Savings Goals

Lee Siew Ching, personal finance

Did you know that people who set savings goal save faster than those who don’t?

What should I save for?

Prioritise saving for emergencies and retirement. Then, save for life events such as housing, marriage and education. After this you may set goals for things like vacation, big item purchase and so on.

When should I start saving?

Start saving as soon as possible to start earning interest. The earlier you start, the greater the potential benefit of compounding. Want to know how this works? Read more here.

How do I start saving?

Step 1: Set savings goal
Step 2: Figure out how much to save
Step 3: Start saving!
Step 4: Monitor savings and review goals

Where should I save my money?

Where you should save your money depends on the savings goal.

For emergency savings, you should save in an account where you can quickly withdraw the money like a fixed deposit or money market.

For retirement savings, you should invest in an account that can beat inflation. The younger you are, the more you can afford to invest in risky investments. Due to inflation, savings accounts and fixed deposits are not a good place to save for retirement. A good place to invest your retirement savings is in EPF, PRS, unit trust or other investments.

As you grow older and get close to retirement, you should implement an exit strategy by reallocating to less risky investments.

Want to learn more about investing in unit trust for your retirement? Check out PRS and Retirement Planning.

© Lee Siew Ching.RSS