What 30-something Singaporeans fear most about their finances
When you started working in your early 20s, having money allowed you to enjoy your life –you can buy things that you want and spend on life-enhancing experiences.
Things get a little different once you reach your 30s. This is when you probably take on bigger commitments like buying a home, starting a family and saving up for your retirement. If you are afraid of whether your finances are in check, you are not alone. Here are the 5 most common financial fears 30-something Singaporeans have and what you can do to overcome them by planning early and getting the right financial plans.
1. Am I earning enough?
The government recently reported that the median monthly household income grew by 2.1% from $8,666 in 2015 to $8,846 in 2016. But with the rising cost of living in Singapore, your income never seems to be enough. And with long-term commitments like paying your mortgage, providing for your children's education and taking care of elderly parents, there seems to be little left for savings.
Solution: While you may not be able to control how much you earn, you can take control of your finances by tracking your spending. Keeping a budget, whether it is in a spreadsheet or in an app, will help you see where your money goes each month. This strategy helps you map out your financial goals, ensures that you don't spend money you don't have and prepares you for emergencies.
By keeping a budget, you will also be able to assess whether you are able to allocate a certain amount of money each month to investments. This is a good time to grow your savings as the more time you have, the more interest you will earn from your investments. Savings plans are a great way to earn guaranteed cash benefits. Plus, if you start putting aside your money now, you can start with a small amount every month and see your money grow through compounding. Learn which plans might best suit your savings needs with our digital advisor, askSage.
2. Can I afford the home of my dreams?
Perhaps it has always been your dream to live in a condominium with a full suite of amenities. But average prices for condos start at $1 million for a 3-bedroom. That's quite a large financial commitment. Plus, it is not financially prudent to put all your money in your home – you have other financial obligations to meet and you may want to save some of your earnings too.
Solution: Owning your dream home doesn't have to be a pipe dream. If you plan ahead, you can actually get there. If you already own a property, you can have your housing loan refinanced to take advantage of favourable interest rates. The idea is so that you will pay less interest on your mortgage in the long run. If you are yet to buy your first home, it doesn’t hurt to start planning ahead.
It is always a good idea to start small with a home within your budget. Over time, you can think of upgrading for your home once your household income increases. This may take a few years and the right opportunity, but with careful planning, you may just be able to score the home of your dreams.
3. Am I able to provide for my children as they grow up?
Having children is one of life's greatest joys but it can be expensive to give your little ones everything they need. With the cost of healthcare rising coupled with fee hikes at childcare centres, bringing up baby can take a toll on your finances.
Solution: Careful forecasting and planning will start you on the right foot. When your child is born, make an appointment with your financial advisor to take up a health insurance plan for him. At the same time, update your life insurance plan to take care of your family in the event of death, and total and permanent disability. When it comes to your child's education, it is also beneficial to start saving early. You can also think of getting Gro Steady Saver, a flexible savings plan with guaranteed cash benefits, easily available online. You can receive 5% of the sum assured as your guaranteed yearly cash benefit after 2 years, and use this to support your child’s passion as they grow up. Alternatively, this cash benefit can be accumulated with Income at the prevailing interest rate of up to 3.25%, and the payout upon maturity of the policy can possibly be used to fund your child’s university education.
If flexibility of plans are not crucial to you, endowment plans can help you save while allowing you to earn interest when your policy reaches maturity. If timed properly, an endowment plan can help you save for your child's milestones, such as when he is entering university.
4. Do I have enough money for accidents and emergencies?
Medical costs are projected to rise tenfold over the next 15 years, according to a report on Straits Times. Even though all Singaporean Citizens and Permanent Residents are covered under MediShield Life, it only covers basic hospital and medical fees. For instance, there is a cap of $700 per day for basic hospital ward charges under MediShield Life, and the rest will have to borne by you.
Solution: With the introduction of MediShield Life, paying for hospital bills is now more affordable. But to avoid paying a lump sum of money on your medical and hospitalization bills, getting an Integrated Shield Plan or a Personal Accident Insurance can save you thousands of dollars when unfortunate medical emergencies or accidents happen. For higher coverage, you can also consider adding a rider to your Integrated Shield Plan, which will allow you to further lower your out-of-pocket expenses, allowing you to focus on your treatment and recovery instead of having to worry about your bills. Get a quote and make the purchase online – all in just 10 minutes!
5. Will I have enough money for my retirement?
With the cost of living steadily increasing year on year, a big fear you may have is whether you are able to retire comfortably. While your CPF savings is meant to cushion your retirement finances, it might not be enough. Putting aside some money each month for something that seems so far away may not be on top of your to-do list. After all, there are other more pressing financial obligations to meet. But having enough money for your retirement is probably a niggling fear at the back of your mind that surfaces once in a while.
Solution: CPF Life has an annuity scheme that disburses a monthly payout of between $700 and $750 if you have the Basic Retirement Fund of $83,000 in your Retirement Account by 65. But if you think that the amount is not enough for enjoying your golden years, there are other ways to start building that nest egg. Savings and Investment-linked Plans allow you to put aside some money so that you can receive guaranteed monthly cash benefits during a selected payout period. There are also Whole Life Insurance Plans that give you yearly cash payouts while protecting you against death and total and permanent disability. Easily find out which life insurance and savings are best suited to your needs with our digital advisor, askSage.
Having financial fears is common at all stages of life but you can easily overcome these fears with careful planning. Income helps you fear less with its comprehensive range of insurance and savings plans that are aimed at helping you plan for your future so that you can have peace of mind today.
This article is meant purely for informational purposes and should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income products mentioned are specified in their respective policy contracts. For customised advice to suit your specific needs, consult an Income insurance advisor.
This advertisement has not been reviewed by the Monetary Authority of Singapore.