This year, you may have cleared significant milestones like graduating from university and entering the world of young professionals. If you’re within the first few years of being part of Singapore’s growing workforce, you may have already learned how to put your skills and knowledge into action and how to build your livelihood off of them.
But the earliest stages of your career will often seem like the hardest ones, especially in terms of finances. Though you may not have the savings or the spending power of more seasoned professionals, you have the added challenge of being prudent with your finances and avoiding money problems like overspending and falling into debt.
As a young professional starting your career in Singapore, this is the best time to exercise discipline over your finances and to practisesaving money early. With more of your savings tucked away, you’ll be closer to achieving financial independence and other dreams that may come with it.
In that vein, here are some practical tips for managing your hard-earned funds and building a solid financial foundation for the rest of your career:
Identify Your Expenses and Create a Budget
Before you even start saving, you’ll need to take stock of youressential expenses. This typically includes items like rent, transportation, food, telecommunications, and utilities.
Based on these categories, create a personal budget that will act as your financial road map and guide you on how to allocate your income. Once you’ve established your budget, it will be easier to control your spending and prioritise saving up for your goals.
It would also be good for you to identify areas where you can save. For example, when it comes to mobile plans and data packages, consider all your options. It would be wise to do an exhaustive mobile plan comparison Singapore professionals also do and find out which one offers the best deals for your current budget.
Reduce Your Living Expenses
Although a large portion of your income will be directed towardspaying for your living expenses, there are several things you can do to reduce these so that you still have money left for your savings. In the case of your housing or rent, consider alternative housing options like co-living spaces or shared accommodations, which can help lower living costs. In addition, you may want to see if you’re eligible for government housing options, such as flats by the Housing and Development Board, which provide affordable rental rates.
Singapore’s efficient public transport system makes it easy to get around the city-state without owning a car. Compared to other cities around Asia, it’s not as hard to spend wisely on transport options that will comfortably get you from home to work and vice versa. But you can save even more money by walking or cycling for shorter distances, which will also allow you to get some healthyexercise in.
If you eat out regularly, the expenses can quickly add up and affect your budget. That said, it’s best to do most of your cooking at home and prepare meals for work. But this doesn’t mean you have to avoid dining out altogether; you just need to be more consciousabout choosing the most affordable options as often as you can. Fortunately, those are plentiful in SG, including the delicious food choices in hawker centres and food courts that won’t break the bank.
Define Your Savings Goals
The further along you are in your career, the closer you’ll be to meeting particular financial goals. As a young professional, it’s good to define these goals early to give purpose to your savings efforts.
Whether it’s buying a home, travelling around the world, or building your own investment portfolio, clear objectives will serve as milestones to work towards. They can also help curb reckless spending, as you may be less likely to spend money idly if you know how much you need to set aside for your dreams.
You’ll also want to identify which of your goals can be achieved within a year or two, and which ones will require several years’ worth or more of your savings. Look back at these objectives and use them as the basis for a comprehensive savings strategy for the earliest years of your career.
Choose the Right Channels for Your Savings
Once you have a clear idea of what you’re saving for and how to best reduce your expenses, it will be time to choose a method for handling your savings. If you don’t already have one, open a savings account in Singapore where you can safely keep your extra money.
While a traditional savings account is definitely a reliable option, it often offers minimal rates. That said, if it’s within reach for you to do so, consider looking into high-yield savings accounts from online banks or digital financial institutions. That way, you’ll earn better returns and higher savings on the amount of money you put aside.
Additionally, consider actively using the Central Provident Fund (CPF) for your retirement savings. As a working Singaporean, you’ll make monthly contributions to your CPF courtesy of your employer, which can cover your basic living expenses upon reaching retirement age. Consult your employer about yourcontributions and consider making cash top-ups to your CPF when you can so that you’ll worry less about your financial future.
Explore Side Hustles and Additional Income Streams
Lastly, if you’re in a good place to do so, consider increasing your savings by taking on freelance or part-time work. Look for opportunities that are aligned with your skills and interests so that the learning curve is shorter.
For example, if you have an eye for photography, check out freelancing platforms and communities that may need such a service. You can also monetise your hobbies or talents, like graphic design, writing, or a flair for languages. Every extra dollar you earn will go a long way in helping you fulfil your financial aspirations.
Saving money as a young professional will pave the way for a moresecure financial future as your career ripens. By adopting the smart financial practices listed above, you’ll be able to lay out your foundation for financial success.
At the same time, remember to be patient in your savings journey. Things may not always go according to plan, and you may have to spend for occasions you can’t always predict. What’s important is that you do your best to honour your financial goals and that you build financial discipline, which will serve you at all points of your career.
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