19 Replies
My son is 2 years old, and I'm only 21 years old now - but I have the same concern too, especially being a single mum. I think to figure this out, what you'd need to do is to find out how comfortably you want to live in retirement and when you want to retire, to calculate how much you need to save! You'll also need to factor in the car inflation from now until your retirement age. Eg. If you want to have $2,000 per month, that $2,000 now would probably be $7,000 by the time we retire. For example, you want to live comfortably at $2,000 a month, retire at 60 and live until 85 - including inflation it could be $7,000 x 12 x 25 = $2.1 million. Generally, a good sum to save for retirement would be $2-3 million! I have about 44 years before I reach 65 years old, but I'm not even sure I can earn $2 million by then. So, the next thing you need to figure out is your financial situation and how much you are able to spare - a good savings rule is 50-30-20 rule, 50% of your income on needs like bills and rent, 30% on wants and the remaining 20% to savings :) Now that you know how much you can spare for savings, you need to research on the plans/available schemes that would best suit your needs - whether it's a savings account, bank savings plan, insurance-linked financial product or investment. It'll help to set up monthly accounts for both your retirement and your child's education so that you don't forget to save, BUT always remember - you have to set aside some cash for emergencies too, especially if what you save in is not withdrawable!
This is a very tough question and a very tough situation that I think most Singaporeans are in at the moment. Cost of living in Singapore is extremely high and that includes the basic day to day items. Children’s education is a priority and I don’t deny that. We are paying 2+k per quarter on just tuition. And we have 1 kid and he attends 2 subjects tuition at 1x weekly. I think at the end of the day, it is a balance and clever planning On how to be able to give proper education without the fancy frills. Not all TOP education or enrichment centers are best Nor it is a situation of giving my kid what the neighbours kids have. It’s about priority and budgeting and how much we have as a family and then see what’s affordable. Yet not sacrificing our own savings when we get older and kids are now fully grown up. I don’t want to rely on my Son when he has a full life to love for himself in future and I also want my own independence.
I think the key is to saving first and investing. Explore all options like CDAs, low risk bonds, medium risk equities, and hedge according to your needs. If you are younger, you can take more risks. As you become older, you should invest more in safer instruments. There are a few places where a Singaporean can save money. Buying regular food instead of organic, buying house brands instead of branded stuff when it comes to food and clothing, using public transport instead of Uber, all save a dollar here and there. However, at the end of the month, you might end up saving a couple of hundreds. Like said earlier, don't save what remains at the end of the month. Try putting aside money for savings first and try to manage in the remaining. Use cash instead of cards when shopping. You tend to spend less when you pay with actual money instead of tapping a card. Hope this helps
Cost of education in Singapore is indeed expensive. Have you thought about how much you want to spend on education per month? For myself I have budgeted $1,000 per month for my kids education each. Before primary school it is tough to fit in the Budget. Post primary school it’s much easier as school fees are less than $50 per month. My kids are 5 and 3. I send them to government linked preschool and after working mums subsidy it’s about $600 a month. Remainder $800 is used for - Swimming classes ($220 for both kids) - piano class at home ($300 for both kids) - Chinese tutor ($200 for both kids) - cc arts class ($80 for both kids) For savings - I make use of fixed deposits, CPF investments and I bought a property in the city centre of KL ($400k SGD), where I get decent rental yield. It’s also my back up to retire if Singapore gets too expensive
I can relate! I only have 1 daughter, 3yo, but as early as now, I'm already thinking about the same thing like yours. Seeing my parents who do not have retirement plan and reaching senior age soon, I'm just glad they are good enough in handling their finances and have savings in their bank. And social security agency will be helpful for their pension. But I'm not good with money like them. So now I'm opening myself to conversations about financial planning, savings and retirement. I have spoken to one agency already and expecting more. Being able to provide to you child's needs is one thing very precious. Keeping yourself sustained and independent when you grow old is another!
Hi joanna, i’m not too sure if my suggestion will help but here’s mine anyway. I think it’ll be good to instill a mindset in your kids from young to earn for what they want. It doesn’t have to be monetary in this sense. For example, if they know that they want to get into an overseas university, they will need to work very hard for it, perhaps earn a scholarship or even work to help out with the finances. Basically, fostering that self-sufficient nature so that no matter which stage they are in their lives, you won’t have to worry.
Hi mommy, this is really one of the toughest decisions we have to make and maintain to be able to have a steady future, both for ourselves and our children. With this, I advice that you look in to possible investments that could grow eventually. Your children's education should be a priority you can start trying different financial schemes that is offered by the school and have it planned long term or even by the end of the school year. Allocate your expenses wisely and maybe opt to look for a hobby or interests that you can use to gain extra earnings.
Hi Joanna, My kids are slightly bigger now, but a few years ago we started an investment plan where we invest a lump sum every year for the next 10 years. A few years after that, the kids get a dividend, which they can use for their education. Although our plan for the kids is more structured, we're a little more lax with our retirement investments. However, we are thinking about that as well and putting aside some money every year, which will be for our retirement.
It’s a tricky situation as education is getting more expensive. However, the good thing is that most of our education is subsidised to a certain extent. Even so, you will still have to save money for retirement. Do a Long into your current monthly Budget to decide if anything you’re spending on can be decreased and be used for savings instead. With that portion decided, you can use that for potential savings for your kids’ education instead.
I think you should start at being very clear of which your top most priority is. For us, we want assure that we can provide our son with the best that we can. Having said that, my husband and I did decide on the allocations of our income and savings prior to having a child. If you didn’t do that, don’t think it’s too late for you. What you can do is analyse your finances and then decide on the allocations based on importance.