How I Learned To Manage My Finances
When it comes to working and managing my finances, I’d confidently say that I have a healthy 7 years’ worth of invaluable experience.
At the age of 19, in the year 2013, I received my diploma from a Polytechnic in Singapore, and wanted to continue my studies by enrolling in a Bachelor’s degree course. However, I wasn’t the most studious teenager during my diploma course, and my Grade Point Average wasn’t the best. In fact, I was just about average. But being optimistic enough to try, I applied to all the local universities in Singapore.
The applications were sent out, and I was facing a nearly 6-month break between the end of my diploma course and the university acceptance period. I was bored after a month of lounging at home, and with the guidance and advice of my family members, I began applying for temp jobs so that I could learn some extra skills and earn some pocket money while waiting for university acceptances to roll in.
I received an offer to do a short term contract at a shipping company, where I was told that I would be covering the duties of one of their staff members who was on 4 months maternity leave. I agreed, and was soon introduced to my mentor, the head of the department I would be spending the next few months in. I was earning roughly $10 an hour, which I felt was pretty good for a temp job in a nice office. I was soon familiar with the work duties that I had to complete, as well as with the staff members in the department I was attached to. Being the youngest by a good 8 years, I was pampered by my colleagues (but with firm and proper guidance for work-related matters).
Soon my meagre bank account was starting to fluff up a bit, and my head was getting equally fluffed up about spending my earnings. At that age, I wasn’t too serious about saving up for the future or retirement plans – my mindset was that I should enjoy myself before university. I’d go for lunches and dinners with my colleagues and friends, with my food-related expenditure sometimes ranging from $10-$50 a day. I’d also go shopping on the weekends for office clothes and outfits for university as well, blowing $50-$150 per shopping trip (which may not be much to some, but for me, who’d previously received only $50 per week to cover all my expenses, it was basically a luxury shopping spree).
By the time July rolled by, I had convinced myself that getting accepted to university would be a cinch, and that I’d receive good news any day now. To my shock and embarrassment, rejection after rejection arrived in the mail instead, I realised that I’d overlooked the fact that I’d be competing for university admission with graduates of 4 other polytechnics as well as the local Junior College graduates, whom Universities favored over Diploma graduates). I hadn’t been accepted to any of the universities I’d applied to. I was devastated. The next day, my Department Head noticed my gloomy mood and called me to her office for a talk. After learning about what had happened, she was sympathetic and offered to speak to HR to extend my temp job for a while more. And so I spent another month working, before leaving the shipping company.
By then, my spending had taken a pause, as I was in no mood to meet anyone for meals, nor was I about to wear the outfits I’d already bought for university anytime soon. I was facing a reality I’d convinced myself I wouldn’t have to face- I was going to have to get a full time job for at least a year more while waiting for the next round of university admissions.
I applied to various jobs, but to add salt to my wounds, I wasn’t receiving any job offers either despite going to multiple job interviews. I was close to losing myself mentally at that point, as I felt that I’d let my parents and myself down, while in contrast, my cousins and friends were doing well.
But I kept my head held high, gradually accepting my reality, and mentally preparing myself to take up any job offer that would come my way.
Finally, the day arrived. I was walking out of yet another job interview when my phone started ringing. On the other end of the line was a local bank, one of the more established ones in Singapore. They wanted to know if I was interested in coming down for an interview. I all but screamed my acceptance into the phone and ran home to prep my outfit and documents.
There were multiple stages of interviews and online tasks to do, but long story short, I was offered a job as a Bank Executive, with a 2 year contract. I started work a day after my 20th birthday, feeling like I’d finally received a chance to set myself back on track and achieve something for myself.
I was starting to earn a good salary again, and my bank account was slowly growing – but this time I had a mission to save up money for further studies. In the months after securing my bank job, I’d done some research into private universities in Singapore, and had found some courses I felt would be the most beneficial and in-line with both my previous studies and my passions – International Trade and Psychology. I narrowed my savings goal to a rounded figure of $50,000 after calculating the tuition costs for the course in private university, and now I was focused. No more splurging on food, no more shopping sprees, no more spending unnecessarily.
Of course, being human, I’d sometimes slip and spend a bit more than I’d planned to, but I soon found a savings plan that soon became second nature to me. I’d read about an 80/20 saving plan, where one should put aside 80% of their salary as savings, and stretch the remaining 20% to cover their monthly expenses. I figured I might as well give that a shot. At first it was tough for me, as I’d cheat on my budget and end up spending my weekly money in 4 days, leaving me with the choice of advancing money from next week’s budget or going hungry. I quickly learnt to scrimp and save my budgeted amount while still eating healthily (tip for college students or anyone who needs to save a lot quickly - make friends with your local eatery owners and you MIGHT just get extra food for the same price, or a discount).
Before I knew it, I’d reached the last few months of my contract with the bank, and after a quick check I found that I’d saved just over 80% of my intended goal of $50K. Not too shabby, but I was determined to meet my goal, as it would allow me to pay for my university tuition fees independently, and therefore freeing a large burden off my parents’ wallets.
I decided to accept the bank’s offer to continue working as a full-time bank staff member, working hard to earn my promotions (which came with pay raises too, to my pure joy). After 2 years and 8 months of working and saving my salaries, and managing my finances like a stingy old Scrooge, I finally reached – and even overshot by a little – my intended savings goal.
Having reached the goal I’d set for myself, I applied to the course of my choice in a private university. I was lucky enough to be accepted, and in the next month I was serving my notice period at the bank. I started university in August 2016, exactly 3 years after my initial bad luck with university acceptance.
I’d lost 3 years of my youth, but simultaneously gained 3 years’ worth of priceless knowledge related to work life and financial management (you learn a thing or two when you work for a bank). Below are some of the most important tips and tricks I’ve learnt over the years, which have helped me save and plan my finances well. You might have heard of these tips, or even have some of them incorporated in your daily life already (well done!). If not, however, it’s alright. If you find them useful, go ahead and practice them, especially if you’re in your late teens and/or your 20s. As the saying goes, better late than never!
Tip #1: Save as many of the hundreds/thousands from your salary, and stretch the tens. You’ll save much faster compared to spending first and saving what’s left.
Tip #2: If Tip #1 is not a realistic saving method for you, aim to save a certain percentage of your salary after factoring in the essential expenditures (rent/utilities/basic groceries). In the end, it’s where you plan and budget properly that‘ll help you save.
Tip #3: College Students – see if you can apply for a student’s credit card, with the sponsorship of your parents. Every month, spend a small amount ($50-100) and as soon as the time for payment comes, pay it off in full. Over the years, the bank will note your timely payments – regardless of the amount– and you’ll be in good credit standing with the bank. This will help in the future should you find yourself applying for a loan from the bank.
Tip 4: Do not be ashamed to use discount vouchers or coupons. It may not seem like a large amount of savings per transaction, but over time you’ll see that it does make a difference. Of course, if you have a really good coupon game, you’ll notice the savings almost immediately! There are various apps you can use to get good deals, or even old school cut-out coupons are fine if you can find them.
Tip #4: Start planning and saving for your retirement in your 20s. Many people put off their retirement planning till they’re in their 30s, 40s and even 50s, but by then they have heavier financial responsibilities (mortgages, credit card debt, children’s expenses, etc.) to handle, and the amount of savings isn’t as high as when they were younger and had less financial responsibility. Even $50 a week can go a long way if you’re disciplined enough to constantly save and not use the money.
