Formal education may give us a leg up in life and career, but less so on managing money. School Didn’t Teach Me, a SingSaver series, is your informal education in personal finance.
As a kid, growing up to become an adult seemed exciting and glamorous at first. But then reality sets in, and you realise what it truly means to be #adulting.
There comes a time, when everyone has to grow up from being a carefree youth into an adult with loaded responsibilities. We think we speak for many people in that a lot of us eagerly wished to ‘grow up faster’ as a kid, thinking that adulthood would come with greater freedom, agency, and more money.
While all that is true, what we weren’t anticipating was all the adulthood responsibilities that came along with it. Learning how to pay bills, buy insurance, apply for a housing loan, set up monthly budgets, and the list continues.
In spite of all that, everybody’s definition of what constitutes adulting is different. For some, it’s a significant milestone like owning your first car whereas, for others, it could be as simple as applying for your first credit card.
No matter what your adulting experience has been so far (or if you don’t feel like you’re #adulting yet), there are bound to be some overlaps. In this instalment of School Didn’t Teach Me, we asked the SingSaver staff what their key signs and highlights of adulting are thus far.
I knew I was #adulting…
1. “When I applied for my first credit card…”
Upgrading from a debit card to a credit card can be an incredibly exciting transition stage. Even though a debit card is great to control one’s spending since it’s dependent on your existing bank balance but the level of freedom accorded by a credit card is something else.
Essentially functioning as a loan, a credit card relies on the assumed trust and responsibility of the cardholder to re-pay the bank their borrowed dues on time every month. However, this is where the pitfall comes in.
Many young, inexperienced cardholders tend to go overboard with their first-time expenditure — offering to pay for friends, bombing a fortune on branded goods, spending on expensive experiences and what’s the end result? They get a shock of their life when their credit card bill flashes them a four- or five-digit figure — basically an amount that no one was prepared to pay for.
“… But interest rates killed me.”
Take it from one of our colleagues: Back in the day, he eagerly applied for his first student credit card. Not only did he max out his credit limit, but he only paid the minimum S$50 fee. Worse still, he was unaware of the interest fees creeping up on his outstanding bill, resulting in the actual amount snowballing out of control. After finally repaying the full owed amount, he promptly cancelled the card.
This might all sound like an absolute nightmare, but don’t let his story deter you. If tracked properly, a credit card is extremely beneficial thanks to the attractive cashback rebates or mileage perks offered.
At best, treat his credit card horror story as a cautionary tale of what not to do as a cardholder.
Related to this topic:
Cashback vs. Miles vs. Rewards: Which is the Best Type of Credit Card For You?
The Best Credit Cards For Young Adults in Singapore (2022)
5 Signs It’s Time to Upgrade Your Debit Card to a Credit Card
Credit Card Promotions: Exclusive on SingSaver (August 2022)
Credit Card Welcome Offer: A Comparison of the Best Gifts
2. “When I bought my first insurance plan and had to handle all insurance matters on my own…”
Ah yes, taking over your own insurance plans. It’s almost like a rite of passage when parents pass on insurance matters to their kids themselves. As a 20-something, it feels a little unfair and intimidating to suddenly be thrust such a responsibility, especially since we’ve never been taught about insurance in all our years of education.
Insurance is mostly something that we are forced to pick up and learn along the way. Understanding insurance jargon, the extent of your coverage, its expiration, your dependents (if any), payout and premium amounts, and so on can be quite dry and boring — particularly for those without any personal finance background or interest.
Hence, it’s not uncommon to see many adults leave their entire insurance portfolio management in the hands of their insurance agent or financial advisor. (And don’t even get us started on the dubious advisors only looking to earn a commission.)
“… Including meeting the insurance agent by myself.”
For some, they might not even be fully insured in the necessaries like whole/term life, personal accident, critical illness, health and disability. But once you’ve covered all bases, next comes paying your policies’ premiums each month — just like credit card bills, yeah?
The onus falls on us to allocate our monthly budget accordingly for these additional, but necessary expenses.
Related to this topic:
Best Critical Illness Insurance Plans in Singapore (August 2022)
5 Best Term Insurance Plans in Singapore (2022)
Best Personal Accident Insurance Plans in Singapore (August 2022)
How to Bump Up Your Health Insurance Coverage to Include Certain Conditions
Best CareShield Life Supplement Plans in Singapore (2022)
3. “When I went for my doctor’s appointment alone…”
Health matters are scary as they are. But when you have to go to the doctor on your own without your parents accompanying you? That’s when they get ten times scarier.
