3 things all Singaporean millennials must know about their finances

01 Feb 2017 

As a 29-year-old, I fall into the age category that conveniently labels me a 'millennial'. If you too, are part of my generation, you've probably heard all this before: you're idealistic, entitled, and easily bruised like a strawberry.


These are all common sentiments many seem to share regarding the millennial generation. But speaking as a millennial myself, I believe these are actually the result of some of the underlying core traits and values that we millennials collectively share.


A yearning for a job that allows us to feel fulfilled, a desire to partake in meaningful experiences, and an almost crippling fear of living a robotic life devoid of meaning. It doesn't help that we believe we are unique and strive to differentiate ourselves from the crowd, yet constantly seek acceptance from our peers.


I could go on about my generation's motivations and what drives us – but this article is about the one thing that really determines how successful we are in navigating the world as millennials. I'm talking about money. Our money, and what we do with it. If there's one thing we are painfully aware of, it's the fact that at the end of the day, we live in a world where money largely determines how we live our lives.


#1: A Singaporean paycheck is unique


Let's start with the most basic form of income that most of us look forward to every month – our monthly paycheck. The one unique thing about being a Singaporean is that a portion of our paycheck goes into our CPF accounts.

3 things all Singaporean millennials must know about their finances 1.pngWhile this means less take-home pay, in the grand scheme of things, we will accumulate savings that grow significantly over time with the compound interest earned in the various CPF accounts.

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#2: Budgeting is becoming a part of our lifestyle 

As millennials, we tend to prefer buying things or experiences that add to the richness of our daily life. Instead of aiming for a flashy sports car or the latest condo, we're more likely to buy into soul-searching travel or a new gadget that allows us to escape the daily drudgery.


As a result, our budgets are often more fluid as we spend more to enrich our daily experiences.


Yet at the same time, it's important for us to plan for the longer-term. The question is, how do we structure our budgeting style to cater to all of these needs?


Rather than plan everything down to the dollar, I personally find it easier to stick to a general budget and make tweaks as and when I think is necessary. Just like everything else in life, I refuse to be tied down to something inflexible. In short, my budgeting is part of my lifestyle.


Here's how I typically plan my own budget, using the 50-30-20 rule as a guide: 

3 things all Singaporean millennials must know about their finances 3.jpg 

Some months, I spend less on necessities and splurge on my wants instead (in my case, usually for another holiday). Other months, I may stock up only on necessities. This then leaves me with extra savings that I can put towards my financial goals such as retirement.


#3: Planning is a must in an uncertain world 

I personally thrive on change and I like surprises. I suspect many fellow millennials would pick new possibilities over boring, mundane routines any day. But I tend to prefer less risk when it comes to my money and wellbeing.


Today, long-term plans no longer imply that the future is set in stone. Instead, they're about ensuring a reasonable amount of security in an uncertain world.


In the financial context, the first step is to set a goal in mind for three key scenarios that all of us will face at some point or other: buying our first home, taking care of our healthcare needs and preparing for our retirement. There are several calculators available to help estimate realistic figures for each. If you're curious, you can even compare your savings and growth with others your age via the CPF Starter App, which also helps you navigate your CPF accounts and transactions.


It's easy to get daunted, but it really is a matter of time and persistence – as much as we're conditioned to live in the moment, patience is key here. Even a small sum will eventually accumulate and grow through compound interest.

3 things all Singaporean millennials must know about their finances 4.png 

Of course, as mentioned earlier, in addition to cash savings, our CPF savings will make up a part of our long-term plan. Other forms of investment, such as through stocks, bonds, and so on, are possible options to look into for long-term returns.


So are you keeping your eye on your money? 

The typical millennial isn't going to spend hours fretting over where every cent goes. But we do care about our money. Not only because it largely dictates how we live our daily lives, but also because it will shape the way we plan for our future goals. Above all, having a good handle on our money – or at least knowing how we're spending and using it – will give us the satisfaction of knowing that we're independent, responsible, and taking charge of our own lives in our own way.


For more tips on managing your cash flow, download the CPF Starter App here. Only available on iTunes app store.


Ann Chan is a full-time writer who covers a variety of topics including personal finance and money management. Between deadlines, she is constantly on the lookout for new ways to help readers make and grow their money.

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