It just hit me – that I am 22, that I am graduating, that I am going to be jobless, that I am going to be needing a house, car, life, that I am going to be an adult. Crap is tough.
Then comes all the worries. Will I be able to find a job, have enough to be financially independent, achieve my goals of being successful, take the first step into adulthood. Which is how this blog came about.
Words in a picture, it probably looks somewhat like that! [Me in Finland, check out my student exchange experiences to get more pretty pictures of Europe!]
Snow aside, I am indeed starting to feel lost. I will be graduating in May 2017 and I’ve got a whole bunch of things I want to do, whole bunch of places I want to go and I don’t want to focus on having to live day in day out on my paycheck. Being in Singapore, financial independence is probably a necessity for a enjoyable adulthood. With that in mind, I am going to try to list down my life’s financial milestones in this post.
The very first step would be finding out what you want to achieve 20-30 years down the road. And I don’t mean vague aims such as “I want a car”, “I want to travel as and when I like”, “retire by 40!”. Nope, I mean quantifiable aims. Instead of “I want a car by 27”, go “How much money do I need by 27 to buy <some range of cars>” to quantify your aim.
In my case, there are a few things I have considered which you could think about:
Short-Term: [22 – 25]
- Start working full time in June 2017 with a starting salary of $3,500 before CPF etc. [*cross fingers*]
- Secondary monthly income of $800-$1,000 from Tutoring
- Additional monthly income from entrepreneurship of $1,000 by 25
- $10,000 stash for investment & trading at 25
- $30,000 by 24 stashed aside for a housing down payment
- $30,000 in Savings at 25
- Being able to travel at least twice a year after securing a stable job + down payment
Long-Term: [25 on]
- Obtaining a car at 28/29.
- Total debt from big-ticket items of at most $1,000 [halved with (hopefully) spouse] & cleared by 40
- Build up to a passive income of $3,000 by 30
- Semi-retire at 40 with spending rate of $3000-$5000 per month, excluding travel expenses
I am guessing this list will change every few years, but as a start, something like that should suffice.
Now, there are many ways to achieve your expected amount – savings, investing, increasing your income, having different accounts for different purposes etc. Since, I have yet to began working, my current focus would be looking at high-yield savings accounts and multiple income sources. Once I have secured a job & know how much I will be paid will I then be able to re-evaluate my plans.
As of now, I have 2 sources of income: [& nope, I do not get money from my parents]
- Tutoring (~$1000) a month
- Entrepreneurship ($0) [* but no outflow as well, so it’s all good]
With a average monthly expenditure of $400-$500. That’s a good amount of money to save every month.
I currently keep my savings in an OCBC Frank account which has an interest rates (0.2% for up to $10,000 & 0.3% up to $100,000) payout more than an average saving account for young individuals under 26, with no annual fee or minimum amount. This makes it suitable for a transition account. Research is currently underway on which accounts to consider once I have secured a full-time job so look out for that post as well.
However, since almost all of my current savings will be spent on my graduation trips and most were already wiped out for my exchange. Let’s assume I will be starting with little to no savings.
Lastly, before I conclude my financial goals post, I should clarify that I have not taken debt into account in my goals as I (thankfully) do not have any, thanks to my parent’s frugal saving since I was young. I do admit that I have been privileged. If there are any debts, one should always work to clear off these debts first before focusing on achieving your financial goals since these only work when you are debt-free.It’s never too late to start!