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3 'adulting' needs you should start thinking about in your 20s

15 Nov 2019 
SOURCE: CPF Board

There comes a time in everyone’s life, usually in our mid-20s, when we all share the same sense of fear and adventure — commonly known as adulthood. 


From paying bills and building a career to buying a home and starting a family, it can all seem very daunting. However, it is during this period that we have to become responsible for our future.


It’s perfectly normal to feel this way. This is all part of taking on the challenges of adulthood — and we’re here to offer tips, provide you with key information, and ultimately give you the tools you need to craft your own future.

Read on, and be prepared to confidently nail “adulting” at the end!


Step 1 to “Adulting”: Creating your own path towards financial independence
Once you start working and earning your own income, you’re already on the path towards what’s probably the most important goal in adulthood — financial independence.

This is also the time when you’re starting to figure out how to manage your money. Between funding your daily expenses, lifestyle habits and future goals, you’ll soon realise that having a budgeting system in place will come in very handy for keeping track where your pay goes.

One of the most common ways of setting up a budget is to split it according to a percentage for various expenses — for instance, the 50/30/20 rule:
3 'adulting' needs you should start thinking about in your 20s  
Of course, this is not a hard and fast rule, as budgeting should be tailored to your own individual lifestyle and needs. For instance, if you’re planning a holiday to Europe in a couple of months, your budget would probably include a percentage set aside for the expenses relating to your trip.


You can even try adopting a “Budget Challenge” of your own — by testing yourself to see how well you can structure a budget to meet your desired lifestyle and needs, both in the present and future.

However, a budget is ineffective if you don’t stick to it, so make it a point to measure your success in sticking to the plan each month!

Step 2 to “Adulting”: Understand how your actions now determine your financial future
Already have a budget set up? Good on you! This means you’re ready to take on the next step towards financial independence, which is to think about your retirement.

Yes, we know. In your early 20’s, when you’ve just started working, retirement seems like a lifetime away. But this is really the best time to start planning for it, because you have time on your side. Now is when you are in the best position to maximise your potential for accumulating and growing your savings.

Let’s start by looking at how you can leverage your CPF to build up your savings. As a Singaporean, you’ll know by now that part of your monthly income goes towards your CPF savings. Your employer will also have to make regular monthly contributions towards your CPF according to the CPF contribution and allocation rates.

Coupled with the attractive interest rates offered by CPF, these savings will add up to a considerable sum over time. Did you know that for as little as $2 a day, you can grow your CPF savings by more than $14,000* in 15 years?

*Computed using the base interest rate of 4% p.a. on the Special Account (SA). Other terms and conditions apply. 

Here’s an example of how a CPF member managed to save up $50,000 in his CPF accounts over the course of 5 years:

3 'adulting' needs you should start thinking about in your 20s  ​

Read more about this at “Is it possible to have $50,000 in your CPF in 5 years?”

Notice how his CPF savings grew up to $51,450 in just 5 years? That amount will continue to grow in 10, 20, and even 50 years’ time and beyond. That’s the secret to building financial independence — savings, interest, and time.

Taking that into consideration, you’d also have to budget, save, and invest the rest of your salary now, in order to build up a secure financial future for yourself.

When planning for the longer-term, we must also remember that our standards of living are rising, and we’re living longer as well. This means that we would need more savings in order to maintain our lifestyle in the future, and meet our needs throughout the possibly longer years in retirement. Factor these considerations in as you budget for your future needs.

Read more:
Here’s what young Singaporeans really need to know to start planning for retiring
Don’t wait till you’re 30 to make these 4 financial decisions
How saving 10% of your income and your annual bonus can change your retirement completely

Step 3 to “Adulting”: Keeping your wallet and your health in good shape
Now that you’ve got the basics of being financially independent, it’s time to move on to the most important thing of all — health. Or rather, the potential costs associated with managing your healthcare needs through life.


Did you know that all Singaporeans are covered under MediShield Life, which functions as a universal, basic healthcare insurance? MediShield Life protects you in the event of unexpected medical or healthcare-related emergencies.

On top of this, you have the option of adding on additional coverage in the form of Integrated Shield Plans (IPs), which come at an extra cost. 

To make a better decision, it is useful to consider these two questions to assess which plan suits your needs best.

3 'adulting' needs you should start thinking about in your 20s  


Read more: Two questions to ask before you buy an Integrated Shield Plan

Ultimately, managing your insurance premiums is crucial to keeping both your health and wallet in good shape, in the unexpected event of major illness — which could strike anyone. 

Read also:
A fresh graduate’s guide to different types of health insurance in Singapore
Did you know that you can do this with your MediSave?
Steadynomics 101: Tips to get healthcare ready


So are you ready to nail “adulting”?


Of course, there’s much more to learn, but for now, this should provide the basis for you to confidently step into the future. Your entire adult life is ahead of you, so go ahead and experience the adventures that adulthood has to offer!

Check out our Instagram page for more bite-sized financial tips!​​​

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