Today is the last day of year 2012. I am happy to note that I managed to build up my personal Emergency Fund that allows me and my family to survive without my income for six months.
It took me more than two years to save up this amount of money. This is because I had used up all my personal savings for my wedding last year. In addition, I am also the sole-breadwinner, had a baby girl and owns a car. Therefore, it took me quite some time to save up this amount of money. My partner and myself decided that we would only dip into fund when I lost my job or faced a personal finance crisis. Henceforth, we put the fund into a fixed deposit.
I always encourage young people who just entered the workforce to build up their Emergency Fund as soon as possible. Life is always unpredictable. You never know when you will lose your job or encounter personal finance crisis.
Having an emergency fund can help to provide short term security against market uncertainties. It allows you and your family to carry on life as per normal whilst you embark on the recovery journey.
As 2012 is coming to an end, I am reviewing my financial health status. I got married last year and this year my baby girl was born. Therefore, one of the outcome of my review is to purchase the Aviva SAF Group Term Life Policy. I think it is one of the most value for money term policies in Singapore. For as little as S$4.21, applicants can be insured up to a maximum coverage of $1000,000. Of course, only NSFs, NSmen and personnel working for MINDEF are eligible for this policy.
The need to have adequate insurance cover really hit me hard twenty years ago when I was in secondary school. My dad, who was the sole breadwinner, suffered from stroke then and was unable to work. My family lost our sole income and to make things worse, my dad did not purchase any insurance covers. As a result, we went through a period of financial hardship. On hindsight, if my father had bought any life insurance policies when he was healthy, our family situation would definitely be better.
It is important that you insured yourself for the correct amount of protection. In addition, it is important that you buy the correct policies.
It is that time of the year when salaried workers collect their year end bonuses. A couple of weeks ago, the government had also declared 13th month and 0.70 month variable bonuses for all civil servants. With the world economy still in the doldrums, I believe most Singapore workers’ year end bonuses would be modest, in view of anticipated moderated growth for Singapore economy.
This year will be the 7th time I am collecting year-end bonuses. I will be receiving 2.5 months of bonuses, excluding 13th month. The amount is not big, but substantial enough for me to settle my renovation and insurance loans. I also intend to set aside some money for some investments and my baby’s endowment plan. I targeted to settle my car loan by next year-end, using next year’s bonuses. With that, I would only need to worry about my housing loan.
It is important for me to settle these loans as soon as possible as I am currently the house hold sole breadwinner. For those in the same situation as me, you would understand the pressure I am facing. On looking back, this period marks an important milestone for me as I embark on my wealth journey toward financial freedom.