KEEPING WITHIN BUDGET
BUYING A HOUSE, RENOVATION, HOLD A WEDDING, HONEYMOON
and for the guys...
PROPOSAL
In Singapore, both women and men work. Unlike the past, we can now share our burdens with each other. However, how many women can resist the temptation on outer gratification and yet REMEMBER TO SAVE?
I'm writing for the sake of all male Singaporean.
By all means, marry. If you get a good wife, you'll become happy.
If you get a bad one, you'll become a philosopher.
If you get a bad one, you'll become a philosopher.
It is important to consider the cost of ALL these big events
before you go on and splurge on just ONE.
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For me and Zen, our big events went in this order:
①Buy a House
②Proposal
③Renovation
④Hold a Wedding Banquet
⑤Honeymoon
Not surprising, we realized that we have limited funds.
If we spend over a certain amount paying for the downpayment, we will not have money for renovation, wedding banquet and honeymoon.
For Zen, he had to consider the price of his proposal idea as well as engagement ring!
$________$
So...how did we handle this?
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1_THE BIG PICTURE: Look at your current cash assets
Don't bother calculating what you will have in the future at the very beginning.
If you do see things this way, you aren't planning for the worse scenario.
We should always look at our current assets now so that we know what's the lowest of the range we can go.
BUDGET RANGE
LOWEST AMT⇒⇒⇒⇒⇒⇒⇒⇒⇒⇒⇒⇒⇒⇒HIGHEST AMT
PRESENT VALUE, certain value FUTURE VALUE, uncertain value, betting on the future
What is the point of counting the future which you yourself are unsure of?
"I will definitely get promoted so my savings will increase by $X/mth"
"There will be another HDB to be build at Queenstown. Let's wait for more cooling measures!"
"Price of private estates are still dropping. Maybe we could afford one 3 years later."
It's amazing how you can apply forward thinking concepts from free seminars and workshops.
I am studying CFA, I attended Value Investing Summit, KenChee's short free seminar and Patrick Liew's Mencius Property Investement Course. How I have a better understanding on how I should manage my cashflow.
Now, with the current combined assets that you have, do this:
- minus away all monthly expenses
so that this value will become solely your TRUE savings.
This is the amount that you will not touch for insurance, allowance for parents, food and travel, ANY kinds of expenses should be removed from your current combined assets.
Look at this amount.
This is what you have saved and you will definitely not touch for the next few years.
I call this the TRUE SAVINGS
Now, with your combined TRUE savings and combined CPF,
can you see limited our assets are?
Let's look at our example.
Zen and I put aside a fixed certain amount every month (NOT ANY FIXED SAVINGS DEPOSIT PLAN...Just personal savings) which we will definitely not touch, even for travels.
Combined assets: $X
HOUSE⇒⇒⇒⇒⇒⇒RENOVATION⇒⇒⇒⇒⇒⇒⇒WEDDING⇒⇒⇒⇒⇒⇒⇒HONEYMOON
$(X-AMT1)⇒⇒⇒⇒⇒$(X-AMT1)-AMT2⇒⇒⇒⇒⇒$[(X-AMT1)-AMT2]-AMT3⇒⇒⇒⇒$[[(X-AMT1)-AMT2]-AMT3]
However, if you do not have a clear savings, no TRUE savings/ only 1 account that settles it all,
Combined assets: $?????????????????????????????????????
Because this amount fluctuates, this amount, even at present, is not accurate. So...why are you sure that this future amount will be what you can use for (let me copy paste again)
① Buy a House $??????????????? (because of uncertain future amount)
②Proposal $?????????????????/?? (because of uncertain future amount)
③Renovation $????????????????? (because of uncertain future amount)
④Hold a Wedding Banquet $???? (because of uncertain future amount)
⑤Honeymoon $???????????????? (because of uncertain future amount)
So....common sense. Please do not invest when you know that you need the cash in the near future.
2_Rank your priorities
Everyone has their own views in life.
Some view banquet as unnecessary and some don't even want to have their honeymoon.
Some view banquet as unnecessary and some don't even want to have their honeymoon.
Your partner and you should be in consensus with one another. You don't want to end up blaming one another after an important event in your life. Afterall, events like wedding will only happen once in a lifetime.
Again, copy paste...what are your priorities?
- Buy a House
- Proposal
- Renovation
- Hold a Wedding Banquet
- Honeymoon
After deciding on your priorities, DON'T CHANGE IT.
This is an annoying mistake that I'm facing at work.
In the gaming industry, failing to comply to Scrum method, will lead to terrible loss
in mancosts and time.
In the end, you just really don't know what you want most and you will not end up happy with the loss...so stop wasting time and stick with your decision.
