I've been getting a lot of comments and emails from you guys recently, with many of you telling me your new year resolution would be to Save $20,000 in a Year. That has inspired me to write this post, hopefully this will help you in your financial saving goals and make 2015 the year where you save more than you ever did!


Credits to Dreamstime.

Here's how to get started:

1. Pay off your debts



The most common debt for my peers is the Tuition Fee Loan. Most of my friends (and relatives) took up the OCBC loan, which offers attractive repayment terms of $100/month over a maximum period of 20 years. You also don't have to start paying until you've graduated. What a good deal, right?

But did you know that the longer you take to repay the loan, the more the bank earns from you in interest? Why give them that money?

One advice I gave my closer friends was to borrow the money from their parents instead, and pay off the bank loan asap. At least that way, you save on interest rates (or if you're nice, you can give your parents some sort of interest in return for the loan. At least the money goes to family, instead of strangers.)


2. Find part-time income



I teach tuition for JC General Paper for extra income every month, and am able to charge slightly higher than market rate because I am good at it. It took me 5 years to build up my portfolio with students who have proved that my teaching methods do work, before I was able to charge higher. My friends who teach piano also earn quite a bit for just 8 - 10 hours every month. If you know what you're good at, you can focus on building that up for yourself until you get a good reputation (and thus higher fees). 

If you can't teach, what about doing something else that you're good at? There's a huge supply of part-time jobs out there, but few people are willing to spend their extra time on that. If you truly want to save, getting a part-time job which can give you up to $500 a month is going to help a lot if you want to save $20,000 in 2015.


3. Kickstart your emergency fund



Let's face it, you don't want to end up in a situation where you need money desperately, and have to go knocking on your friends' door asking for a loan. Not only is it embarrassing, but it will also break your heart when you realize many of whom you thought were real friends aren't willing to help you when you need them.

Sometime mid last year, my sister asked me to lend her $1000 to repay our mutual friend whom she had borrowed the money from to buy her air ticket to Korea. Not wanting her to take the easy way out (she used to save more than me when we were younger, but spent almost all her savings ever since our parents gave her an ATM card), I said no and told her to save up the money herself. It was probably the best thing I've ever done for her as a sister, because in refusing to lend her the money (even though I easily could), she was forced to find ways to get the cash herself. Since then, she has started making home-cooked meals more often, took up more part-time jobs, and cut down a lot on shopping. 

As a general rule of thumb, aim to have at least 3x of your monthly expenses in your emergency fund, kept aside for rainy days.


4. Say NO to peer pressure



Many of us overspend because we feel obliged to go along with what our friends want - eating at cafes, buying clothes, going clubbing, etc. Not wanting to be labelled as the party-pooper, we keep quiet and just go along with the flow.

Guess what? Your friends are all in debt too! (Unless, of course, their parents are like Warren Buffet or Philip Ng.) There's nothing to be ashamed of in telling people that you're on a budget / saving up to repay your study loan / saving up for a new car, a wedding, yadah yadah. My friends G and D are never afraid to say they don't have the money to join us at a restaurant, can we eat at a cheaper place instead?

Just having the guts to say this one word can save you a lot of money. Can you find a job that pays you for just saying ONE word? 


5. Quit smoking and drinking



I have nothing against people who drink or smoke. Even I myself do that sometimes.

All those HPB campaigns rambling about the dangers they pose to your health? They don't work on me. What I found to really work, though, is to think about the cost of these bad habits. 

One pack of cigarettes = $10++ 
One can of beer = $8++
One cocktail = $15++
One vodka shot = $12++

If, like my colleagues, you smoke every day and go drinking on Fridays and Saturdays, that can easily cost you over $300 in a month!

Then in a few years time, what do you get? A huge medical bill for lung cancer / liver failure / whatever. Smart....not.


6. Stop paying too much for food
I love my cafe brunches, but I try not to eat them more than once a month. And I'm a self-professed hawker centre fan, which is not only cheap but also extremely tasty.


Even Gordon Ramsay came here to learn how to make our hawker dishes. 

You eat 3 times every day. And where does all that food go? Down the toilet bowl. Whether or not you spend $20 on a cafe lunch or $3 on a plate of Hokkien Mee, everyone knows the outcome of your food is still the same. The only difference is in your wallet (and maybe your Instagram posts, because you can get such a kick of posting hipster cafe photos!).


7. Stop overpaying for insurance
Last year when I was still a greenhorn, a friend of mine convinced me to take up an Investment-Linked Policy with him and pay a $150 premium every month. He sold it to me as a savings plan + life insurance coverage. Sounds not bad right? That's what I thought.

