Most personal finance stuff on the Internet sounds like it’s targeted at fifty year old towkays with piles of cash in the bank just waiting to be invested, and a few investment condos with mortgages they should probably be refinancing soon.
As a 20- or 30-something Singaporean who occasionally gets rejected by the ATM machine when trying to make a withdrawal and who thinks of officewear from G2000 as an “investment”, you couldn’t care less about advice to diversify your investments or look out for property deals.
As someone from Generation Y, there’s a higher chance you’re a uni grad than your older counterparts. You’re media savvy, you probably won’t be getting married or having a child at 23, and you’re living with your parents till you’re well into adulthood. Here’s some financial advice that applies to you:
1. Harness the power of the Internet to boost your income
While your parents didn’t have to cope with a ridiculously high cost of living back in the day, you have one thing they didn’t, and that’s the internet.
Millennials have myriad opportunities to make money off the internet directly or indirectly—whether by searching for jobs online, selling their belongings for cash on Carousell or kickstarting freelance gigs on the internet.
Instead of spending all your screen-time on Facebook, put that fibre-optic connection to good use and make some money with it.
2. Be realistic when it comes to weddings and buying a home
You would think that with all the hype about the cost of living being so high, people would be a little more sensible when spending on a wedding and buying and renovating their first home. Instead, you read stories like this.
A friend of mine recently complained that he was spending $50,000 on a “small” wedding and shuddered to think how much a big one would have cost.
Then you see young couples, often PMETs with healthy salaries, who have barely any savings because they’ve exhausted everything on a condo with all the bells and whistles.
Unless you want to spend the rest of your life slogging away to pay off gargantuan debts, be realistic and don’t overextend yourself. If you had to pick having a fairytale wedding and retiring a few years early, which would you choose?
3. Consider repaying your student loans as soon as possible
Getting educated at local unis is becoming more and more expensive. A four year undergraduate degree at NUS now costs over $30,000. If you’ve taken a tuition fee loan, you’ll need to start repaying it within two years of your graduation.
Paying back the minimum amount of $100 a month sounds easy peasy, but if you’re free of financial commitments like housing loans or kids right now, it’s a good idea to pay off those loans as soon as possible. When your obligations increase, you may no longer have the option.
The faster you repay your tuition fee loan, the less interest you pay. The only valid excuse is if you’ve got investment plans for the money that will earn you more than the interest.
4. Avoid being irresponsible with money when you’re unmarried and childless
As a millennial, if you marry and/or have kids, that’s probably going to happen at a later age than it did for your parents.
That means you can also safely delay financial commitments like shopping for a roof over your head and earning enough money to keep screaming kids alive to a later age.
In the meantime, what do you do? If you answered “spend all your money at Thai discos” or “collect Chanel’s entire range of handbags”, good luck.
While your salary might leave much to be desired in the early years of your career, these are also the best years for saving money as you’re not bogged down with financial obligations and are probably still living with your parents. Thanks to compounding interest, any sum you invest in your 20s and 30s, no matter how modest, will be worth a lot more decades down the road.
Fail to do that and you could end up like the people in this article, who are purportedly in their mid-30s and haven’t saved a single cent.
What are your biggest financial challenges as a millennial? Tell us in the comments!