Rich lessons you could pick up from some of our readers, who have gone through sobering money fiascos and lived to kindly tell their tales.
As we prepare to don a masquerade and indulge in a round of trick-or-treating, many would agree that 2020 has been, quite frankly, one extended Halloween – and not the celebratory kind.
The pandemic, being the new Reaper in town, has caused many a Hell-on-Earth experience for us. Yet, it also ‘treated’ us to lessons about financial prudence. Against the backdrop of Halloween, some of our readers have also kindly contributed stories of money disasters – some from their past and some owing to COVID-19 – which they have smartened up from.
After all, there is nothing quite like fear as a motivation to set you back on the path to financial wellness.
Happy reading, and Happy Halloween!
Financial scare #1: Breaking up six months before the BTO arrived, forfeited a $25K deposit
Miles Lim, Business Development Manager, 29
Breaking up with my then-girlfriend of 4 years when our BTO was expected for completion in six months was not what I’d envisioned for 2020. We were supposed to be a team – spending our lives together, starting a home, building a family… but that difference between a dream and reality boiled down to a single decision – the break-up.
Apart from mending a broken heart, we had to be adults and talk about giving up the BTO (our supposed dream home). This resulted in signing a couple of documents which saw the loss of $25,000 (the initial downpayment we placed through our CPF).
What I’ve learnt was that I shouldn’t have committed to a BTO so ‘early’ into the relationship. While applying for a BTO is a norm these days, you can always get married first before applying for a BTO. Better yet, get a resale if you really want to move out of your parents’ place!
Financial scare #2: Bitten by coin
M.J. Tan, 29, Business Development
At the end of 2017, I began to dabble with cryptocurrency trading. It was convenient, and I could do it after my regular work hours as the market was open 24/7. Within a month I had made almost 200% on my capital, and I felt confident to trade larger amounts. At this point, I began using margin trading to take larger positions in the market.
Unfortunately, the cryptocurrency market took a massive dive at the start of 2018, resulting in a loss of around $20,000 within a few weeks. I tried to recoup the loss by doubling down, but the bear market continued through the rest of the year.
Whether you’re one of those who bought into the cryptocurrency hype, or you’re dabbling in any other investment vehicles, it definitely helps to learn and research more about the product before committing. Take calculated risks, not unnecessary risks.
Financial scare #3: Spending beyond means, zero savings
W.X. Chong, 30, Consultant
During the Tinder boom years ago, I went out on lavish dinner dates and drinks every other day. I was ‘living it up’, spending whatever I was making, with no semblance of any savings. Crisis hit when I was, one day, axed from my company, and then I was unemployed for a period of time without an idea of how to get by. That feeling of helplessness I felt while eating instant ramen everyday really got me ‘waking up’.
There’s nothing wrong in spending on your lifestyle of choice – as long as it is well within your means. I had since gotten back on my feet and taken savings more seriously. Every month, I also set aside a ‘fun fund’ for my discretionary spending. Once that is depleted, then I’d know I’m starting to overspend.
Financial scare #4: Putting off home insurance and ending up with a $18,000 bill
Andrea Kim, 33, Business Development Manager
This year, we decided to purchase a resale condominium. Between moving and reno, there was also the added stress of Circuit Breaker. So home insurance was not a priority. Unfortunately, our move-in plans were further delayed when a main pipe in the bathroom burst for no reason! Sewage water and fecal matter overflowed from the bathroom to all of our rooms. To make matters worse, the rooms’ parquet floors, wooden doors and frames had absorbed the stench!
Accidents happen, and not just from the time you move in. To replace the flooring and all the door frames set us back $18,000 – a very avoidable expense if home insurance was bought from the get-go. But we are thankful that this did not happen after we moved in. To think of all the damage to our furniture!
Financial scare #5: A $5,000 bill, 3 shiny rings and no wife (or girlfriend)
Alex Tang, Content Writer, 32
I had custom ordered a set of 3 stackable rings at the jewellers to fulfil my elaborate plan – something like what you will find on Anna Sheffield. The first would be a promise ring, followed by the engagement ring that would be given 6 months later and the last would be given during the wedding to seal the deal. Perfectly planned, but it did not come to fruition as we broke up within the 6 months that I gave her the first ring.
Forget shiny rings, ask for their hand with a candy pop ring before getting an actual ring. Besides, if she actually says ‘yes’ to a candy pop ring, you know she’s a keeper. Also, skip the diamond and go for a gold bullion instead.
Financial scare #6: Trouble in paradise with no concrete solution in sight
Thomas Thiew, IT Technician, 26
My family decided that this would be a great year to head to Japan because of the Olympic Games and that it recently rang in a new era. Before COVID-19 struck, we booked a tour package worth $15,000 for the four of us in Spring. The travel agency refused to give us a refund despite this being the norm, especially in Singapore. Although they changed the dates to early-2021, it’s not much consolation because travel is still restricted right now.
We should have been more careful when booking the tour package, ensuring that the terms and conditions allowed for refunds in the event of an international crisis like this. Alternatively, we should have booked our flights and accommodation separately instead of leaving it up to a travel agency.
