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One of the biggest misconceptions in Singapore is that comprehensive financial planning mainly involves buying insurance, and that the way to do that is to spend hours laying bare your finances to an agent, only to have them tell you to sign up for something you later realise you don’t really need or understand.
But comprehensive financial planning is so much more than that. It is meant to give you a 360-degree, holistic view of your finances and help you with your future and retirement planning. When done right, it can even help you relieve your money-related stress, which, let’s face it, almost every Singaporean suffers from.
Don’t get me wrong, I’m not saying you should skip out on insurance. However, it is but one component of a comprehensive financial plan and should come after you have worked out your insurance gaps.
Still not convinced that it’s worth the effort? Here are five benefits of comprehensive financial planning that will most definitely make your life better!
Bonus: Scroll to the end to find out how to generate your own report online for FREE (without an agent). This is $0 for a limited time only and takes only about 10 minutes or quicker.
1. You get a big picture view
When handling our finances, it’s easy to lose sight of the big picture while diligently squirrelling a few dollars away here and there or rushing to grab discounts.
But it’s important not to lose sight of the forest for the trees. All that saving and investing is meant to help you achieve certain goals, and you need to have a big picture view of your finances in order to understand what those goals are and how you’re going to get there.
Taking a macro view of your finances is like looking at a world map instead of squinting to see a tiny red dot. Every financial decision you make should serve a larger goal and fit in with all the other components of your financial plan.
2. You are able to identify any gaps
It’s time to talk about insurance. As mentioned earlier, insurance is but one component of a comprehensive financial plan. But no financial plan can be complete without insurance. Everybody needs some form of insurance protection.
So, the question to ask is not whether you need insurance, but whether you are adequately covered. In addition, you should also consider whether you are over-insured or under-insured — it’s all about finding the right balance between getting the protection you need and spending reasonably on insurance premiums.
Besides the protection gap, you should also have a look at any other gaps which might be in your way of achieving your financial goals and retiring comfortably. Check your CPF savings and your investments for retirement and ask yourself if you’re on track.
Identifying gaps is so important because it’s the first step to doing something to fill them. And the earlier you spot gaps, the better. Having a longer time horizon makes it a lot easier to reach financial goals as compounding interest makes your invested money grow exponentially over time. The more time you have, the faster the money grows.
3. You are able to chart a course for a more financially secure future
So, you’ve taken a big picture snapshot of your financial plan and have identified the gaps. Your next step is to plot a course of action for your financial future. In other words, you’ll need to figure out how you are going to reach your goals and the steps you must take to get there.
Some examples of steps you might take include the following:
- Save a higher proportion of your income to build up your emergency cash
- Increasing your insurance coverage to ensure you and your family are well-protected against the unforeseen
- Invest a portion of your cash savings to meet your long-term goals
When you’ve got a game plan, you’ll be able to steer yourself to safety before you hit a potential storm, or upgrade your boat so you can have smoother-sailing adventures later.
4. You can plan for your shorter-term goals
Life is full of goals, both short-term and long. Going on holiday but not sure you have enough? Unless you plan to travel only years from now, this is likely to be a short-term goal.
Dreaming of starting a business? Want to get married or renovate your home? These might be medium-term goals.
How about raising a child or paying for your kid’s university education? Those are likely to be long-term plans if you’ve just gotten married or just started a family.
Having a comprehensive financial plan takes into account all these goals, and lets you identify if you have any extras or wiggle room for the mini short-term goals that are not essential but nice to have, as well as (touch wood) emergencies that can suddenly pop up in your life.
On the bright side, with a good plan and the discipline to follow it, you’ll find that you no longer need to scrimp and save unnecessarily. You’ll also have a clear idea of how much you can spend, which prevents over-splurging. Overall, you’ll just be in much better financial health.
5. Reduce your financial stress
If you follow points 1 to 4 above, you’ll most likely be rewarded with reduced financial stress.
You’ve now got a proper road map with the appropriate actions to take. You’ve also done the math and figured out how much you need to put aside. So you can now feel more at ease and more confident about your finances.
With less stress and a lighter mental load, you’ll be able to live a happier life and redirect your focus to what matters to you, like your friends, family, pets, hobbies, passions and community.
Stress can also be a source of sickness, so you might find yourself feeling healthier. And if you’ve been having money-related arguments with your loved ones, you can expect this issue to ease off, too.
Generate your own Comprehensive Financial Planning report online for FREE*
- MoneyOwl is having a promotion to make it easier to get your finances in order. They are now offering a FREE Comprehensive Financial Planning report (usual price $99)! Yes, you heard that right, it’s free!
- The offer is valid till 31 Jan 2023 and open to the first 100 new MoneyOwl clients who complete the comprehensive financial planning journey using the promo code MSM422.
- As an added bonus, MoneyOwl is also giving out a $5 Grab voucher to each eligible client who signs up via MoneySmart.
Just so you know, MoneyOwl is an NTUC social enterprise, whose mission is to help Singaporeans make wiser financial decisions and live their best lives. They have a no-commission model, so all products are recommended to you in good faith with no agent kickbacks. Your personal details will be securely stored on MoneyOwl’s platform, which has undergone rigorous penetration testing and meets technology risk management guidelines set by MAS to ensure the highest security and data protection.
MoneyOwl has also achieved the Centre of Excellence for Comprehensive Financial Planning Certification from the Financial Planning Association of Singapore, putting them in a good position to help you with your finances.
Some accolades MoneyOwl has received include the SBR Technology Excellence Awards 2020, the Social Impact Award at the Singapore Fintech Festival 2021, and the inaugural Centre of Excellence for Comprehensive Financial Planning Certification – Star Award 2022 by the Financial Planning Association of Singapore.
Here’s a quick peek at what the MoneyOwl free comprehensive financial planning report (worth $99) looks like:
When you complete your comprehensive financial planning journey, you get a customised report (no consultation included) with the following information:
- a detailed breakdown of your current financial situation
- the tools required to achieve your future goals
- steps needed to optimise your CPF payouts
Getting started on your comprehensive financial planning is even faster if you link your SingPass/MyInfo — your report could potentially be generated in about 10 minutes or less.
What’s more, MoneyOwl’s comprehensive financial planning is integrated with national schemes, so your financial plan will take into account your CPF savings and projections. Based on your desired retirement age, the MoneyOwl CPF Analyser can accurately predict your future financial situation.
As an added bonus, MoneyOwl is also giving out a $5 Grab voucher to each eligible client who signs up via MoneySmart.
This is one freebie that could put you in a better financial position for the rest of your life. Claim your FREE Comprehensive Financial Planning report from MoneyOwl.
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