Financial planning is more than just about saving money.
If you were to ask me what I knew about managing my finances, I would probably only be able explain how I divide my monthly allowance.
So far, I have little to no knowledge on insurance planning, Central Provident Fund (CPF) contributions, or planning for the future.
Yet, as I now enter my 20s as a broke poly graduate, managing my finances has become a topic of importance especially with my added responsibilities and further education plans.
So when I was given the chance to attend Seedly Personal Finance Festival 2021 on Saturday (Apr 10), I jumped at the idea and attended the festival with a keen eye to learn more.
Organised by Seedly, the virtual festival featured more than 40 experts in the personal finance industry including speakers from The Woke Salaryman, 99.co, DollarsAndSense and more.
Here are five things I learnt about managing my finances over the weekend.
If you’ve always felt guilty spending money and caving in to your temptations, perhaps it is time to relook at how you can spend your money more freely and smartly.
Presented by Seedly product manager Huang Yixuan, the workshop on how to save money shifted the focus on spending, rather than saving, when taking control of your finances.
The first step towards guilt-free spending begins with understanding your “big life goals” and how much it will cost. This can help you decide how much should be saved each month before setting aside an amount solely to be spent.
The next step involves spending smartly and learning how you can earn rewards while doing so. While you can’t find the perfect credit card, Yixuan encouraged the audience to choose a card that offers the best reward types and interest rates instead to cater to their spending habits.
The last step on spending meaningfully begins with a simple question: What do I want to spend my money on? This can be answered using the Priority Bucket Method, which encourages users to sort their spending items based on their priority – high, mid and low.
By identifying such priorities, this ensures that money is spent intentionally and saved where necessary. As someone who gave little thought on how to plan my money, this workshop showed me the more strategic ways of saving that involved both my life goals and future plans.
I realised that saving does not always mean a compromise, as long as a good balance is set between spending and saving for my goals.
One of the reasons why I tuned into this keynote address was because of its very attractive title: Become a Multi-Millionaire Using CPF.
Is this possible? Yes, as testified by speaker Loo Cheng Chuan, founder of the 1M65 Movement.
According to Mr Loo, one way to achieve this is to first leverage on the power of compound interest – or as it is also known as the “Eighth Wonder of the World”.
In his sharing, Mr Loo explained his personal formula that he shares with his wife to create a financial safety net for their family.
The formula involves investing at least $130,000 into their Special account and Medisave account combined to let it compound over 35 years until they retire.
While the speed of growth in savings might start out slow, Mr Loo explained that this will increase overtime when left to the power of compound interest.
Having attended this segment, one of my greatest takeaways from Mr Loo is on the importance of starting early when planning my finances.
Rather than just relying on an income, Mr Loo’s personal experience highlights the worthwhile effort of early planning and engaging other resources to help grow our money.
Just like how the power of compounding will only yield its results after several years, perhaps it is also time that I start taking charge of my finances and investing in my own future.
Charting the right career path might seem confusing in our youth. But as Felicia, Master Licensee and Master Coach at Engage & Grow Singapore would recommend, you need to have a destination that excites you when on this journey in life.
In her workshop on finding the right career direction, Felicia shares her three winning mindsets on career planning: Staying above the line, working harder on yourself and having clarity on your strengths and passion.
Rather than blaming a difficult situation, the first mindset focuses on staying above the line. The ‘line’ includes three main values – ownership, accountability and responsibility – to help an individual rise up to the occasion when in need.
The second focuses on working harder on yourself than you do on the job.
“When you invest in yourself, your learning and growth, it will stay with you and equip you for the rest of your life,” Felicia said, as she advised the audience to first decide their passion before taking actionable steps to improve themselves.
The last mindset focuses on identifying your strengths and passion using the Skill Fun matrix where tasks that are not enjoyable nor within your skill set should be avoided as it will only drain your energy.
In contrast, if a task is enjoyable and an individual is keen to learn more despite their inadequacies, Felicia encouraged the audience to then focus their energy on learning and growing themselves in this area instead.
As a youth who will be entering the workforce in a few years, the workshop has given me a better understanding on how I can work towards a sustainable career path to help reach my desired goals in life.
While these baby steps might seem small, I believe that it can help me reach a level of success that will involve not just my monetary needs but also a state of content towards my career choice.
We’ve heard the constant nagging to get your insurance early, but what exactly is insurance?
As explained by Christopher Tan, chief executive of Providend Ltd, insurance plays a role in financial planning when an income stream is lost due to retirement, death or disability.
It ensures that the affected income stream is replaced for your family’s life to continue normally but it is “never about investment or saving but rather primarily on protection.”
In his segment on insurance for young adults, Mr Tan also explained that the duration and type of insurance coverage needed depends on various factors.
This includes your retirement plan, liabilities, healthcare expectations and when your dependants, such as children, become independent.
On the role of insurance in financial planning, he said: “Insurance in your financial plan is not the main cast. Insurance is the supporting actor. The main actor is your accumulation plan [which we all start with in order to live].
“First start by deciding your life goals and how much you need and how much resources as you earn your income today that you should set aside to save and accumulate to your life goals.”
While the process of insurance planning might seem daunting with the amount of consideration and calculation to be made, it is one that I have since learnt to see as worthwhile for the well-being of my loved ones future.
I decided to tune in to a panel discussion on planning for the long-term as a couple out of curiosity, despite the fact that I was single.
The segment was attended by Diora Henson, general manager of theAsianparent; Dawn, editor at SG BudgetBabe; Kelvin Ang, founder of CheekieMonkies and moderated by Clara Ng, community manager at Seedly.
The discussion began with a question on how couples should manage their differences in financial personalities, of which the speakers agreed that open communication between partners is an important factor.
Sharing about her personal experience as a spendthrift in contrast to her partner who is a saver, Diora spoke about the importance for couples to communicate openly on the various needs and wants of a family.
This can be in the form of setting a budget to spend on the family and another specifically on yourself – which is a method Kelvin shared when managing his finances between himself and his wife, who are both savers.
While some couples hold joint accounts and others separate them for different purposes, the speakers also encouraged couples to be open to “trial and error” when deciding how to manage their finances.
Having only had to care for my own finances so far, I found the segment interesting in learning how two people can come together to manage their finances effectively.
From becoming a couple to starting a family, establishing a financial plan together is one that will change constantly with the added responsibilities and liabilities shared within the household.
After all, as quoted from Diora, you start and end as a couple, and it is important that there is trust and mutual respect when on this shared financial journey together.
Overall, I enjoyed my time at Seedly Personal Finance Festival 2021. I realised that it is never too early to start saving money because my financial decisions now can impact the future of my loved ones and myself.
With a better understanding on what I can do to manage my money, I am looking forward to taking charge of my own financial future!
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