It was only later in October last year when I met someone who worked in insurance as well, but was brutally honest about the pros and cons of every policy. He hardly sells ILPs, and all his clients consist of friends, relatives, and relatives of friends. Did you know that insurance agents sell your ILPs because they get 50% of the premium you pay every month?


Wah lau eh. Kena conned by friend!

If you're thinking of buying insurance, I suggest you speak to an honest agent first who won't give you all the fluff about each policy. I wish I had met my friend earlier ($150 continues to drain out of my income every month for something which is barely sufficient to cover me), but oh well, the mistake has already been made.


8. Stop paying for things you don't use



Ditch that gym membership. Do you really need that manicure /facial / spa package? And why are you still paying for premium cable TV when you're barely home to watch it? 

I'm especially wary of promotions that offer you a package for XX sessions. Most of the time, I never finish using them before the deadline. After this happened thrice, I ditched the package and now rely on a "pay-as-I-use" model.


9. Go for movies, but avoid the movie candy
I can never justify paying $10 for a popcorn or $8 for nachos when I know I can get them cheaper before or after the movie. 


10. Take advantage of multi-purpose electronic devices












Seriously, why on earth do you need an iPad, iPod or a Kindle when you already own a laptop and mobile phone? And unless you're a professional photographer, you will never get back the money you spent on buying your DSLR.

Instead, use your current electronic devices to double up for multiple purposes. Need a music player on-the-go? Load songs into your phone. Read and do work on your laptop instead of spending money on a new iPad / Kindle just because they're lighter. You can save that money for a better use. 




A Basic Budget Calculation

Income:
$2000 (on a starting pay of $2,500, after CPF deductions)
$500 (from part-time jobs)


Spending:
$800 a month

Bonus
$4000 (2 months bonus)

$1,700 x 12 months + $4000 = $24,400 easily!

How is it difficult to save $20,000 then? (You can even have extra money left to splurge on travelling!)

P.S. I do not get any bonuses from my job. The above figures do not reflect my actual lifestyle, but are meant to be an estimated guide. 

If you found this useful, you might want to read my earlier post on How to Save Money in Singapore. Or if you have any other tips you think should be on this list, please let me know!


Here's wishing you all best for your saving journey in 2015,
Budget Babe





86 Comments

  1. hi there, i am astounded you can teach GP. i suck at GP. in fact almost all my friends suck at GP. 600 in expense is like a hermit.300 in food, 200 to give parents, 120 for transportation, 100 at least for insurance.120 for entertainment .

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    1. Hi Kyith, different people are good in different things. My sister is great at teaching Math, while I suck at the subject. I allocated $800, not $600, to expenses. That is not exactly very stringent - one of my friends survive on a $400 budget every month. It depends on how much someone wants to save, I guess.

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    2. ah that is a good figure to work with. $400 think that will be much subsidy.

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  2. Nice write up! Maybe home cook is a better option if we have time. :)

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  3. In my humble opinion (not a FA), it is much more prudent to terminate the ILP with the losses and buy term plans or limited whole life to ensure you're still adequately covered.

    Speaking from own experience of terminating a one year ILP at 90% capital loss.

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    1. Hi Wei Jian! You really think so? Mine is 2 years worth though, feels a bit heartache to throw all that money away. That's why I'm thinking of just holding out until it matures in 15 years then get back the money.

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    2. I don't think i am allowed to give recommendations. Let me drop you an email separately. (Although most of the info are available online).

      This ILP that i terminated was the reason why i started reading up on Personal Finance and now, i am actively doing my own investment in equities. Took that loss as lesson fees.

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    3. Hi weijian, would u be able to share with me too? I have a few ILPs on hand. I have always wanted to do own investments but have totally no clue on how to start. Would u kindly advise me. Thanks alot :)

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    4. Thecatress catress, sure. But i don't know how to contact you. If you could drop me an email junk.crap42 (at) gmail (dot) com (thats my spam account) so that i can send to you my point of view.

      Sorry Budget Babe for "hijacking" your post.

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    5. Hi Wei Jian, I'm still waiting for your email! Haha.

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    6. Hi Wei Jian, would appreciate if you could drop me an email regarding ILP too as I have one on hand which I just bought last year.

      naomitan92 (at) gmail (dot) com

      Many thanks!

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  4. Hi,
    Nice write up already abopt point 1-5 years ago ... guess i just missing the 6-10.lolz
    But $800 expenese it too little IF you have mthly utilities,hp etc bills to pay on top supporting younger family members ='(

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    1. Hi Xavier, oh dear, yes that would be another liability to your funds. I do not support my younger sibling as I insist on her being independent just like I had to. She teaches tuition as well so she can afford to take care of her own expenses. Perhaps if you do part-time jobs it might help supplement your income further?

