Budgeting Basics for Singaporean and Malaysian Millennials
Published on 31 Jul, Kimberly Francisco
Budgeting as a millennial in 2020 isn’t the same as it was ten years ago. With e-commerce changing the way we shop and the rise of digital subscriptions, we need to adjust the way we budget in order to keep up with the times.
Learning how to budget helps you to understand how much money you really have, what you are spending it on and how to better allocate those funds for the future. This gives you greater insight into how you can manage your money and create healthy spending habits that allow you to survive, even through the toughest of (financial) storms.
Forget those pesky financial planners, and learn to do it yourself! All you need is this practical guide on budgeting basics that can help you on your way to becoming your own financial guru.
Know your money
Before you begin, you need to get an idea of what you have and what you have been spending on.
Gather previous bank e-statements, bills, receipts and any other expenses you have and create a spreadsheet. Calculate the monthly average and note down all recurring bills and payments, including digital subscriptions to stuff such as Netflix, Spotify or Amazon.
Compare this with your monthly income – are you spending more or less each month? You might be surprised by your findings.
Have financial goals
Once you have a more accurate overview of your money, start writing down your financial goals. Divide them into short-term and long-term ones.
Short-term goals are more immediate expenses that can span over a few months or years, while long-term goals go further in the future and include big-ticket items like retirement, housing mortgage and your children’s education.
Prioritize and work them around your usual expenses, placing immediate needs, emergency and retirement funds above more leisure goals like travelling.
- Short-term goal examples: Emergency funds, rent, insurance, student loans, travel, wedding
- Long-term goal examples: Retirement, housing, children’s education
50-20-30 or half-half
Break down your expenses into three categories – needs, wants and savings. Depending on your income, choose between two methods of budgeting – the 50-20-30 method or the half-half method.
- 50-20-30: Allocate 50% of your income to needs, 30% to your wants and 20% to savings
- Half-half: Combine your needs and wants and allocate 50% of your income to it, and save the other 50%
Credit your salary
Maximize the interest rate in your bank account when you credit your salary in. Find an account that gives you the best interest rate and matches your income and budget. (Pro tip: Check out these bank accounts if you’re Singaporean, or these if you’re Malaysian).
Automate payments
Have recurring monthly bills? Choose to pay them through GIRO, so you won’t incur late charges. Have a separate account for your savings and arrange for an automatic transfer every month. This helps you not to spend all your cash before the end of the month.
Budgeting Basics for Singaporean and Malaysian Millennials
Published on 31 Jul, Kimberly Francisco
Budgeting as a millennial in 2020 isn’t the same as it was ten years ago. With e-commerce changing the way we shop and the rise of digital subscriptions, we need to adjust the way we budget in order to keep up with the times.
Learning how to budget helps you to understand how much money you really have, what you are spending it on and how to better allocate those funds for the future. This gives you greater insight into how you can manage your money and create healthy spending habits that allow you to survive, even through the toughest of (financial) storms.
Forget those pesky financial planners, and learn to do it yourself! All you need is this practical guide on budgeting basics that can help you on your way to becoming your own financial guru.
Know your money
Before you begin, you need to get an idea of what you have and what you have been spending on.
Gather previous bank e-statements, bills, receipts and any other expenses you have and create a spreadsheet. Calculate the monthly average and note down all recurring bills and payments, including digital subscriptions to stuff such as Netflix, Spotify or Amazon.
Compare this with your monthly income – are you spending more or less each month? You might be surprised by your findings.
Have financial goals
Once you have a more accurate overview of your money, start writing down your financial goals. Divide them into short-term and long-term ones.
Short-term goals are more immediate expenses that can span over a few months or years, while long-term goals go further in the future and include big-ticket items like retirement, housing mortgage and your children’s education.
Prioritize and work them around your usual expenses, placing immediate needs, emergency and retirement funds above more leisure goals like travelling.
- Short-term goal examples: Emergency funds, rent, insurance, student loans, travel, wedding
- Long-term goal examples: Retirement, housing, children’s education
50-20-30 or half-half
Break down your expenses into three categories – needs, wants and savings. Depending on your income, choose between two methods of budgeting – the 50-20-30 method or the half-half method.
- 50-20-30: Allocate 50% of your income to needs, 30% to your wants and 20% to savings
- Half-half: Combine your needs and wants and allocate 50% of your income to it, and save the other 50%
Credit your salary
Maximize the interest rate in your bank account when you credit your salary in. Find an account that gives you the best interest rate and matches your income and budget. (Pro tip: Check out these bank accounts if you’re Singaporean, or these if you’re Malaysian).
Automate payments
Have recurring monthly bills? Choose to pay them through GIRO, so you won’t incur late charges. Have a separate account for your savings and arrange for an automatic transfer every month. This helps you not to spend all your cash before the end of the month.
