 on most month, I spend less than that. So any extra savings, I keep it for December where I know I will spend more.
Clarence Chua
Clarence Chua

18 Jun 2019

As a recruit my savings was around 150 only as Its not possible to save it all. The above is just the average illustration of my army time. As your allowance increase you can also get a regular endowment at a budget comfortable to yourself, as per me. This will be towards your long term savings.
Seh Xiong Chong
Seh Xiong Chong
Level 4. Prodigy
Answered on 18 Jun 2019

Cimb fast savers, no requirements, high interest or ssb

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Thaddeus Tan
Thaddeus Tan, Community Lead at Seedly
Level 6. Master
Updated on 19 Jun 2019

Hi Anon, firstly #ORDLOHHH HAHA sorry just had to. But anyway to answer your question. here's some advice! Try to save whenever you can save... If you are in camp week in week out, you get to save quite a bit on transport and food. Some people might think that since they are in camp from Mon-Fri, they have more money to spend on the weekends. NS is also the time when we start doing certain activities which might cause a hole in your wallet especially if you do it often if ykwim. Here's not to say that you should scrimp and save. I understand that there are definitely certain things we want to spend on. You should! It's your hard earned money! But before you do so, it would be good if you could sit down and have a good financial plan. You have a monthly pay of $735, it's not the most and so the more you need to have a plan. You could allocate a percentage to savings, some for Regular Savings Plans (RSP) investment to let your money grow, and leave some for spending. On certain months, when you have nothing to spend on, then you can save and use this money for your future wants down the road. The key here is that you got to plan your finances and be disciplined enough to carry it out throughout this period especially since you don't have much to work with. You should also be paying yourself first, rather than spend first, save later.

Another thing you can do is purchase concession for your EZ-LInk card. Like what Clarence mentioned, try to take public transport to camp instead of GRAB etc. as all of this adds up. It would be a bonus if your parents can fetch you to and from camp hahah

Grow your money if you can!

To grow your money, you can explore doing a monthly investment called RSP. Every month, you are allocating some money for investments. Though it's not alot, it's still something and when you start early, you are giving yourself more time for your money to compound. Isn't that a good thing? You can check out some platforms which allows you to start at a low sum. Some exmples of investment instruments include robo-advisors and local banks etc.

What's the best bank to have?

I used POSB's SAYE/SAYS as the i/r was quite good. By crediting a certain amount of money into the account monthly and by not touching it, you will get a 2% pa interest on the money in that account. For more info, you can check it out here. Make sure you don't touch the money, if not the higher-than-usual i/r won't apply!

Hope it helps!

2 comments

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Question Poster

18 Jun 2019

How much of my salary would you advise me to keep aside for savings and how much for spending expenditure? Also could you elaborate more on RSP if you don’t mind? I don’t like venturing into stuff I’m not very sure of just like investing.
Thaddeus Tan
Thaddeus Tan

19 Jun 2019

Hi anon, the general rule is to set aside 20% of your salary for savings. However, this is a general guide, how much you 'should' set aside really depends on 1. how much you are earning so that you can plan your financials most accurately and realistically 2. How disciplined and willing to save you are . 1. For e.g since you only have $735 monthly, it might be tough to set aside 20% of this amount as savings due to certain financial commitment you might already have. You may think that I'm contradicting myself by asking you to pay yourself first. Yes, you shld! But you got to be realistic at the same time. How are you going to save 20% if the remainder is not even enough for whatever financial commitments you have right, so in this case you can reconsider what percentage is suitable for your current monthly income. Point being: Adjust accordingly. You might need to reduce your percentage savings in order to be as realistic as possible. 2. Like I mentioned, 20% is a general guide. But sometimes you can even set aside more money. You could increase this percentage to say 25%, 30% and readjust your whole financial plan. I mean what's the downside if you were to save more right? By saving more, your money can grow more within a shorter period of time and it might seem insignificant but it adds up. Don't focus only on the short term, be patient and look towards the long term! For RSP... It stands for Regular Savings Plan. What it essentially does is that you set aside a certain sum of money monthly which will be used for investments. Why this is good is because rather than timing the market, you can reduce short-term volatility in the volatile equity market. By investing a fixed amount monthly through an RSP, you effectively buy more shares when the price per share is low and buy less shares when the price per share is high. To really find out and understand more about RSP which is a way to do DCA (dollar cost averaging), you can check it out these two links. https://blog.seedly.sg/regular-savings-plan-the-piggy-bank-for-working-adults/ and https://blog.seedly.sg/dollar-cost-averaging-vs-lump-sum-investing/ Hope this helps!
Tay WenHao
Tay WenHao
Level 6. Master
Updated on 18 Jun 2019

Hey i guess Clarence have covered most of the points and its damn good points and it works.

Just to add on, if you are drawing $700+, I believe you are a SCT or in high risk vocation? If you are an SCT congrats because your allowance will increase significantly after you pass out so make sure you do your best and get your 3SG rank so that you get more money.

As for how much you should save, i would suggest about $400/mth. Seems a bit hard but its possible if you follow what Clarence says and dont spend on unnecessary things. $300+ for you to spend per month means a rough $35-40/day for your weekend which is more than enough for food and transportation. Just dont go club. Or perhaps you can.

If you intend to go out for a drink once in a while (e.g. once a month) just cut down on your expenses for the other weekends and 'save up' for your club/pub.

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Question Poster

18 Jun 2019

I don’t club or drink so I guess that’s good. Don’t even smoke. Yes I’m an SCT currently, hence the salary. Thanks for the advice on how much to put aside, I’m not really good at giving myself a good gauge hence the question. I’ll experiment with it and se show it goes.
SK
Shabir Khan, Diploma in AMS at Temasek Polytechnic
Level 5. Genius
Answered on 18 Jun 2019

Hi,

Get POSB SAYE with BE YOUR OWN BOSS(BYOB), you can contribute any amount from $50 to $3000 every month, will auto-deduct from your main DBS/POSB Account. Dont touch the money for 2 years and you get 2% + Base Interest rate. Then to get the BYOB just use DBS Credit or DBS Debit card 5 times a month, to get extra 2% interest. So total 4%, as long you don’t touch the money for 2 years. Im currently awaity NS and plan to do this.

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Gabriel Tham
Gabriel Tham, Tag Team Member at Kenichi Tag Team
Level 9. God of Wisdom
Answered on 19 Jun 2019

Perhaps you can look into the POSB Save-as-you-serve account.

It is a savings account with safra tie in promotions, and higher interest rates.

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Sim Min Xuan
Sim Min Xuan
Level 3. Wonderkid
Updated on 22 Jun 2019

Hello there! you might want to set 40% of your income to go to a savings account to park it in there - make your money work for you and earn that sweet interest! i recommend CIMB fast saver as you get 1% interest rate with no strings attached. best of all, you can withdraw anytime with no worries so if there are any emergencies you can get the money ASAP.

as for the 60%, you can just spend the rest on whatever you want! however, i suggest you create a budget and follow it e.g : a monthly food budget of $150. this is to ensure you don’t overspend and also try to get you to spend lesser of the 60%, so you can dump the leftover money by the end of the month into your savings account thus increasing your savings! well for me, i feel that this is the time to start increasing your savings as you’re in NS for almost the whole week and thus will have lesser expenditures and more opportunities to save!

you don’t have to follow per say, work with the percentages and see what you’re comfortable with! of course, this is just my opinion and what i would do if i am in NS.

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Wilson Wilson
Wilson Wilson
Level 2. Rookie
Answered on 20 Jun 2019

Do not spend anything on alcohol and/or women who are not your family.

Spend on your education.

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