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    2. Hello Every One, I am mrs Julian Sam From Ohio U.S.A, I quickly want to use this medium to shear a testimony on how God directed me to a Legit and real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $5,200 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains, then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr Harrison Loris who is the C.E.O of Harrison Loris Loan Company So i applied for a loan sum of (320,000.00USD) with low interest rate of 2%, so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than two(2) days the loan was deposited into my bank so i want to advice any one i need of a loan to quickly contact him via: ( Lorisloancompany@yahoo.com) he does not know am doing this i pray that God will bless him for the good thing he has done in my life.

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  5. Hi Budget Babe, My friend sent your post to me and, yeap, I am impressed that you have saved such a big amount of $$ last year. Nice job :) I used to have similar pay as you when I first started working in SG. however, as a PR, we are not as lucky as you that can get free accommodation or possible free meals from parent :( (assuming you are local). Anyway, I was wondering what is the reason why you never put aside part of your 20k or your monthly saving comitment to investments? says blue chip (like SPH that giving out 4% dividends etc)? For us who are in 20+, the power of compound interest actually may help us to increase your wealth portfolio even faster (and ofcourse, we need to take into account on the paper loss risk etc).

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    1. Hi Kenny! Yeah, I have PR friends who told me the same! I'm currently planning for a post on rentals and how to not have it eat up a whole chunk of your income...still doing the research now, so do check back again in the next month or so! But hey, I do not really get free meals from my parents much. Homecooked meals /hawker food help me to save a lot. I'm actually interested in investing my savings as well, currently trying to learn more about it before I jump in! If you have any tips or good investments to recommend I'll love to hear them :)

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  6. Ok found your blog! please allow me to link you to my blog, so that i know when's you are updating your blog. it's for me to learn more things from you. thanks!

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    1. Hi thanks! Where did you chance upon my blog from? :)

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    2. somehow by linking through the internet i managed to find your blog :D i guess everyone is linking you up now :D

      anyway just curious, do you have a boyfriend? dont get me wrong!! i ask this because usually a boyfriend will pay for a meal. perhaps thats where it helped you saved your $20,000? haha

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    3. Yes I do have a boyfriend, but unlike other girls I actually either split the bill / sometimes I treat him, sometimes he pays for me. We're very equal in the relationship and I don't expect him to treat me like a princess...in fact I scold him if he spends too much on me hahah. Trying to get him to save up as well for wedding!

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    4. With this, i respect you alot

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  7. Hello ! I read that you're teaching GP. i was wondering upon the rates and how do lessons go about ? Also, what exactly would one learn during those lessons ?

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    1. Hi there, are you looking for a GP tutor? If so, please email me at sgbudgetbarbie@gmail.com to discuss further, thanks!

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  8. Hi, can you advise me.on the following.
    I would like to learn from you.

    If the disposable.income is $2500.

    $2500-$150(insurance )-$400(parents)=$1950

    $1950-$1700(saving) =$150

    $150 for transport and food and hp bills?

    Not accounting the broadband bill.

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    1. Hi Xueli please email me at sgbudgetbarbie@gmail.com and I'll advise u accordingly :)

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  9. How do you even live life as an 20 year old?!

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    1. I live a very fulfilling life as a 20-year-old, thank you very much :) any of my friends will tell you that. Saving doesn't mean not living. There are many ways to get by on a smaller budget. My friend in the US feeds her family of 6 and owns a car while getting by with only her husband's meagre income as a contractor. So do you still thinking living life is impossible?

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  10. Hello budget babe, nice write-up. Just to share, I had the same feeling about my IPL when I just started it. But I thought I have no one to blame except for myself. So I continued paying. I have my policy for 8 years now. Looking at the amount that I can draw out now (still lesser than what I have paid as premium) shld I terminate my policy, I am feeling better about it now. I am treating the difference as sunken funds (nothing in this world is free and probably I shld be paying something for my insurance, right?) Probably it is abit on luck and what my life planner had chosen for my portfolio. Hopefully you feel the same about your IPL soon.

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    1. HI there! I'm still in a dilemma over mine. Yeah, 8 years is too much to terminate! I'm still considering whether it'll be better to forgo the amount I've paid so far (2k) and terminate it, in order to invest the money and grow it with compound interest, or to keep paying until I get back returns in 20 years. Plus, the insurance coverage apparently is not high - my family only get 200k if I die, so nothing protects me if I get hospitalized, etc. I definitely should have waited to become more financially savvy instead of saying yes to my friend so soon :(

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    2. Probably you can look at the hospitalisation insurance that you can pay with your medisave and top up with cash for the rider for additional coverage. ILP, in my opinion, is an insurance with savings. If you hope to get higher and much faster returns then investment is a better option. My current ILP has a rider to cover critical illness. So it is not only upon death payout.

