What is the best way a family (with household income of $10k, 3 young children and 1 helper) can save and invest? We currently have a car - is it a wise choice? - Seedly

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Asked by Anonymous

Asked 2w ago

What is the best way a family (with household income of $10k, 3 young children and 1 helper) can save and invest? We currently have a car - is it a wise choice?

What is the best savings account to use? And what is the best way to invest passively in low amounts? Our kids have some savings. Which kids savings plan gives us the best interest? Can we invest their savings safely - where?

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Marcus Teo
Marcus Teo
Level 2. Rookie
Updated 2w ago

Your first step is segregating out how much your finances - 1) 6 month emergency savings funds 2) Spare cash to invest in a recession 3) Amount you can invest. Once you have figured out how much you can invest, you can then decide on what to invest in. For beginners, I strongly suggest you choose index ETFs like STI or S&P 500. US Index returns have averaged 7-8% annually.

This can be automated by investing every month using robo-investors. However, never ever sell your holding, but continue to buy every month. When the recession strikes, pull out your recession funds to utilize it. I may not be able to explain everything here. But feel free to check out my article about it. https://onceamillenium.com/how-to-invest-with-the-right-mindset/

For your car, it becomes an asset when you rent it out, but a liability to continue using it. At the end of the day, it is your own preference!

Cheers,

Marcus

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Hi. My friend has similar situation as yours, I'll share some of their ways to save $ for your consideration:

1) I'll start with the most straightforward one , children savings: https://blog.seedly.sg/best-posb-ocbc-uob-savings-account-cda-kids-baby-bonus/

To save more , either increase income or decrease expenses or both. If you can increase either one of your income and control spending, it would be the best way. Otherwise , on expenses savings, suggest below:

2) Car - A liabilities rather than assets. Understood that families with young kids with a car really comes in handy. Suggest you do a total annual cost for car , including insurance, maintenance, servicing, petrol , possible cost of repair in 5 to 10 years time (possible change of gearbox if any). These contribute to a lot of cost.

Solution: Sell current and start renting by signing not so new MPV for 2 to 3 year Contract, quite a few at SinMing area. My friend calculated cost for rent is cheaper than owning the car. It helps save some.

3) Domestic helper: Continue but start training and getting the kids to do housework. Once they reach 7 and above, the whole family can share household chores and share load together and reduce the salary and extra cost for having a domestic helper. This not only helps family bonding and teaches the kids to be independent, good life skill when they go overseas to Study, to be someone wife or hsuband and learn to be discipline and appreciative.

4) Invest passively in low amount: There's many options of robo advisor allows regular low amount investing. Go to Seedly website blog area to find out more.

P/S: On tax planning side, your wife tax will be covered by WMCR and yourself using PTR. If you have run out of PTR of the 3 kids to reduce tax, you can opt for top up CPF SA (7K per year and earns 5-7% interest) or top up SRS account and channel it to a lot of available investment or Robo Advisor and withdraw at retirement age onwards, with a certain strategy).

Important: If you wish to use SRS options , do open a SRS account with 1 of the 3 local bank with $1 now before Sept as after that garmen will increase retirement age from 62 to higher age ( means you can only withdraw without penalties after the higher retirement age).

Above for your considerations, may it helps 😃👌🏻

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