3 'adulting' needs you should start thinking about in your 20s

17 Apr 2017 
There comes a time in everyone’s life, usually in our mid-20s, when we all share the same sense of fear and adventure – commonly known as Adulthood.

It is during this period that we learn to take responsibility to craft our own future. Paying bills, building a career, buying a home, starting a family and more…it sounds daunting, doesn’t it?

Well, it’s perfectly normal to feel this way. This is all part of taking on the challenges that adulthood offers – and we’re here to offer tips, provide you with key information, and ultimately give you the tools you need to craft your own future.

Read on, and be prepared to confidently say #ICanAdult at the end!

Step 1 to “Adulting”: Creating your own path towards financial independence

Financial independence is probably the most important goal in adulthood. The good news is, you’re already on the path towards attaining it the moment you start working and earning your own income.

This is also the time when you’re starting to figure out how to manage your money. Between funding your daily expenses, lifestyle habits and future goals, you’ll soon realise that having a budgeting system in place will come in very handy for keeping track where your pay goes.

One of the most common ways of setting up a budget is to split it according to a percentage for various expenses – for instance, the 50/30/20 rule:

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Of course, this is not a hard and fast rule, as budgeting should be tailored to your own individual lifestyle and needs. For instance, if you’re planning a holiday to Europe in a couple of months, your budget would probably include a percentage set aside for the expenses relating to your trip.

You can even try adopting a “Budget Challenge” of your own – by testing yourself to see how well you can structure a budget to meet your desired lifestyle, both present and future needs.

However, a budget is ineffective if you don’t stick to it, so make it a point to measure your success in sticking to the plan each month!

Step 2 to “Adulting”: Understand how your actions now determine your financial future

If you’ve already had a budget set up, good on you. That means you’re ready to take on the next step towards financial independence, which is to think about your retirement.

Yes, we know. In your early 20’s, when you’ve just started working, retirement seems like a lifetime away. But this is really the best time to start planning for it, because you have time on your side. Now is when you are in the best position to maximise your potential for accumulating and growing your savings.

As a Singaporean, you’ll know by now that part of your monthly income goes towards your CPF savings. Your employer will also have to make regular monthly contributions towards your CPF according to the CPF contribution and allocation rates. Coupled with the attractive interest rates offered by CPF, these savings will add up to a considerable sum over time.

Here’s an example of how a CPF member managed to save up $50,000 in his CPF accounts over the course of 5 years:

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Read more about this at “Is it possible to have $50,000 in your CPF in 5 years?

Notice how his CPF savings grew up to $51,450 in just 5 years? That amount will continue to grow in 10, 20, and even 50 years’ time and beyond. That’s the secret to building financial independence – savings, interest, and time.

Taking that into consideration, you’d also have to budget, save, and invest the rest of your salary now, in order to build up a secure financial future for yourself.

Read more:

Here’s what young Singaporeans really need to know to start planning for retiring

Don’t wait till you’re 30 to make these 4 financial decisions

How saving 10% of your income and your annual bonus can change your retirement completely

Step 3 to “Adulting”: Keeping your wallet and your health in good shape

Now that you’ve got the basics of being financially independent, it’s time to move on to the most important thing of all – health. Or rather, the potential costs associated with managing your healthcare needs through life.

Did you know that all Singaporeans are covered under MediShield Life, which functions as a universal, basic healthcare insurance? MediShield Life protects you in the event of unexpected medical or healthcare-related emergencies.

On top of this, you have the option of adding on additional coverage in the form of Integrated Plans (IPs), which come at extra costs.

To make a better decision, it is useful to consider these two questions to assess which plan suits your needs best.

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Read more: Two questions to ask before you buy an Integrated Shield Plan

Ultimately, managing your insurance premiums is crucial to keeping both your health and wallet in good shape, in the unexpected event of major illness – which could strike anyone.

Read also:

A fresh graduate’s guide to different types of health insurance in Singapore

Did you know that you can do this with your Medisave?

Steadynomics 101: Tips to get healthcare ready

So are you ready to say #ICanAdult?

Of course, there’s much more to learn, but for now, this should provide the basis for you to confidently step into the future. Your entire adult life is ahead of you, so go ahead and experience the adventures that adulthood has to offer!

​Check out the #ICanAdult hashtag and our Instagram page for more bite-sized financial tips!​

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