Financial Scare #7: Left stranded with an overpriced apartment and no job
Ryan Ong, LGBTQ Community Organiser, 25
I had just accepted a job offer at a great company. It had all the makings of a promising new start but, boy, was I wrong. Perhaps giddy with optimism, I proceeded to sign a one-year lease on an apartment close to my new office. This turned out to be ill-advised because not long after I unceremoniously lost the job, leaving me stuck with an apartment I could no longer pay for with no good food nearby and worse – no public transport.
Always be clear on the terms of whatever you’re signing and be prepared for the eventualities. Oh, and don’t count your chickens before they hatch. It was definitely a miscalculated move on my part, assuming that all will be fine and dandy work wise. Fortunately for me, I was able to break out of my lease despite the terms stipulating that I needed to pay for the entire duration of the remaining tenancy. The pandemic was at its peak at the time, and my landlord showed me mercy.
Financial Scare #8: Second degree cancer scare
Sarah Lee, Freelance designer, 35
I had to accompany my elderly aunt, who lives alone, to SGH one day. She discovered she had stage 2 breast cancer – without knowing this whole time – until a recent polyclinic visit. She was advised to head to the A&E as soon as she could, and get admitted for treatment.
The second shock came when we (my family and relatives) realised she wasn’t even covered by insurance. The combination of her MediShield and MediSave managed to cover some costs from the diagnosis, treatment and hospital stay, but there was still the out-of-pocket expenses we had to help pay cash for – it amounted to about $2,000. At this point, it’s only the initial treatment stage. I’m not sure if complications might arise, which would undoubtedly lead to higher costs.
With this happening so close to home, I did an online comparison and bought a cancer insurance policy for myself almost immediately. There’s already enough emotional stress from being stricken with cancer, the financial stress could be controlled at least.
If my aunt had gotten cancer insurance, she would have received a payout to easily cover the hospital bills, medication and even her own living expenses.
Financial Scare #9: Wedding business fizzled out, racked up $20,000 credit card debt
Sarah Kassim, HR Executive, 40
Weddings were a passion of mine in the early days. When demand started to pick up, I decided to open up a wedding company while I worked a full-time job. It drained my savings faster than I could earn it back. Things took a nosedive when I couldn’t afford to pay my credit card payments in full so I resorted to paying the minimum, racking up sky-high interests that snowballed even further. I was looking at a debt of about $20,000.
If I could do it all over again, I would have made a decision: my company or my career. My foray into the wedding business made it clear that it was impossible to juggle both. Also, I shouldn’t have jumped the gun so soon without doing in-depth research on the nitty-gritty expenses needed to sustain the business, like maintenance, rental and manpower.
Financial Scare #10: Went out for dinner while playing with fire
Darius Tan, Engineer, 26
Earlier this year in February/March, Hertz was going through some wild times. I made the conscious decision to trade this stock and given the volatility, this was a very, very short term play.
So one fine day, on the back of some negative news, the plan was to check on Hertz that night, first thing when the US market opened at 9pm, and then exit my position if possible. However, I decided that it was wise to meet my bros for dinner. We ate, we talked, we drank – I completely forgot about my open Hertz position. By the time I checked, it was too late: the stock price had already crashed. So that was my big ‘oof’ moment. While this $5,000 lesson was a small percentage of my portfolio, it still felt terrible, especially when I already knew and was prepared to exit my position.
The moral of the story is, if you want to play with fire, always watch it before it’s too late. In the future, I might set alarms on my phone to remind me of the market opening, particularly for high-risk trades.
Financial Scare #11: Joint account disaster
Manik Khurana, 36, Insurance Head at a leading retail company
My ex-spouse and I thought we were doing everything right to secure a financial future together. We had our check-lists, our Excel sheets, and budgeting apps sorted right after we got married.
Ours was an arranged Indian marriage. When most other couples we knew were fighting about the ‘money talk’, we were in tune from the start. In our second month of marriage, we decided to open a joint account to build a travel/emergency fund. We’d put away 20% of our salary that we didn’t want to touch for other expenses. Honestly, I forgot that it existed after a couple of months because my money would automatically get deducted and deposited into the account.
Six months in, the marriage didn’t seem as rosy: we were fighting about everything and we didn’t agree on most fundamental life goals. We were not happy at all. One evening, she let slip that the only thing she was happy about were the purchases she got to make, thanks to the joint account fund. I was stumped. It was all downhill from there, and it got ugly.
We decided to call it quits within the first year of our marriage and it took me a couple of years to get over how duped I felt, and my financial loss from that joint account – that would be about $9,000 in Singapore dollars. I’m still scarred for life about trusting a partner with money.
Read these next:
Best Alternatives to Savings Accounts in Singapore (2020)
How To Allocate Your Cash Effectively
3 Awful Consequences Of Trying To Invest Your CPF Money
How Will (The Extended) COVID-19 Support Grant Help You Financially?
How Much Savings Should I Have At 35 In Singapore?