And if there’s one thing the Covid-19 pandemic has taught us, it is to set aside an emergency fund for unexpected financial shocks.
Whether you buffer for three months of your salary or six months of your living expenses, a rainy-day fund ensures that you won’t end up in debt instantly even if your plans are suddenly derailed.
To outpace inflation, learn to invest so that you make your existing funds work for you to build up your wealth for the future.
For instance, if you’re able to invest S$300 each month at an 8 per cent annual return, you could accumulate S$100,000 in less than 20 years.
From index funds and unit trusts to a balanced portfolio consisting of bonds and stocks, there’s a wide range of investment options available today that you can choose from to help you get such returns on your capital.
KEEP GOING
Even after getting all this into place, you might still feel overwhelmed. That’s completely normal. Every journey begins with a single step. You don’t have to master everything overnight.
Start small, whether it’s committing to a spending budget, saving a little more each month or making your first investment. Consistency is key — over time, these will start to feel like second nature.
Financial freedom might feel far off, but with the right steps and guidance, it’s not out of reach.
Dawn Cher, also known as SG Budget Babe, has been running one of Singapore’s most popular blogs on personal finance for the last 10 years.
