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While most people will acknowledge the importance of planning for our financial futures, there is usually some hesitation when it comes to working on it.
Proving this point, the OCBC Financial Wellness Index 2024 found that 44% of Singaporeans are investing towards their financial goals. Read another way, it shows that majority of Singaporeans, nearly 6 in 10, are not.
This Can Prevent You From Living Your Best Life
The cost of delaying plans for our financial futures can force us to make sub-optimal decisions. For example, even after finding success as a finalist in the first edition of MasterChef Asia in 2015, Lennard Yeong put his culinary dreams on hold to go back to work in the engineering sector.
He shared on a video, shot in collaboration with OCBC, that he initially sought comfort in a stable salary. Without starting to plan for his finances, he may never have had the confidence or ability to pursue his ambitions in F&B.
Today, he is working in the F&B sector, and has even recently opened Har Har Chicken – a restaurant specialising in har cheong gai (or fried chicken marinated in prawn paste).
He attributes the “ability to start small across a wide range of investment solutions” as one of the reasons he gained the confidence to start charting his own path.
If, like him, we have not started planning and investing towards achieving our financial goals, breaking the process down into three steps can help us gain clarity of our financial situation and crystalise the actions we need to take.
#1 Know Where You Are At
Before we start to make any investments or personal financial moves, we first need to understand our current financial situation.
SGFinDex can conveniently help us access our savings, investments, insurance protection across different financial institutions – including participating banks and insurers, and government agencies, such as CPF, HDB IRAS and SGX CDP.
On its own, the SGFinDex may not be entirely useful. This is how we can make use of the OCBC Financial OneView to gain not just an overview to track our finances, but personalised insights on growing our wealth with investments and learning if we are underinsured.
All screengrabs are taken from OCBC app and website
For example, I can view a snapshot of my overall personal finances as well as the financial products I have bought, across the various financial institutions, all in one place: on my OCBC app.
This includes income from my yearly submissions to IRAS, savings across participating banks and CPF, what I owe across participating banks and HDB (if we have taken a concessionary HDB Loan), and the insurance coverage I have (which I realised I haven’t synced).
Besides gaining a broad view of our current financial situation, we also have to learn how to improve our money habits. This is where OCBC’s Money In$ights tool can show us how much money is coming in and going out each month.
Personally, I can see that while I generally spend less than what I put into my OCBC savings account, there are months when a major expense might be incurred.
On top of the information on cash inflow and outflow, OCBC also automatically categorises our expenses, so we can learn exactly what we are spending our money on – and where we need to cut.
My main expenses were funds transfer (which accounts for many of my major bills paid via another account), as well as Bills & Utilities and Cash Withdrawals. If you haven’t already guessed it seeing how I use my OCBC bank account, it serves as a main savings account, and I have another account for my daily transactions.
#2 See Where You Aspire To be
Most of us will have both long-term financial goals, such as building a retirement nest egg or saving for our children’s future education, as well as shorter-term savings goals. This can be anything from stashing away a rainy day fund, planning a trip, buying a car, or something else.
For our long-term goals, we can make use of the step-by-step guide that OCBC Life Goals provides. It will take all of about five minutes to complete and gives us a comprehensive understanding of what we should be planning towards.
As you can see in my retirement plan, I will need S$611,443 for my retirement. For reference, I tried to use the a modest retirement lifestyle as a gauge for how much it may cost me. Because my financial data can be pulled from CPF, I can also get a reference for the monthly CPF LIFE payouts I can expect in my retirement.
I also have two young children and decided to also plan for their future education costs. Besides inputting details for my children, OCBC Life Goals’ step-by-step planner also gives us an estimate for how much it will cost based on our children’s age, preferred course of study (General or Medicine, which will obviously cost more), and even preferred country to study.
#3 Get Ahead With Confidence
Getting an overview of our finances can help us trim any unnecessary spending and improve our money habits, while going through the step-by-step goal planning should give us a good gauge of how much we need to accumulate in savings and investments.
The final step in this process is making the appropriate investments. While OCBC RoboInvest offers a diverse range of investments, we need to decide for ourselves what is most suitable.
Arguably, this is the most valuable part of the journey we can take with OCBC – to actually build towards our financial goals.
On the OCBC app, we have access to diverse types of investments that cater to all types of investors – from those just beginning to learn about it to those who may be much more knowledgeable.
Source: OCBC website – Types of investments we can make
Savvier investors may prefer self-directed investments in Equities & Treasury and precious metals such as Gold and Silver. Such investors can also leverage on Foreign Exchange solutions, not just for travel and online shopping, but to save in foreign currency fixed deposits or invest in stocks listed in foreign currencies.
Individuals who need more hand-holding can opt for Unit Trust or even RoboInvest portfolio – buying into investment products that are managed on our behalf.
While investments grow our wealth, insurance can protect us and our loved ones against unpredictable circumstances. Via our OCBC app, we can also learn about protection coverage we ought to have – including Endowment Plans, Life Insurance, Critical Illness Insurance, Personal Accident Insurance, Disability coverage and more.
We can learn more about these products on the OCBC website, and also buy directly via our OCBC app.
Aim For Small Victories; Build Towards Your Biggest Life Goals
It’s easy to feel overwhelmed in the face of large financial goals. Saving for a downpayment on a dream home or building a pot of savings for our young children’s university education can feel unattainable, let alone planning for a retirement 25 to 30 years down the road.
The truth is, financial planning is an ongoing process that evolves over time. Waiting until we feel “ready” will only cause unnecessary delays, and may cause us to miss out on the benefits of early action.
By breaking down these financial goals into smaller bite-sized goals, we no longer need to be intimidated to start the process. To help us plan and get ahead, we need to find the right partner to plan our finances with us.
With OCBC, we don’t just have a financial planner at our fingertip, we have access to the tools that can help us along each step:
1) knowing our current financial standing,
2) seeing what our aspirations will cost, and
3) being confident to plug the gaps in our financial lives
From now till 31 December 2024, enjoy up to S$908 in cash rewards on selected investments and insurance products – ranging from Unit Trust, Roboinvest, Precious Metal, Foreign Exchange, Explorer travel insurance and GREAT Term Guard. New customers can get up to S$50 extra cash for each product. T&Cs apply, limited quantities of cash rewards available.
Disclaimer:
This advertisement has not been reviewed by the Monetary Authority of Singapore. Investments are subject to investment risks, including the possible loss of the principal amount invested. This is for general information and does not take into account your particular investment and protection aims, financial situation or needs. You should seek advice from a financial adviser before committing to a purchase. Otherwise, you should consider the suitability of the investment. Protected up to specified limits by SDIC. GREAT Term Guard and Explorer Travel insurance are provided by The GREAT Eastern Life Assurance Company Limited.
The post Nearly 6 In 10 Singaporeans Are Not Investing Towards Their Financial Goals: How You Can Start Your Investment Journey In 3 Steps Now appeared first on DollarsAndSense.sg.
