This is surprisingly a very common question everyone have in mind as we progress towards this age milestone. It’s not unusual to be curious as we would want to know if we are adequately saving enough or if there is a need to alter our saving rates.
As a rule of thumb, regardless of your age, many financial gurus will advice that you should have at least 6 months of your monthly expenses saved up. That say, if you are spending $2k per month, you should have a minimum of $12k saved up in liquid cash. These are what we called emergency funds that you can use for daily expenses when situation such as sudden lost of job or reduction in income arises.
Obviously, CPF monies do not fall under this category due to their locked in nature. However, they are definitely considerable components to include during retirement planning, which we will not discuss under this article.
30 years old is the age where many are hitting life milestones. This includes getting married, getting a house or having kids, or all of the above. All these takes a huge chuck of your savings and you could fall into debt quickly if you are not careful about managing expectations and finances.
For a typical $300k 4-room flat in a non-mature estate, you should be having at least $20k on hand to cover the downpayment and the administrative costs (refer to breakdown here).
Whereas, for a typical wedding that involves the traditional wedding dinner and the whole nine yards, you should be prepared to dish out at least $50,000 to keep your spouse happy (refer to breakdown here).
We do not know what the future holds. Hence, it is important to have a small fund set aside for unintended situations. Think of it as an ad-hoc fund that you dig into in the event of unplanned financial situations that requires a substantial amount at short notice. This could include health crisis or major home and car repairs.
At a minimum, this fund should cover at least 3 months of your monthly expenses and is at your disposal immediately. Many usually fail to cater to these unexpected situations, and instead overlapped them with the emergency funds. They should be maintained separately as they have different purposes.
Rather than focusing on how many grands you should be seeing in your bank account, have a clear goal of meeting the above 3 stashes. It is important to ensure that you have enough buffer to confidently step up to any unforeseen challenges in the future.