The 3 Most Important Financial Goals You (Or Your Child) Should Fulfil Before Turning 21

3 most important financial goals before turning 21

Joanne Poh



There’s been a lot of talk about financial goals for your twenties, thirties and beyond, because it’s assumed you actually have some money at that stage.

But what about when you’re in your teens, on the cusp of adulthood but still very much dependent on mum and dad? Is it best for teenagers to just bide their time until they’re forced out into the real world?

Not if you consider the fact that many young people’s financial habits are formed in youth, and there is research to suggest that many youths mimic their parents’ money habits even in adulthood.

I’ve seen many kids, particularly those who go to schools populated by children from affluent households, who simply assume they can just go to medical school or law school when they graduate, and that they’ll be set for life. Inflated lifestyles are viewed as a mark of prestige, and financial planning is viewed as unnecessary if you’ve got enough to go around.

Of course, many of these kids enter the real world and then discover that life, work and money aren’t quite as cushy as the characters on Gossip Girl would have you think.

Here are 3 financial goals teenagers should set for themselves:

1. Earn your first dollar

Even if your parents are loaded or say you should just focus on your studies, earning your first dollar as a teen can change the way you think about money as an adult.

Whether you’re tutoring younger students, working as a waiter or interning at your dream company is immaterial. It might sound like a cliché, but the truth is that it’s really hard to start thinking of money as something that should be conserved unless you know what it’s like to earn it.

The first few weeks on the job probably won’t make that much of a difference, but over time you’ll know what it’s like to build up savings.

Grandmother story time: I took on my first part-time job when I was 16, tutoring a primary school kid five years younger than myself. Over the years, I’ve waited tables, run around Orchard Road trying to sell stuff to people, distributed flyers, tried to control hoards of screaming kids who spoke no English and typed up documents in the home of a 67-year-old man.

Still, it took years before I fully realised how important it was to manage money. Building up a small stash of savings, even if I wasn’t that focused on growing it at the start, eventually made me realise the importance of having an emergency fund, no matter how small. Because I always had a bit of money in the bank as a student, when I earned my first post-university money ($1,300 a month if anybody’s interested) I scrimped and saved at least half my salary despite the dismal amount, because not having savings just wasn’t an option.

Besides, earning money as a student can be a lot more fun than working as an adult. I just know there was a lot less backstabbing and ass-kissing at the restaurant I worked at as a kid than the offices I worked at as an adult.

2. Come up with a plan to finance your tertiary education

If you’re still a teenager, chances are you’re planning to continue your education at some point, perhaps at a university, polytechnic or other institution. That costs money and will probably be your (or your parents’) heaviest investment in yourself to date.

Most students don’t really think about what they’re going to do until their O level or A level results are out, and when the time does come the main issue on everyone’s mind is whether they can get into their course of choice.

Unless you know for sure your parents are going to foot the entire bill for you, it’s probably a good idea to do some research on school fees and the financing options open to you.

If you’re studying at a local university like NUS, NTU or SMU, you might be eligible for a Study Loan, which will be payable in installmenets when you graduate, or the CPF Education Scheme, which deducts the cost of your education from your parents’ CPF funds but must later be paid back.

Don’t roll your eyes and say that you’re going to graduate only 5 years from now and will be ancient by then.

When the time comes to repay your study loans, you’re going to have to pay back a not inconsiderable sum of money each and every month. This might mean you’ll have to scramble to find a job after you graduate. Taking your time to choose a job or exploring riskier career options will have to take a backseat.

And as you’ll soon discover, the typical salary of a fresh graduate isn’t really as high as the reports make it sound when you factor in CPF deductions, having to pay for expenses like phone bills and the cost of commuting and lunch at work.

This means that if you start saving up for your education now, your study loan repayments are going to be a lot less painful when you graduate. If you’re a really assiduous saver, you might even be able to pay your school fees without taking out a loan at all, which will let you graduate completely debt-free and save you some money in interest to boot.

3. Become conscious of your spending habits

It’s unsurprising that few teenagers have a budget, since it’s assumed you can’t buy much with a few dollars a day anyway. Hence, you might be a bit deflated to learn that there are actual adults trying to live on $20 a day, and that they need a strict budget to get them there.

However, based on the number of students I see at Starbucks, surfing blogshop websites and hanging out at movie theatres, many do have a fair bit of disposable income, which means putting in place a budget is probably a good idea.

This could be as simple as allocating a fixed amount each month for food and entertainment, pledging to save a percentage of your allowance or drawing up a more detailed budget.

The most important thing is that you become conscious of your spending habits, and aware that you are to a certain degree able to control how much you spend.

This is something many adults are unable to do, based on the number of people who roll over their credit card debt each month.

Don’t be like those Singaporeans who blame everyone but themselves for the fact that they can’t save money, and then go out and buy a car to impress their friends. Sure, life is tough, but you’re not totally powerless over your finances either. And the sooner you realise that, the better.

If you’re a teenager, have you set any financial goals for yourself? If you’re an adult, what financial goals did you have as a teenager? Let us know in the comments!

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Joanne Poh

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.