All of a sudden, you have to actually remember your medical history, actually remember what prescriptions you’re on (if applicable), actually speak to the doctor, and actually understand your diagnosis, and not actually your mum or dad explaining all this to you when you get home.
This anxiety is probably exacerbated if your diagnosis is severe or you get referred to specialists for further examination or treatment.
“… And had to rush myself to the A&E department solo on multiple occasions.”
On a personal front, I’ve had my fair share of scheduled hospital appointments and Accident & Emergency (A&E) trips. And how I’ve learnt to manage these visits is to take each stage or procedure as they come, one by one.
Entering the clinic/hospital? Don’t stress over the diagnosis yet and just focus on getting your queue number first. Seeking further evaluation of your condition? Practise deep breathing while distracting yourself with some work, chatting or scrolling through your phone.
Fearing over each stage’s outcome is no help. In fact, hyper fixation or over-worrying only accumulates unnecessary stress to the point where it can be overwhelming.
Whatever the case may be, health-related issues are no laughing matter and should be taken seriously (which also explains why it’s important to be sufficiently insured).
4. “When I applied for my first BTO launch with my partner while still in university…”
Because of the nature of Singapore’s public housing, it’s not unusual for many university couples to start applying for Built-To-Order (BTO) flats already. The rationale? You get more grants while still in university.
Thanks to the revision of HDB (Housing & Development Board) grants, couples with an average monthly household income of S$9,000 and less are eligible for the Enhanced CPF Housing Grant (EHG). This grant allows couples to receive anywhere from the minimum S$5,000 to the maximum S$80,000 — increasing at S$5,000 for every additional S$500 in monthly household income.
The EHG is also valid for resale flat applications.
Other housing grants available include Family Grant, Proximity Housing Grant, and Singles Grant. Unlike the EHG, these three aren’t applicable to HDB BTO flats, only resale flats.
Otherwise, couples are also encouraged to apply for HDB housing loans where the Loan-to-Value (LTV) limit can finance up to 85% of your BTO’s or resale’s purchase price depending on the flat’s remaining lease.
“… And handle renovation work thereafter.”
But securing the house is just the initial step, next comes all the intensive renovation work. While all your CPF-Ordinary Account (OA) savings can be utilised to pay for your mortgage, the cost of renovation packages has been on the rise. Renovation typically cost S$30,000 to S$50,000 to finance, excluding multiple hidden costs.
At this stage, many couples are stuck with the dilemma of whether they want to take up another loan — a renovation loan — just for the sake of designing their dream home. Despite having lower interest rates, the caveat is that it’s capped at S$30,000 or six months of your income, whichever is lower.
And as mentioned above, renovation costs can easily exceed this limit. Meaning, you’ll have to fork out the outstanding sum straight from your pocket. Or worst comes to worst, you get a high-interest personal loan.
Related to this topic:
How to Do Up Your Home Without Taking a Renovation Loan
7 Ways to Lower Renovation Costs if You’re Moving Into Your New Home in 2022
Your Go-To Personal Loans Guide in Singapore (July 2022)
Best Personal Loans to Ease Cashflow in Singapore (2022)
5. “When I opened my first investment account.”
To achieve financial independence, investing is considered one of the crucial must-dos. Letting your investments earn for you through a passive multiple-income stream portfolio empowers you with more disposable income, greater financial stability and security, and more freedom to pursue other interests and passions in life.
It’s also a great supplement to accelerate your wealth in time for a comfortable retirement without over-relying on CPF. According to your risk appetite and investment style, there are multiple methods through robo-advisors, online brokerages, or directly stock-picking.
Regardless of your choice, generating several secondary income channels helps alleviate the burden on your career as the sole income source. This means you won’t be entirely destabilised in times of high inflation, retrenchment or a recession; which is precisely what a diverse and robust investment portfolio can serve to withstand.
6. “When my conversation with friends shifted from casual topics to adult topics about work and world issues.”
At what point in our youth did we forget about our childhood interests and instead pivot to arbitrarily mature, grown-up topics like career and world issues. Not that such topics aren’t important, but those are among the few interests that many adult friend groups even have in common now.
