Meaningful financial planning begins with understanding your goals
Minister Gan Siow Huang shares her views on the importance of financial planning and the role of the Central Provident Fund in saving for the future.
For many youths, the concept of financial planning is abstract and confusing. It is a nagging sentiment of finding a balance between spending and saving.
As young adults fresh into the world of adulting, how important is financial planning and how can one better manage their finances for both the present and future?
In his sixth episode of #AskNOW host Joel Lim invites Minister of State for Manpower and Education Gan Siow Huang to discuss financial planning for Singaporeans youths.
The #AskNOW series is organised by Gushcloud Entertainment and Now Academy Singapore in partnership with the National Youth Council.

What is financial planning
When asked about how one should first begin to understand their financial situation, Mdm Gan explained: “The financial situation is a function of what the person deems to be an amount needed to sustain their lifestyle and meet their long and short-term goals.
“The person ought to look at the current reality and if there is a big gap to where the person wants to be and work out a plan to reach their goals.”
For young adults who are just starting to plan their finances, Mdm Gan suggested to first begin by thinking about their goals. These goals are usually long-term and planned 20 to 30 years ahead.
Sharing her own experience of planning her goals, Mdm Gan shared some examples that included her role as a parent, taking care of her elderly parents and parents-in-law as well as planning for her retirement in the future.
She also advised viewers to assess what they currently have when planning their finances.
“You have to put together your sources of wealth and determine what the gap is. [For example], how much do you save per month in order to meet your long-term goals,” she said.
This can include fixed assets such as housing, non-fixed assets such as cash savings or investments and their current earnings.
However, clarifying such goals is one of the most difficult parts of financial planning as it is hard to determine what makes an individual happy and what does money mean to an individual with differing needs, Mdm Gan said.
On clarifying one’s goals, Mdm Gan encouraged viewers to seek financial planners or use tools from MoneySense to assess their financial health.
The importance of Central Provident Fund
Financial planning is a universal concept that is familiar to all but there is a uniquely Singaporean tool available among us – The Central Provident Fund (CPF).
In her sharing, Mdm Gan explained the fundamentals of CPF as a tool for retirement to ensure that Singaporeans have a steady stream of money to withdraw from when they reach 65-years-old.
CPF contributions are derived from 20 per cent of the employee’s salary and 17 per cent worth of an employee’s salary from the employer. Contributions are also made from the Government through compounded interest rates.

These contributions will go into three main CPF accounts: Ordinary account for housing, education or investments, Medisave account for healthcare expenses and the Special account for future retirement.
For more information, Mdm Gan recommended viewers to check the CPF website for more resources.
Ensuring continued savings for the future
Saving for the future depends on how one would define “living comfortably” and if they have any other financial commitments. This varies from their plans for housing to whether an individual is employed or has a steady source of income, said Mdm Gan.
For self-employed individuals, the CPF concept works differently with the absence of regular employer and employee salary contributions.
Mdm Gan emphasised the importance of discipline among self-employed individuals to contribute consistently towards their CPF in order to benefit from “the power of compounding interest”.
Besides regular CPF contributions, Mdm Gan also highlighted the benefits of upskilling and education.
“[Upskilling allows you] to stay employable and have a steady stream of income because you have the skills to command a job or salary. [This is] something that young people can do for themselves,” she said.
Sharing her personal experience working in the Singapore Air Force, Mdm Gan said her employers had taken an active role in upskilling her through training and skills development.
However, she noted that this might not be the case for some companies and encouraged the viewers to keep track of the relevant updates or skills they would have to acquire and seek professional courses made available within their sector.
“How to upgrade yourself depends on which industry you are in, what you are interested in and how do you see yourself advancing in your career,” she added.
Mdm Gan suggested various methods of upskilling such as seeking trade-specific resources from unions, utilising SkillsFuture and attending Continuing Education and Training (CET) courses from the different institutes of higher learning.
Advice for viewers
Host Joel Lim shared his personal concerns as a young adult facing the struggles of finding a “happy middle” between embracing new experiences that cost money and saving for his future.
In response, Mdm Gan remarked candidly that the saying of “the more you save the better” is different for every individual because the purpose of saving money depends on what someone deems important for their future.
“There are those who draw their main source of happiness from the amount of money they have accumulated and wealth grown… But for other people, having more money does not make you necessarily happier.
“It depends on how you define happiness which determines how much you have to save,” she said.
Mdm Gan also offered some suggestions of useful platforms for the viewers to follow, namely: Institute for Financial Literacy, MoneyOwl, TheWokeSalaryMan and Money Smart.
At the end of the livestream, Mdm Gan shared a quote by Viktor Frankl: “He who has a why to live for can bear almost any how”.
Concluding her sharing with some food for thought, Mdm Gan said: “Financial planning is only meaningful if you know what you are doing it for. It is about the why. Why do you want to save money and why do you want to go into financial planning?”
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