“I work all night, I work all day, to pay the bills I have to pay. Ain’t it sad.”
“And still there never seems to be a single penny left for me. That’s too bad.”
The opening lyrics from that ABBA money song certainly rings a bell for every working class individual. Me too.
I remember my favourite bowl of ‘Bak Chor Mee’ only cost me $2.50 ten years ago. Fast forward to present day, that same bowl of noodle now sets me back for 4 bucks a pop.
It’s also obvious to me that uncle has been reducing my portion of ‘Mee Pok’ over the years; while I am paying more, year on year!
Photo Credit: KF Seetoh
Okay peeps, using this real-life case study, it’s an undeniable fact that prices of goods and services will just keep going up over-time; while our monthly salary resembles stale bread, our purchasing power is also eroding more than ever.
Yup, it sucks. And inflation is really not a friendly word if you don’t have a lot of money in your savings account.
Amongst all these, many young couples in Singapore struggle to save enough money for their wedding, their first home and the renovation expenses that come with it.
But hey, don’t let all these scare you because as long as you make an effort to boost your savings, the prospect of realizing your dream home is really not that tough after all.
Doubtful? I’m sharing with you these 10 no-horse-run strategies to afford your first home!
1. Set a Savings Goal
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Corny and almost old-school as it may sound, but my mama always tried to instill this good habit in me for a good reason because it works! Seems like she really does know everything.
I kick-start by estimating my monthly expenses. From there, I put the amount aside and the rest of my salary into the savings account. So simple right?
A good number to start with would be to save 15% of your monthly income, so if you and your partner are each bringing home $3,000 (after CPF deductions), both of you can save $900 every month.
After a year, taking into consideration your 13th month AWS, total savings will come to $11,700! Don’t pray pray okay, five-figure sum within a year!
No-Horse-Run Tip – It’s better for you to set a percentage instead of dollar value so it doesn’t appear as intimidating. 15% versus $450. See the difference?
2. Be Meticulous About Your Expenditure
There are many expense-tracking mobile apps nowadays to keep a close tab on how and where your money is being spent on. No smart phone, no problem! You can still use the good old pen & paper, no excuses!
Start a habit of noting down your monthly spending – food, cosmetics, 4-D, clubbing etc. Also, I anticipate a string of expletives when you realise just how much these insidious things are actually eating into your disposable income.
No-Horse-Run Tip – Cut down unnecessary spending on the weekly 4-D, Toto and ‘Chiong-ing’. You could be saving another $300 or $400 more every month!
3. Make Preparations To Repay Your Loan
Photo Credit: The Straits Times
Going all the way? Then be prepared to make some sacrifices if the both of you plan to service a home or renovation loan. Say goodbye to the latest iPhone model and those regular short get-away trips.
Unless you are last week’s Toto grand winner, it’s likely you will obtain a loan either from the HDB or a bank when you buy your HDB flat. Depending on how much you’re borrowing and your age, a loan tenure could be as long as 25 years!
Hence, start early to beef up your savings account because the both of you would have to service loan repayments for many years to come. I won’t go into the loan details here but you could always go check out the differences between a housing loan from HDB and a housing loan from banks.
No-Horse-Run Tip – Singapore citizens should consider getting a concessionary housing loan from HDB because their interest rate is fixed at 0.1% above the current 2.5% CPF rate. So that means you will only pay a fixed interest rate of 2.6% throughout the entire tenure.
4. Kill All Credit Card Debts
Another sad but permanent feature of life in the red dot. If you have credit card debts, PAY THEM OFF ASAP. Just in case you were on vacation in Siberia for a long time, you really need to know their interest rates are murderous!
With credit cards, you are spending borrowed money. And it’s scary because every time you swipe your card, it’s like you are signing away your life. I’ve seen friends reduced to financial wrecks chasing an unsustainable lifestyle with credit cards.
Those unpaid amounts topped with monthly interests and late payment charges snowballs. Then come an avalanche of debt that will land you in a lot of trouble (think poor credit rating). All these will ruin plans for your first home.
As the popular Chinese proverb puts it “If you don’t have such a big head, then don’t wear a big hat.” Be sensible and live within your means! Know your needs and curb your wants.
No-Horse-Run Tip – Hold only one or at most two credit cards for emergency situations. Instill self-discipline and pay your credit card bills on-time, every time. If you have the urge to show off, flaunt your ATM cards or just use the ‘Platinum’ debit card instead.
5. Re-Route Your Bonus Into The Biscuit Tin
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“Got one month bonus. Ho say liao!!”
Hold your horses and don’t start dashing off for your shopping spree!
In case you got carried away – Remember your little MY FIRST HOME SAVINGS PLAN?
I know you’ve been working hard and I also know it’s tough because as humans, we tend to seek some form of self-rewarding momentary relief from the harsh realities of life.
But think long-term. Picture yourself and your spouse relaxing in a nicely renovated living room with sleek designer furniture…your first home beckons on the horizon!
No-Horse-Run Tip – Okay, don’t say I too extreme. It’s alright to pamper yourself with a little indulgence, but don’t forget to channel most of your bonus into the biscuit tin. Also, ask your Ah Ma for a biscuit tin that won’t rust easily.
