Millennials in Singapore account for 1.2 million people, or you can say, 22 percent of the total population in the country. They are currently between 25 and 40 years of age. For young people, retirement may seem like something that you don’t need to think about right now. However, the big advantage millennials have is time. They can start planning for their financial foundation during the prime of their lives to get into good financial health by the time they reach the retirement age. Here are the personal finance tips for millennials in Singapore that can help you enjoy a good life after retirement and even better to retire early.
1. Good financial habits: Learn good personal finance management habits to maintain a well “money in, money out" balance sheet. You should know where your money goes and how much. This way you can make adjustments to cut back on things that are not necessary and contribute more towards savings.
2. Set financial goals: The first step to money management is to create an emergency fund for 6 months if you lose your job for some reason. The next step is to save money for your retirement. Determine how much money you would require if you retire early and want to lead the desired lifestyle. The amount needed after retirement will vary from one person to another. Depending on your needs, set short-term financial goals that can help you meet that long-term retirement goal.
3. Think about life insurance: Another important aspect of personal finance in Singapore for millennials is to buy a life insurance plan. Buying any health insurance will help you protect your loved ones in case of premature death, illness and hospitalisation. The right time to buy an insurance policy is when you are young and insurable and can pay the premiums.
4. Consider investing: When your savings, expenses, and insurance needs are met, the excess funds can be spent on an investment venture to get a higher return and earn passive income. Learn about different investment options like equities, stocks, shares, exchange-traded funds (ETFs), unit trusts, real estate trust funds and more. Always make informed decisions to get guaranteed incomes.
5. Look for multiple income sources: Generating multiple streams of income can have a major impact on your personal finances. If you are able to add S$500 each month, it could help you pay your debt and meet your luxury needs. When you have a full-time job, it is important to assess how you can generate multiple income streams. Look for income sources that allow you to be flexible, sustainable, and scalable. You can become a virtual assistant, do freelancing, sell home-made products, do graphic designing, and so much more. Extra work requires some of your free time, but its payoff can be huge.
Conclusion Financial planning in Singapore for millennials is all about supporting your life goals rather than reaching a set number. Money is important and this is what supports our lives. If you follow the aforementioned tips, you will surely reach your life goals and achieve greater financial well-being.
About the Author Rob Berger Rob is a financial planner at a leading multinational company in Singapore. He loves to share his financial knowledge with friends and family. He often shares his expert tips on personal finances with people. In his free time, he works on his first book - Managing Personal Finance in 5 Steps