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Money Matters

Which financial advice should you follow

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Our first financial advisors are often our parents and it’s only normal that we plan our finances based on the wisdom they impart to us. After all, they “eat more salt than you,” right?

But here’s the thing – while most of our parents’ financial values may have worked in their favour in the past, not all of it may be applicable today. So, how much of the older generation’s financial advice should you follow to kickstart your financial planning journey? Let’s unpack some of them, shall we?

Common financial mantras our parents lived by

Our parents have drilled countless financial tips into our heads growing up to help us achieve financial independence in the future. Here are three common ones which may, or may not, be applicable in 2020 (and beyond).

Have 3 to 6 months of emergency funds

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From coin boxes to opening our first savings account, our parents have constantly instilled the need to put something aside for a rainy day. Having sufficient funds to tide us through times of uncertainty is so relevant to this day. For example, the COVID-19 pandemic saw many Singaporeans lose their jobs or a significant portion of income. Without sufficient emergency funds, it would be difficult to navigate the headwinds, even with government subsidies.

In the past, our parents would keep aside 3 to 6 months of emergency fund. But is that enough to cater to rising costs of living? Let’s not forget that Singapore is constantly rated as one of the most expensive cities to live in!

While there is no one-size-fits-all approach, with rising costs of living, experts have recommended setting aside 6 to 9 months’ worth of expenses so you’ll be financially prepared for unexpected circumstances. The important thing to note here is that the funds must be liquid in order for you to utilise them during an emergency – and during an emergency only.

A simple way to calculate the amount you need: add up the amount of money you use monthly to pay for necessities and commitments such as food, groceries, your student loan, and transportation fees, and multiply the total by the number of months you intend to save an emergency fund up for.

Here’s an additional tip: Save your emergency funds in a high-interest savings account (0.5% p.a. and above). Not only can you withdraw at any one time, if you do not use the money, it will keep growing thanks to compounding interests. Win-win, amirite?

Only invest in low-risk investments – Always play it safe!

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Understandably, our parents would want to protect us from taking risks which can negatively affect us (or our pockets). Hence, they would advise us to put our money into .  These are undoubtedly good ways to grow your money in the long-term and accruing moderate returns.

Higher-risk investments like stocks and cryptocurrencies, on the other hand, could offer higher returns over the same period, or shorter. The higher the risk, the more you can gain – and vice versa. Makes sense? Having said that, if you are unfamiliar with these vehicles, you should avoid jumping blindly into it as the downsides could be substantial – and this is where our parents’ worries lie.

Before you invest, the best thing is, as your parents would advise, to do your homework. Review the types of investments available, understand what it means to invest in them, and explore the best strategies for investing in each vehicle. With immediate access to information at our fingertips and a wide range of financial tools available online, these can help us make better and more informed choices. Getting advice from professionals before you embark on this journey can also help to remove any doubts and ambiguity and get you started on the right track.

Next, understand your risk tolerance – ask yourself, are you ready to see a loss in your principal investment amount? Rule of thumb: Don’t take unnecessary risks. Take calculated ones. Diversifying your investment portfolio such as across different risk levels and investment types will help you mitigate risks, and well, you would be playing it safer.

And lastly, review and optimise your portfolio. You should review your financial plans regularly to ensure it is optimised based on the current market trends and relevant for your evolving needs and preferences.

Compare prices and look for cheaper alternatives

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Your parents might constantly be reminding you to spend less or buy the cheaper option. But here’s the thing – cheaper is not always better. Buying the wrong product might lead to a lot of frustration and you could end up spending more in the long run, especially if it’s a big-ticket item.

For instance, you may want to spend a bit more for a better set of headphones that wouldn’t compromise your music player’s sound quality or even people’s voices when you are on a conference call.

Nevertheless, you should still spend within your means – which is another thing our parents always stress on. In every purchasing decision you make, use the 50/30/20 rule to help you mind your spending. The 50/30/20 budgeting model is where you split your budget into 3 parts:

  • 50% goes to necessities (food, transport, mobile phone bills, etc.)
  • 30% goes to discretionary spending (movies, holidays, gifts, hobbies, etc.)
  • 20% goes to savings and investments

It is important to do your research and compare not only prices, but also features, and make it a habit to read unbiased reviews online. You should also take into account what you need versus what you want. Like a computer – do you need one with a 4K screen, or is Full HD more than enough?

As a consumer today, being able to buy pretty much anything online makes product comparison a lot easier. You wouldn’t have to physically go from shop to shop to ensure you get the best bang for your buck. Furthermore, buying things online may be cheaper since there are fewer overhead costs to the seller.

Becoming financially savvy in changing times

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Times have evolved since our parents were kids and the value of money has changed as well. Our parents could probably buy a cup of coffee for $0.40 20 years ago, but today it can cost more than $5 at a nice cafe.

To be good at financial planning in Singapore in this day and age, you’ll need to be financially savvy. Reading up online and listening to different opinions help – just be sure to get them from trusted sources. Essentially, there are two aspects that you need to be clear about:

Have clear financial goals

Saving with no goal in mind is one of the most common mistakes we make. Sometimes, we save just because our parents tell us it’s a good habit to have and not think further than that. To be truly financially savvy and independent, it is crucial to have clear financial goals of your own.

Here’s a good place to start: Think about the kind of lifestyle you want to live and what financial independence means to you – the ability to travel more regularly? No longer needing to live paycheque to paycheque and instead have the opportunity to do something you love? Or maybe financial independence means something as simple as being debt-free?

Through smart budgeting, you can build up your savings, grow your net worth, and live a life that you will enjoy. Make a plan, stick to it, work towards it. Knowing exactly what you want and where you are headed will help you work out a sound financial plan.

Where you save matters

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Being financially savvy is also knowing where to place your eggs – and they shouldn’t all be in one basket. Here’s a fact nugget for you – it is safer to place your money in a high-interest savings or current account.

For example, the JumpStart* savings account offers up to 2.5% p.a. interest for account balances up to S$50,000. What’s more – JumpStart customers will receive a Cashback debit card which can offer them up to 1% p.a. cashback (capped at S$720 per year ) on qualifying transactions. Saving – and earning – from shopping? Yes, please!

With the Bonus$aver current account, you can earn up to 7.88% p.a. interest on your first S$100,000 eligible deposit balances when you spend, credit your salary, insure or invest – that’s up to S$7,880 bonus interest a year.

Be sure to pick accounts which would be able to address your needs and will benefit you most. After all, this is your first step to financial independence.


Financial values from earlier generations may not be as relevant as they were before, but that doesn’t mean they do not carry any more weight. You’d just need to tweak their advice to fit today’s context and also your financial goals. One thing’s for sure though – the sooner you start your financial planning journey, the longer you will get to enjoy those compounding interests. As our parents often say, “the early bird gets the worm.” Now, that’s a piece of advice you should be following!

This article is brought to you by Standard Chartered Bank (Singapore) Limited. All information provided is for informational purposes only.

Deposit Insurance Scheme:

Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.

*Please visit for full terms and conditions of the JumpStart account Product Terms.

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