6. Resist The Wicked ‘On Sale’ Advertisement
Photo Credit: The Straits Times
When I see the ‘One for $29.99, Buy 2 Get 1 Free’ message flashing at me, it’s really telling me to “Spend, spend and spend!”
Stores hold regular sales or offers as a way to ‘encourage’ customers to buy what they normally wouldn’t. I took advice from Jedi master ‘Yoda’, and learnt to resist the dark side that tells me “It’s such a great deal.”
I’m not saying you have to live like a miser. If it’s a good buy, go ahead and shop. But at least do it smartly. Know if it is really worth buying and not splurge unnecessarily.
I refrain myself from being an impulsive shopper. I buy for the life I have, not the one I want because every dollar saved means I’m a step closer to achieving my first home.
No-Horse-Run Tip – If you’re the type who gets easily influenced by peer pressure, then avoid going out in a group. Otherwise if someone buys an item, you could be persuaded to buy it too.
7. Give Up Expensive Habits
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Think it’s ‘Atas’ to be seen getting your regular caffeine fix at Starbucks or some high-class looking café? Think again.
A fancy cup of ‘Signature iced coffee blend served cold with smooth, balanced rich caramel flavours’ effectively means ‘Kopi Peng Ka Dai’ to me.
Comparing both, it makes more sense for me to pay only $1.70 for my coffee at the neighbourhood kopi-tiam. If I’m feeling adventurous, I could always order ‘Kopi Peng Gow Gow Ka Dai’ because it’s still going to be a lot cheaper than Starbucks.
No-Horse-Run Tip – Save a lot more money by kicking or cutting down on not-so-savoury habits, like smoking, alcohol etc. It also means a much healthier you!
8. Re-Assess Your Commuting Options
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Okay, I’ll admit it. I would love to have a limo driver send me to work every morning. Unfortunately, that’s not going to happen, because I’m faced with the dilemma of having to choose between putting my money into a house and a car.
Every Singaporean knows owning a car here is a luxury. Friends who drive tell me they have to spend at least $1,000 a month on their cars. And that doesn’t account for unexpected parking summons or servicing expenses.
Oh, did I also mention a car’s value depreciates every year?
They jokingly tell me it’s so much cheaper if I take a taxi to work and back home daily. And they are right!
I just tell the taxi uncle my destination, sit back, relax and he will…be my limo driver. I could either nap or watch a movie on my mobile phone. Don’t need to stress about expenses to upkeep a car.
Photo Credit: The Straits Times
To save even more on my monthly commuting costs, I take the MRT and bus. I agree train cabins are usually packed like sardines during rush hour and it breaks down sometimes, but I can live with that. Sometimes, I’m also lucky enough to catch a glimpse of ‘celebrities’ in the same train cabin.
SMRT has a Workfare Transport Concession Card that allows unlimited travel for S$80 a month. So I take advantage of the concessionary rates when I travel between 9:01am and 4:59pm, from 7:31pm on weekdays, and all-day on weekends and public holidays. It’s a good deal for me.
Rather than spending on a car, it looks pretty attractive for me to sink that money into buying my first property.
No-Horse-Run Tip – Pay $80,000 for a piece of “COE” paper? Siao ar?! For this amount of money, I could get top notch renovation works done on my house by a list of established renovation contractors in Singapore.
9. Make Some Extra Cash
Photo Credit: thejosevilson.com
Always been a math whiz? Why not consider giving private tuition. I did this for extra cash during my university days and the money’s actually not bad. It’s all about time management though.
If you’re a jack of many trades or an individual brimming with talents, it’s also not a bad idea to seek out some freelancing work, so as to add a few hundred bucks more into your savings account.
A designer friend of mine makes around $500 a month by churning out logo and flyer designs for small businesses locally, sometimes she could earn up to $1,300 for bigger assignments.
No-Horse-Run Tip – In recent years, we’ve witnessed a rapid expansion of the freelancing economy. However, to earn money as a freelancer, you will need to devote time and effort towards it. It may not be everyone’s cup of tea, so don’t say I never tell you hor.
10. Don’t Eat Out Every Day
Photo Credit: Elena Ermakova/ Getty Images
Every evening, eateries in my neighbourhood mall are filled with dinner crowds. It gives me the impression that nowadays, no one cooks at home anymore.
In my opinion, there’s nothing inherently wrong with eating out. If you could afford it, why not?
But if you’re on a mission to achieve a savings goal and facilitate buying your first home, then what kind of money are we talking about here?
A young couple in Singapore eats out four to five times a week on average, spending almost $780 a month. When I start comparing that number to the cost of eating home-cooked meals, that’s actually quite high.
If I were to just prepare dinner at home five times a week , it also means moving five meals from the food-court or restaurant into my home. So assuming I spend $20.00 on each meal (for two persons), that will save me a hundred bucks a week.
In other words, it’s $400.00 worth of extra savings a month!
No-Horse-Run Tip – There are plenty of ‘make-ahead’ meal recipes on the web. It teaches you to prepare your next day’s dinner the night before. So when you arrive home after work, just cook them conveniently in the microwave or oven.