Not to mention, each individual’s life stage plays a significant role too. Just because we’re both in our twenties and thirties doesn’t mean that we can relate to one another completely. After everyone graduated from tertiary education or university, some followed the same path while others deviated.
Gone are the days when we used to “open jio” each other to play DOTA at LAN cafes for hours on end. Instead, now we’re mostly debating between different investment profiles. And as friends drift apart and passions change, the only things keeping us together are nostalgia and memories.
7. “When I went on my first solo holiday trip.”
Purchasing a single fare ticket, settling accommodations for one, planning an itinerary based on your preferences and simply wandering and exploring wherever your heart desires is a profound sense of freedom.
Read more: International Travel Checklist 2022
Truly, if possible, we’d encourage everyone to try a solo trip at least once in their life; whether it’s on an exchange or on a spontaneous whim, discovering the world on your own terms lets you discover who you are as a person. In simpler terms, spending time by yourself in a foreign land is an opportunity for self-growth and character development.
And this is all thanks to our adult money earned from our paychecks, making the nine-to-five grind more tolerable and worthwhile.
But before leaving on your solo adventure, remember to buy COVID-19 travel insurance to keep your journeys protected all the way in case anything goes awry.
8. “When I passed my driving license…”
Hooray! You finally passed your driving test on your… third try, but that’s alright! It doesn’t matter. Now you’re fully licensed and officially deemed competent enough to hit the road (but not literally).
If your family owns a car, that’s even better. Your family vehicle is now at your disposal to use as and whenever you please. Get ready to be recognised as the personal chauffeur among your friend groups and parents.
Jokes aside, getting your driver’s license is a huge step forward in adulting since it’s one of the big milestones to achieve upon turning 18.
“… And now I’m pumping petrol into my very own car.”
Initially, there’s a certain prestige and glamour of navigating the steering wheel but the novelty wears off quickly once you realise the petrol tank is empty. Now comes the time where we reluctantly fish out our credit cards to top it up.
Besides that, deciding to purchase your own car is a lofty expense for Singaporeans; so much so that many of us are looking into alternative options like secondhand cars or electronic cars as opposed to brand new models.
Read more: Top 10 Fuel Efficient Cars in Singapore
SingSaver promotion: Enjoy 5.6% cashback when you apply for the OCBC 365 credit card and make a min. monthly spend of S$800 within the first month following card approval. Promotion is for new OCBC cardmembers only. Valid till 31 August 2021. T&Cs apply.
Petrol will never stop being expensive but with the right petrol credit card, you can earn greater savings with every petrol kiosk visit. For instance, the OCBC 365 card rewards motorists with 5% cashback on all fuel spend at every petrol service station.
If not, the UOB One card is another top contender with fuel savings of up to 21.15% all year long at Shell kiosks.
Cars are important big-ticket purchases and should be handled with care. That’s why it’s important to get car insurance and safeguard it against potential damages or accidents.
9. “When I ate ice cream for breakfast just because I could.”
And who said ice cream is only for dessert? One of our colleague strongly disagrees with that statement. She claims that it’s just as valid for a breakfast food as Mr Bean’s porridge & youtiao set is, and other opinions are irrelevant (as dictated by her wallet and her cravings).
10. “When people come to me for advice and I realise that I am the adult in the room.”
We turn to look around to see which adult they’re asking for help only to find that they’re referring to us, ourselves. We are the adults now. We’ve joined the ranks from young, dumb teenager to a somewhat capable adult — or at least, attempting to be — whenever others need any answers or help.
But you don’t have to do this #adulting stuff alone. Here at SingSaver, we have just the guides to equip you with the financial knowledge and information necessary for each phase of your adulthood.
Help yourself to better financial shape in the new norm, with SingSaver’s all-new Ultimate Savings Guide! Got your free copy yet?
Read these next:
Money Confessions: What’s The Most Singaporean Thing You’ve Done to Manage Your Personal Finances?
5 Tips For Millennials to Start Adulting Financially
7 Golden Rules to Managing Your Money Like an Adult
The Real Cost: How Much Do I Need to Earn to Live Comfortably?
By Emma Lam
With a minor problem of ‘itchy fingers’ for flash deals and sales, Emma is on a lifelong journey to understand what being financially independent in adulthood means. That said, her inner child is still very much alive… with animals and gaming being her weaknesses.