5 Money Mistakes Young Singaporeans Do & Ways to Avoid It

5 Money Mistakes Young Singaporeans Do & Ways to Avoid It

TL:DR?
5 money mistakes millennials always make and ways to properly save

Money management is one of the sexiest things to think about when you’re young and… living on planet Mars.

Not many people get a kick out of managing their money, but think about it this way – if you don’t learn to manage it, it’ll turn round to manage you.

Here are some of the most common mistakes made by young Singaporeans and what you can do to get a little more savvy with your pennies.

saving-money

1. Not Having a Budget, or Not Keeping to It

Not having a budget can be very liberating, and the initial burst of financial freedom that comes with earning your first pay cheques need to be relished.

It only becomes an issue when the “celebrating your first job” just never seems to end, even when you’re five years past your graduation date.

Having a budget is one of the most important things you need to do as it helps you to keep track of where your money is going and provides a reality check on your finances.

Keeping to your budget is the homework equivalent for adults – there’s a limit to how many times you can get away with it before Karma sends debt reminders down your mailbox.

One of the best ways to keep to your budget is to be committed to tracking your expenses. There are plenty of apps that help you do that, so there are really no excuses.

2. Not Saving Now Because You Think Your Income Will Increase Anyway

For the young and invincible employees, it may seem that the sky is the limit and that there is nowhere to go but up.

While that’s quite likely to be the case, this thought pattern can be very tricky to work with because you may fall into the habit of upgrading your lifestyle at any chance you get, thinking you’ll have more in future.

Furthermore, you can’t really be sure that your career path is one that is going to be rosy for the next three or four decades. Employment trends are changing ever so frequently and guaranteed employment is history.

You may also in your course of life want to change career paths or simply need a large chunk of cash to meet a financial commitment.

Saving what you can today, not tomorrow, helps you to cultivate a healthier relationship with money.

3. Not Having Health Insurance

Ironically, young people may skip the health insurance, preferring to spend that money elsewhere instead, thinking that they are invincible.

Insurance 101
The best time to get health insurance is when you’re still fit and healthy, and hopefully free from any chronic illnesses which may make medical insurance a very expensive affair.

There are many forms of health insurance with varying premiums, and you can get medical insurance from about S$200 annually, and that gives you a peace of mind about hospitalization, surgery and some outpatient costs should the need arise.

4. Hoarding and Not Investing

On the other end of the spectrum are young Singaporeans who are so good at saving every money that they are practically hoarding cash.

While this may seem like a great habit to have, it also means missing out on opportunities to invest while time is on their side.

With fewer financial obligations, possibly no mouths to feed and no mortgage to pay yet, youth is one of the best periods to learn about investing and to take advantage of the compounding effect because you can take on more risks.

A breadwinner of a family may not be able to take the same risks as you do because they have financial dependents and other financial commitments to take care of.

It’s not just about investing in shares, bonds, and equities.  Your younger years are some of the best years to invest in developing yourself.

Yes, that means investing in courses and classes that interest you and that add knowledge and meaning to your life. It also means investing in your health by spending a little more on eating healthier foods, and trying out new sports and hobbies.

5. Going Overbroad with the #YOLO Philosophy

‘You only live once’ is a very sobering reminder of our mortality and a beautiful thought to keep in mind when we hang on too much to our anxieties for tomorrow.

Unfortunately…

Many young people seem to take it as a license to spend in such a way that it actually causes anxieties for tomorrow.

It’s true that certain experiences cannot be repeated and that we never know how much time we really have left, but if your free spending isn’t sustainable and doesn’t bring you happiness and contentment, then surely your money isn’t going in the right place.

As with most things in life, finding the balance is key, and that includes managing money too.

Apply the #YOLO philosophy into areas of personal development instead of instant gratification and you may just find yourself using your money in a more meaningful way.

Last but not least, why not get a credit card that can suit your #YOLO lifestyle and help you to save with up to 8% rebate all day and all night!

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