21 April 2011

Save money for your future

This year is the last year I am in my 20s. Quite a number of friends of mine in this age range had been started up their own family. I would not be surprised if they have few babies and in the middle of fighting in their career to achieve better active income. 

Many friends of mine are looking for the new houses and spent some money to decorate their dream house. Before that, let us figure out how much money do we need to have a good family:

Typical Income for Dual-Income Family in around 30s (2ppl*3500 median monthly income = 7000)

Typical Expense for having a family: 

  1. Wedding Expenses: 50K (including wedding album creation, wedding dinners, honeymoon, registration fees, other expenses etc)
  2. House down payment: 60K (20% of 300K house)
  3. Decoration of House: 20K
  4. Furniture: 20K

Monthly Income multiple for the expense: 21.43 months or around 2 years of annual income for both couple without any expenses.If you like to have a better lifestyle, it could go beyond that.

Some of my friends will think that it is a financial burden to have a family
and they keep delaying the plan for wedding. In my opinion, there are more people who cannot afford to get married just because of the financial burden which I show earlier.

In Singapore/Malaysia, there is compulsory savings imposed by the government which we call it CPF/EPF used for retired funding. However, the fact is that it is insufficient enough to support the retirees for their whole lifespan. If you are in 20s/30s, it is the golden time for your to start saving your money for your future, either for your retirement or for your children's education.

How many portion of money you should save?
Life is beautiful. There are certain things you can do only when you are young. Don't you sacrifice your life just for money. You should let your money to work for you instead of you working hard for your money. It is suggested to have 10% of your income to be saved in savings account. You can then invest your excess money in to your investment account.

I have been practicing this method for quite a long time. And it works. Reduce a bit of your desire to spend will make your future life better.

So, start saving your money for your lovely future.

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1 comment:

  1. Hi Jack, well written. I totally agree that there are certain things we can do when we are still young :) Time is money. Time is gold. Let's keep saving and enjoy our life :)


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