Manage your finances for a better future

by By Latashni Gobi Nathan (latagn@sph.com.sg)
published on 30 June 2016

Taking the time to proportion your salary can help you stay on top of your bills, and save more money than you would ever have saved if you had not managed your finances.

You do not have to have a high paying job to save a significant amount. Ms Karen Foo Cho Wan, a motivational speaker who has conducted seminars for working professionals, said setting up a basic financial plan for yourself may help you eventually achieve the lifestyle you wish to have in the future.

She said: “Consult a certified financial planner if you are not familiar on the approach at first. Remember that while professionals may be around to help you, you still have to put in the work because nobody will care about your money and future more than yourself.”

Portion your salary

 Everyone may have different priorities for their responsibilities but as a rough guide to help you meet your financial goals, Ms Foo said to split up your pay into these portions – 60 per cent for your necessities, 10 per cent for an emergency fund, 10 per cent for your education, 15 per cent for investing and five per cent for rewards.

The bulk of your pay will go to paying bills, groceries, transport and other necessary things Save more here by eating at home more or taking public transport.

It is important to have an emergency fund as you will never know when you may need the money to pay for medical bills or even book an emergency flight.

Ms Foo said: “Have a separate bank account that is specially used for this fund. This is an account you should not be touching at all. Have your money automatically transferred into the account at the end of every month. It is also a good idea to not have a bank card for this account, as it will prevent you from withdrawing money from it.”

Having an education fund need not necessarily refer to paying for school. It could also mean using the money to upgrade yourself.

Ms Foo said: “Have a commitment to constantly learn and develop yourself. Try to invest in courses, seminars or even books written by successful people in the field you work in. This way, not only do you learn new things, but you also can take their advice and speed up your success.”

Sticking to the plan

If you think you may need help with not veering away from managing your finances, then get someone you trust to keep an eye on you.

Ms Foo said: “It can be your spouse, siblings or parents. Not only can they offer their advice but they will also question you should you step out of your plan. You should also print out your plan and place it at your desk or in your room. The constant reminder will help keep you focused.”

It is also a good idea to avoid credit cards as much as possible and to only use them when absolutely necessary. Talk to people who are good with managing their money and avoid putting yourself in situations where you have to spend lots of money on a weekly basis.