3_Research on the details, going in depth
【BUYING A HDB】CPF AND CASH FACTOR
Many of us ballot for HDB.
HDB only notifies us a few months in advance about the next sales launch.
If you are lucky and you get to choose a unit, good for you!
But...do you know? Once you sign the Agreement of Lease means it's time for
10% DOWNPAYMENT
100+k = 10k downpayment
200+k = 20k downpayment
300+k = 30k downpayment
400+k = 40k downpayment
500+k = 50k downpayment
For combined income less than 5k, government will only help you if you purchase a unit in the
NON-MATURE ESTATE
The rule is to deduct every single cent from both CPF accounts.
If your combined CPF isn't enough to cover for your downpayment,
you obviously need to use cash.
【ENGAGEMENT RING】CASH FACTOR >>>>DEPOSIT NEEDED
【ENGAGEMENT RING】CASH FACTOR >>>>DEPOSIT NEEDED
Zen suggested that I add this section too.
When choosing ring, consider this:
1) Premade design
2) Customized design
If you don't mind waiting for at least 8 weeks, then opt for customized design.
With customized design, you are giving yourself the freedom to choose
Grade of diamond
Diamond cutting style
Material of the band (Yellow Gold, White Gold, Rose Gold etc)
Your ring shop should come with 2 free resizing options.
Please argue for that if you don't get any.
Women's fingers will become huge after pregnancy. Yes...ugly and fat. T_T
We engaged in JANNPAUL. Do check it out at Orchard Rd.
It's just opposite Wheelock place.
When choosing ring, consider this:
1) Premade design
2) Customized design
If you don't mind waiting for at least 8 weeks, then opt for customized design.
With customized design, you are giving yourself the freedom to choose
Grade of diamond
Diamond cutting style
Material of the band (Yellow Gold, White Gold, Rose Gold etc)
Your ring shop should come with 2 free resizing options.
Please argue for that if you don't get any.
Women's fingers will become huge after pregnancy. Yes...ugly and fat. T_T
We engaged in JANNPAUL. Do check it out at Orchard Rd.
It's just opposite Wheelock place.
【RENOVATION】CASH FACTOR >>>>DEPOSIT NEEDED
Now you want the house to be done before your marriage.
After using your cash to pay for the house, how much savings are you left with?
And remember, if you can renovate, it means you have already gotten your keys.
If you have your keys, it means that the payment for the house officially starts.
Can you still save as much savings in cash while juggling with paying back the HDB loan?
Normally, Singaporeans take 10-30 years to clear their HDB loan.
Again, this can be split into Cash and CPF.
If you are trying to make the ends meet while paying back the HDB loan, then maybe, you have overestimated your capability in earning more to pay for the house.
I've posted some renovation related entries previously...which means I've done my research yes.
Some contractors require you to pay half the amount first before the work is done and the remaining after the renovation is done. The amount differs from contractors to contractors, just like your HDB downpayment!
I've posted some renovation related entries previously...which means I've done my research yes.
Some contractors require you to pay half the amount first before the work is done and the remaining after the renovation is done. The amount differs from contractors to contractors, just like your HDB downpayment!
【WEDDING】CASH FACTOR >>>>DEPOSIT NEEDED
If all your cash has already been used up in the housing downpayment as well as renovation, what is going to happen to the wedding?
Saying that you want your wedding to be simple is fine.
Everyone wants their wedding to be special.
If you have decided to tone down your wedding, again, please make sure that you are really happy with it and stop being indecisive.
Furthermore, depending on where is the location of your wedding, different amounts of deposit will be required. YES...HDB downpayment is not going to be your last deposit!
To add on, if you want to make a cancellation of your wedding banquet, even a few months notice in advance will require you to pay the penalty price!
( ﾟдﾟ)ﾊｯ!
【HONEYMOON】CASH FACTOR
I don't know if all modern couples still do this "honeymoon" but I am!
If you have already exhausted your cash assets in the above 3, you can forget about this or postpone this to a much later period, depending on where you want your honeymoon to be.
Do you see the snowball effect now?
Alot of Singaporeans will consider to put "BUYING A HOUSE" as their number 1 priority.
If the first step already has a bad planning to it, this budget allocated plan will fail due to the
snowball effect.
I am lucky to be surrounded by girlfriends who work hard during their school holidays and are now successful working professionals. All of us do spend to pamper ourselves once in a while but we also have solid savings prepared for our big life events.
FORWARD PLANNING
common word in workplace too
I hope you have girlfriends who save up too! If you don't, don't be disappointed.
The life that we want, we must earn it by ourselves. Don't depend on others.
Money flows like karma do
I believe
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I am sleepy!
Good nitex and I hope any male readers will find this useful.
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