      Good luck with your final decision for your insurance policies.

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    1. Oh ya. I oso cancelled my ILP plan. Long pain rather short pain.
      Bye bye Thousands plus.

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    2. i think you don't have to go for the best and most comprehensive plan. it is likely most people overestimate and over expect low expectation events from happening. i have much close people that suffer from cancer as well. and the bills are 120k. in all things this availability bias (just because there is such an event, it distorts in your mind it is very prevalent) and loss aversion taking place. have a plan that takes care of the majority of the large costs in time of need, but leave u to pay the deductables. work the way insurance is suppose to work but not overinsure.

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    3. Kyith your ang moh steady lah..

      Up to individual ba. To me, Health & safety cannot compromise lo. Eg prudential the best and comprehensive plan. At age 30, paying rider hard cash $30+ per month. That's the cost of a dress. Main plan using cpf. Duno how much. Who cares cpf. End of day govt will eat our cpf lo.

      Can covered at first dollar. Why not. Deductibles can be costly if you do some calculations.

      Sometimes you happened to know a doc who is good to cure this disease. But this doc can only treat patients in ward A. Docs are tied to certain wards wor. Means can't cure me if I'm in ward C lo.

      If you can stand patients snoring, screaming, patients' visitors chit chat loudly... by all means stay in 2/4/6bedders. Sick liao still can't rest well.

      Downgrade plan easy, upgrade plan difficult bcos have to screen your health again. Keep fingers crossed no preexisting conditions when wana upgrade. Downgrade when retired.

      Aviva is oso not bad too. If happened both spouses with Aviva, kids (max. Four) will be covered till 20+ I think. But under govt plan.


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  12. I like your "9. Go for movies, but avoid the movie candy".
    Its a good principal; I go for the café lunches but avoid buying a drink to go with lunch or dessert, the main meal is big enough to fill me up and plain tap water will do (I live in Australia).

    How do u say no to the person who orders two glasses of wine, starters, main meal and dessert and wants to split total bill equally? I hate those people!

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    1. Hi Sue Lin,

      Wow, Australia meals are actually pretty expensive. I went there last year and the prices were quite steep for meals. Good tip on avoiding the drinks though, and yes plain water is always the best. Free too, if not the cheapest option.

      Gosh, I get annoyed like those people too! If the bill is not too skewed, and it's a good friend, sometimes I just close one eye and split it evenly. However, if it's quite a fair difference, I usually just take out my phone and start calculating just my items, then multiple by the taxes and service charge, followed by putting the amount on the bill. That way, it's like blatantly signalling for the other party to pay their own share, and they usually do :)

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    1. Please kindly refrain from using my blog for self-promotion purposes. Thank you.

      Also, note to readers, I would highly discourage taking loans. As you would understand from my posts, clearing your debt is a recommended priority before you start to look seriously at saving for emergencies/long-term goals.

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    1. Hi Zhang Lee (or do I call you Ben Janny?). Curious question here, how come your names do not tally? Looks like an obviously crafted "referral" tool to me actually. I hope you're not a lender in disguise posting this, because that would be quite unethical, wouldn't it? Also, your posting name is "Zhang Lee" and your email is "Zhang James" to contact for the loan? Sounds like self promotion if you asked me.

      Please kindly refrain from using my blog for self-promotion purposes. Thank you.

      Also, note to readers, I would highly discourage taking loans. As you would understand from my posts, clearing your debt is a recommended priority before you start to look seriously at saving for emergencies/long-term goals.

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  27. Deleted all comments promoting loans. PLEASE REFRAIN FROM SUCH SHAMELESS SELF-PUBLICITY on my blog. All comments will be reported, and any repeated spam posts from now will be reported straight to the police. This goes out especially to "Georgina Howell" and "Juliet Quin"

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    1. You can enable the comment moderation & human verification.

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    1. Just because someone loans another person money doesn't make him God. Especially when he is earning interest from it.

      Oh, and Prophet Akin? You don't have to pretend to be some satisfied client posting on behalf of you to "share" what a "blessing" you are to the whole world. You forgot to log out of Google first before you did that ;) We all know who the real scam is now!

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    2. Given the publicity of your blog, you may want to restrict the blog comment to be reviewed by you before being allowed to be posted. That way, you can stop these spammers. Just some thoughts which i think are useful to you.

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