young adults Archives | MoneyDigest.sg

8 Money-Saving Hacks for Young (& Broke) Adults

Saving money when you are young and broke can seem like an impossible task. With the right mindset and strategy, you can save money despite the hurdles ahead. Putting your spare cash each month can make a world of difference. All you need to do is be willing to commit to your financial goals! The following hacks can help.

#1: DRINK MORE WATER

You will save more money if you stop buying bottles of soda and cups of take-away coffee. Bottled water is cheap and tap water is cheaper. There are many great options for filtering your water if you are not a fan of water from the tap. Nonetheless, eating out with a family of 3 can easily save you money just by drinking water alone.

#2: GET A PART-TIME JOB

If you just graduated and you are trying to reach a goal that seems to be taking longer than expected, you can get a part-time job. This job can be a temporary solution to get past whatever situation you are in. Moreover, it is a wonderful way to pay off your dues and debt. If you are building an emergency fund, having another source of income can aid your quest. Market your skills online to boost your job search.

#3: CREATE A MEAL PLAN

Whether you are living alone or living with your roommate, you can save more money by planning your meals. It eliminates food wastage and helps you create more affordable meals. Rather than buying what looks good at the grocery store, you can opt for budget-friendly alternatives to complete your dishes.

#4: CANCEL YOUR UNNECESSARY MEMBERSHIPS AND SUBSCRIPTIONS

You are cash-strapped! You do not need your hefty gym membership or subscriptions to different music and entertainment apps. Think about all the wasted money because of not taking the time to cancel the things that you no longer use.

Image Credits: unsplash.com

#5: ALWAYS BRING A SHOPPING LIST

One of the easiest ways to go over budget is going inside the grocery store without a plan! If you do not want to spend too much money in one place, always bring a shopping list with you. Only go down the aisles that you truly need to grab what you need. Skip the rest!

#6: KEEP YOUR SAVINGS ACCOUNT SEPARATE

Are you breaking because of your shopping habits? Keeping this from happening again by having your savings completely separated. Find an online savings account or open a separate checking account. Make it a little more challenging to take money out of your savings. Your future self will thank you.

#7: EMPLOY THE 30-DAY RULE

When you are considering making large purchases, use the 30-day rule. If you still want it just as much after 30 days, consider saving money for it. Having a waiting period eliminates impulsive purchases made out of excitement or other overwhelming emotions.

#8: DO REGULAR CHECK-INS

Before spending a large amount of money on a significant purchase, have your trusted partner or friend assess the situation with you. Have regular check-ins to look into your current financial situation. This might sound silly at first, but it can keep you from spending money impulsively on things that are not in your budget. Find someone that can help make you accountable for your spending.

Sources: 1 & 2

6 Savvy Financial Tips for Young Adults

Managing finances can be challenging, especially when you are navigating through different conflicts such as budgeting with an entry-level salary or carrying a hefty student loan debt.

Focusing on the fundamental financial strategies will enable you to strengthen your financial position. Work towards achieving your goals and financial success with these savvy tips.

#1: ESTABLISH YOUR EMERGENCY FUND

The importance of building an emergency fund has been the subject of many financial articles. After all, it is one of the most vital financial tasks that you can accomplish as a young adult. An emergency fund is a pool of money that you can earmark for unforeseen expenses.

When unexpected life events occur, the emergency fund acts as a cushion for your finances. For instance, you can use your emergency fund to pay for expenses that come with sudden job loss or appliance breakdown. The amount that you will save depends on the stability of your job, the debts you have, and your income. Experts recommend saving about six months’ worth of living expenses. You can allot at least 2% of every paycheck to accumulate this amount.

#2: GET BASIC HEALTH AND LIFE INSURANCE

Financial literacy involves understanding how to prevent and manage financial issues as they arise. To help you deal with unexpected expenses, you may get yourself insured. Educate yourself about the different insurance products available on the market right now.

Get yourself insured while your premiums are low (i.e., mainly due to your age). If you have dependents, consider getting term insurance to protect them in the event that you become permanently disabled or you pass away.

#3: KNOW WHERE YOUR MONEY GOES

Stay on top of your budget plan by knowing where your money goes. Ensure that your expenses do not exceed your income. As you may be earning with a starting salary, keeping your recurring monthly expenses low can save you significant money over time.

