The Financial Astronaut
The Financial Astronaut
While starting your first job in Singapore is an exciting milestone, it's as crucial to manage your income well. Budgeting aids in the early development of financial stability due to rising living expenses and financial obligations such as CPF contributions. Here's how to make a good budget that works for you, whether you're saving for a BTO, making investment plans, or simply attempting to control your everyday spending.
Too little savings, unforeseen bills, or excessive spending are problems for many first-time earners. A budget aids you in:
✔ Reduce expenditures and stay out of debt
✔ Establish sound financial practices for long-term security
✔ Save for important life events like housing, travel, or additional education.
This methodical, uncomplicated strategy can help you manage your money effectively.
Here is a straightforward, step-by-step method to help you properly manage your finances.
Your salary isn’t just what’s stated in your job contract—you’ll need to account for deductions like:
1.CPF Contributions – 20% of your salary goes into CPF (with an additional 17% from your employer)
2.Taxes – Singapore has a progressive tax system, so check IRAS for your estimated tax rate
3.Other Deductions – Loan repayments, insurance, or company benefits
Your net income (after these deductions) is what you’ll use to budget for expenses and savings.
Singapore has a high cost of living, so it’s important to understand where your money goes. Categorize your expenses into:
1. Needs – Rent, food, transport (MRT, bus, Grab), utilities
2. Wants – Shopping, dining out, streaming services, gym memberships
3.Savings & Investments – Emergency fund, insurance, retirement
Use budgeting apps like Seedly, OCBC Money Insights, or a simple Excel sheet to track your spending.
A common budgeting framework is the 50/30/20 rule, which divides your income into:
✅ 50% Needs – Rent, utilities, food, transport, phone bills
✅ 30% Wants – Dining out at hawker centres, cafes, shopping, entertainment
✅ 20% Savings & Investments – Emergency fund, CPF top-ups, SRS, insurance, stocks
Since Singapore has a high cost of housing, if rent takes up a large portion of your income, you may need to adjust the percentages accordingly.
Having an emergency fund is essential because living in Singapore may be costly. Aim for three to six months' worth of spending to cover unforeseen expenses such as urgent trips, medical bills, or layoffs. Over time, even a modest monthly investment of $100 to $300 can create a robust safety net.
With a steady paycheck, it’s tempting to upgrade your lifestyle—buying a car, getting the latest iPhone, or dining out at high-end restaurants. But in Singapore, where a COE alone can cost more than a car itself, these expenses add up fast. Be mindful of lifestyle inflation—where your spending rises as your income grows. Prioritize financial security over short-term luxuries.
Singaporeans often focus on long-term financial planning, so consider:
1.Buying a BTO or Private Property – Start saving for the downpayment early
2.Investing for Retirement – Explore ETFs, REITs, robo-advisors, and CPF top-ups
3.Getting Insurance – Health insurance (MediShield Life, Integrated Shield Plans) and critical illness coverage are essential
Your first paycheck gives you financial independence, but how you manage it will shape your future. In Singapore’s fast-paced financial landscape, budgeting ensures you stay on top of your expenses, save for your goals, and grow your wealth over time. Start small, track your spending, and adjust as needed—your future self will thank you!
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