Once you see how the cost of your morning coffee or take-away dinner adds up, you will realize that making small changes to your daily expenses can have a big impact on your financial situation.

#4: PAY OFF THE CREDIT CARD BALANCES

Searching for the lowest interest rates when comparing loan terms can help you save a substantial amount of money over time. You can pay off your credit card balances each month, so you do not get trapped by the interest charges. You can look for a credible expert such as a credit counselor if necessary.

#5: MAKE INFORMED FINANCIAL DECISIONS

Examine your personal needs and goals. Make informed financial decisions by studying the potential outcomes of your options. There are trade-offs between your short-term and long-term goals. For instance, purchasing a car can impact your savings for retirement.

Therefore, you must invest in items that will improve your earning abilities. You can invest in a good suit, an educational advancement, and a set of electronic devices to help you in your job hunting.

#6: LEARN SELF-CONTROL

As a young adult, learning the art of delayed gratification is easier said than done. However, personal finances are easier to manage when you have self-control.

Effortlessly purchasing an item on credit is possible, but the best step is to wait until you have saved up enough money for your purchase. Do you really want to pay interest on a pair of designer shoes?

Image Credits: unsplash.com

Please do not carry more cards than you can keep track of. This savvy tip is crucial for creating a healthy credit history.

Sources: 1 & 2

Teen-Friendly Books About Investments

Whether you like it or not, you are expected to know what you want to do for the rest of your life the minute you graduate from secondary school. It is understandable to strive for the highest paying field or job possible. However, that is not always the case.

If you were to invest money at a young age, you can build a nest that is enough to sustain a comfortable lifestyle in your adult years. This may lessen the pressure you feel when choosing a career path. To begin your investment journey, you must read books aimed at young investors.

PERSONAL MONEY MANAGEMENT

Cary Siegel put an interesting twist to money management with the book entitled: “Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By”. To Siegel, proper money management in accordance to the economy is an important lesson that the youth shall know. He imparts this knowledge by dividing his lessons into 99 principles. Said principles include investing, housing, spending, debit, credit, and budgeting. I, for one, am curious why these practical life skills are not taught in today’s curriculum.

You will get a sense of how to handle the financial aspects of your life as you read along. By combining solid advice on money and adulthood, your curiosity will be widened.

COMMON SENSE INVESTING

Looking for the perfect investment book for young adults? Search no further as John Bogle’s “The Little Book of Common Sense Investing” details the fundamentals of investing! It describes a plain approach that anyone can implement to achieve above average returns.

For people who are risk-takers, his methods may seem too simple. Consider studying further. After all, Warren Buffett included this book on his recommended reading list.

THE WARREN BUFFETT WAY

There is a reason why Warren Buffett’s name cannot be erased in the list of legendary investors. You see, he adapted his own investing style that lasted throughout the years.
It goes without saying, his results have been extraordinary!

His strategy was encapsulated in a book entitled “The Warren Buffett Way”. This books highlights how he invested in the past and in the present. For the young adult who wants to invest in businesses, the insight into Buffett’s thought process is of tremendous value.

MAKE MORE MONEY THAN YOUR PARENTS

Before Christmastime, a financial book from The Motley Fool entertainment was released to serve as the perfect Christmas gift for young adults. First and foremost, The Motley Fool is a “multimedia financial services company that has made investing fun and easy for millions of people since it was founded in 1993”. It aims to share information on how to efficiently manage your money.

David Gardner’s “The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of” is not as funny as it sounds. It is a piece of literature that gives you a guide to outperform your parents’ current professional success. It provides teens with a road map for sketching a financial journey from investing to saving or from budgeting to spending. Ultimately, it reminds the youth that every money spent is an investment. You have to make it count!

Image Credits: pixabay.com

The books listed above offer practical and understandable suggestions, solutions, and hacks about finance. I hope that these books may serve as an inspiration when you start your investment journey. Good luck!

Sources: 1 & 2

Efficient Financial Tips For Fresh Graduates

Congratulations! After the backbreaking years of higher education, you have graduated. The next chapter ahead will not be easier but I hope you find prosperity and joy in the process.

Much like attaining your degree, financial responsibility takes hard work and discipline. Start by reading these following tips to help you stay on top of your money:

GRAB A BOOK OR TWO

Read and understand materials about self-empowerment, investment, and money management. Here are four books to get you started with:

“The War of Art” by Steven Pressfield
“Turning Pro” by Steven Pressfield
“A Money Saving Mindset: 40 Ways to Help You Save” by Derek Polen
“Why Stocks Go Up and Down” by William Pike
“The Intelligent Investor” by Benjamin Graham

AVOID UNHEALTHY COMPARISONS

It is important to limit lifestyle comparisons even before you start making decent amount of money. Comparing your own “backyard” to that of others is basically human nature. However, turning this auto-response into a habit can become unhealthy not just for you but for your wallet. Imagine keeping up with your friends or coworkers who spend their money on designer bags, five-star restaurants, and trendy gadgets. Following their footsteps can easily put you to debt.

SAVE AT LEAST 15% OF YOUR INCOME

Mr. Tan Kin Lian, an experienced professional and former CEO of NTUC Income, highlights the essence of saving at least 15% of your income in addition to your CPF account. Your savings will help you pay for emergencies without having to be tied up with a creditor’s interest rates. Growing your savings shall start with your first paycheck.

PROTECT YOURSELF FROM UNEMPLOYMENT

Having a future mindset can help you cope with unforeseen events such as unemployment. To protect yourself from the immediate effects of unemployment, Mr. Tan Kin Lian also suggested these:

a. Save at least 6 months’ worth of your income.
b. Shy away from relatively large loans that require fixed repayments within several years.
c. Avoid saving in a life insurance policy.

REALIZE THE VALUE OF MONEY

I began to saw the true weight that money holds when I had my first full-time job. It was difficult for me to spend the money that I worked hard for. This is because I know the exact amount of time and how much sweat I poured just to earn my salary. I hope you realize soon especially because we live in the most expensive city in the world.

LIMIT SPLURGING FOR “EXPERIENCES”

Many young adults have turned their spending patterns to experiences rather than material goods. If you solely spend your hard-earned income to pay for your travel without the consideration of your savings, things can go down hill. Saving money is important not only because emergencies may arise but also because retirement is inevitable.

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6 Major Reasons Why Young Working Adults Are Not Saving Enough

1. MINIMUM WAGE

As fresh graduates enter the workplace with little to no experience, some are forced to settle for entry-level jobs with minimum wages. Whether you are a secretary at a recruitment firm or a personal assistant at an advertising company, the relatively low salary you earn every month makes it difficult to save money.

2. RECURRENT RENT EXPENSE

Some young adults move out once they start earning a decent amount of money. The independence, freedom, privacy, and convenience can be attractive but the reality of the rent expenses can hit you hard.

In the city centre, it will cost you at least S$500/month to live in a single room and at least S$1,500 to live in a small apartment by yourself. It makes more economic sense to stay at your family home and set aside the hundreds of dollars per month to your savings or investments.

3. INDULGING ON DESIGNER LABELS

Most young working adults spend their fortune on designer labels such as Prada and Louis Vuitton as well as other artisan brands. You may think that you are standing out from the crowd by carrying your S$2,000 Prada tote bag and your S$300 artisanal fragrance but you are simply creating holes in your pocket.

4. CABBING EVERYWHERE

Heading to work late? Hail a taxi.

Coming home after a crazy night out? Hail a taxi.

Aside from designer and artisan goods, you are preventing your savings from growing by cabbing everywhere. Five late night taxi rides can cost you at least S$100 and that equates to about 10 lunches at the nearby food court. This is why you must set aside an “emergency taxi fund” with a maximum of S$60 per month. You must not ride a taxi beyond your intended budget.

5. TECHNOLOGY AS NECESSITY

Technology is so pervasive in a young adult’s life that its costs are virtually inescapable. Interacting through social media is not just a culture but also a necessity. But staying connected comes with costly price tags as having the latest gadgets and paying for the monthly broadband fees can affect how much you can save.

6. EASY ACCESS TO SAVINGS

Most of us struggle with keeping our hands off our savings accounts. With the easy access of Internet banking, credit cards and multiple ATM machines, it is more convenient to spend cash than to save it. For young adults with this dilemma, make spending a chore by converting some of your money to US dollars. The thought of having to go for and pay for the currency exchange will likely to dissuade you from spending!

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1 & 2

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