Tuesday, 1 October 2019

Couple Money Expectations: How do you and your spouse/partner match up?

  Posted at  October 01, 2019 No comments












Recently, KC went from singlehood into a new relationship and realised that my spending started to rise inevitably because of the dating phase and frequency of dates. (Maybe that's why I also have not blogged in a month due to less time! 😆) Maybe it was that I felt the need to impress my date. Maybe we ended up trying to use money to impress one another, showering each other with gifts, meals and etc.

Then, into the 3rd month of dating, she said: "Dear, when we go out to eat, can we don't eat too ex(pensive) food? I need to cut down my budget on spending."

In my heart I went "YESSSSS AHHHHHHH". A girlfriend/wife who know how to save money for you will make you rich 😆. I guess we have been trying to "calibrate" a baseline for spending and we found out we were both overspending compared to when we were single. Money perspective is actually a crucial topic given that more than 36% of divorce cases in the US is due to financial reasons (other leading causes being conflict, infidelity, commitment issues)

In our traditional Chinese culture, there is something called "三观" (3 Major perspectives towards life) and there is something called "三观不合”. (Incompatibility on 3 major perspectives) What are these 3 major perspectives?

三观 3 Major Perspectives

1. 人生观 (Outlook Towards Life): 人生观是人这辈子应该怎么活

How should we live our lives, what is the aim and attitudes we hold? How should one conduct their own personal lives such that life is meaningful? What are the things you and your spouse appreciate in life and what are you guys pursuing? What is the moral compass you live your life by? If you are your spouse's expectations towards life is too different, it inevitably affects communication because you will not be able to understand some of the decisions your spouse make and much less support them. A couple without an outlook that involves one another and see each other in their future is bound to fail.

2. 价值观 (Value system): 价值观是人这辈子什么才是最珍贵的

What is of value to you (in terms of people relationships, possessions, character values)? Monetary perspectives fall straight into this category. Why is money such a good yardstick to find out where our true loyalties and our vices are? This is because we often use money to exchange for something we feel is valuable in life. If you are your spouse differ alot on money, the things you two value will be very different and this inevitably leads to differences down the road. The other things we consider in this may be relationships with other people (and therefore we spend time and effort on them). 

3. 世界观 (Worldview): 一个人对整个世界的根本看法

An understanding of the intricate relationship of how we fit into a larger world and how the world came to be. Often, it can mean philosophical, religious, fundamental, existential ideas that are imparted to us and influence us depending on what cultures and upbringing we have been exposed to. 

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It is okay to not match 100% with your spouse. 

To me, money perspective, importance of Family and personal character (good temperament), and personal values are extremely important. However, it is unrealistic to expect that we are 100% match with our spouse. The best scenario we can have is someone who fits most of our own personal values without triggering any dealbreakers. (e.g. one dealbreaker is I cannot stand someone with bad temper who would scold their own parents unreasonably. Can I expect him/her to scold my parents in future? Another example could be a mismatch in money perspectives. I might be only looking to spend within means but he/she wants to spend and get the best out there, even if it might stretch finances)

What do we do if we are incompatible?

What do we do if we are supposedly incompatible? Instead of focusing on differences, FOCUS ON COMMON GROUND. Find out how each other think and appreciate where they are coming from instead of always insisting our own way. Communication is key in coming to a common ground and compromise sometimes.

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How do you and your spouse manage your finances? Are there any major differences in how you approach money? How did you resolve them?

Given the high cost of living and starting a family in Singapore, this is a topic we have to face sooner rather than later.

Until Next Time,

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.

7. Why I refuse to spend >15-30 minutes budgeting each month

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 

Saturday, 31 August 2019

Invited by NTUC to a Retirement Adequacy/CPF Group Discussion

  Posted at  August 31, 2019 2 comments















Update 1/9/2019:

- It's now my 1.5 months in my new company and everything is stabilising so I have time to blog again!
- I am now keeping net cash and not adding more positions at the moment but focusing on savings.

KC have had some feedback that he is quite "Lor-so" (Slang "Long-winded") and it is difficult to read for some readers. Going forward, KC will definitely try go as to point as possible and to explore telling visual stories through short comics or picture. Sorry this will still be a long article.

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TL;DR Summary

1. Many Singaporeans probably do not have enough to retire. Whose responsibility is it?
2. Retirement age and Re-employment age is increased as with CPF contributions for older workers to help to bridge that gap.
3. The possible "backfires" to the policy changes: Unwilling employers and unwilling employees. How will the government convince them otherwise? We won't know the effects till years later.
4. CPF's liberalisation over the years have allowed Singaporeans to enjoy some benefits at the cost of our retirement. (This has to be managed carefully)
5. Stay away from money detriment habits!
6. Personally, I feel that we ought to take ownership of our own financial plans, and not expect the handout from the government. Learn about the systems in place and how they can benefit us.

Hereby, I would like to ask and encourage fellow readers to contribute your comments/complaints/feedback/suggestions to the discussions. Who knows? Someone who has a say in policy making might be reading. (We hope)

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Recently, because of this blog "30yearoldinvestor", I had the chance to take part in a small focus group organised by the NTUC on the topic of "CPF, retirement and re-employment ages". (Special thanks to J from NTUC for inviting me).

I will just talk to myself about my own opinions. I think the talk essentially was trying to answer a question:

How much does a Singaporean need to retire adequately? (Consequently, is the Govt and CPF doing enough?)
Note: This post represent solely my own opinions and are not affiliated to any organisations. Yea, it is not a sponsored post.


In the recent NDP rally, Our Prime Minister spoke of raising the retirement age and re-employment ages progressively from now till 2030. Firstly, I can imagine it to be quite an unpopular policy given the older folks and business owners I have spoken to. But the government seems quite positive about this so let's hope they are right. My foreigner boss actually credited our government for thinking so far ahead of time saying that usually governments only care about the next election.

Definitions (if we still do not understand what it means for us):

1. Retirement age:
Employers are not supposed to terminate us unfairly due to age below the retirement age. The minimum retirement age is 62. This will be raised to 65 by 2030.

2. Re-employment age:
While we are employed, employers must offer re-employment to eligible employees who are turning 62, up to age 67. This will also be raised to 70 by 2030.

These are enforced under the [1] RETIREMENT AND RE-EMPLOYMENT ACT (CHAPTER 274A) to protect our rights. For accuracy, please visit the site.

First of all, it will take some convincing for employers to continue to employ elderly workers (whose CPF contributions will now also be on par with the younger folks). This could translate into additional business costs for companies. Is there any incentive for business owners to align to this policy? (e.g. tax rebates etc for a % of elderly Singaporeans hired?)

Source: CNA NDR 2019: From retirement age to climate change, here are 9 things you need to know
A few older folks I have spoke to also do not want to work until so old (In their words: Wa lau, work till die meh?). Many are working not because they want to but they have to to make ends meet. There is some disparity here from the narrative that older workers want to work longer.

Another pressing concern is that as an elderly, we may get retrenched in a better job prior to 62. Therefore many will not be holding jobs that make them eligible for re-employment.

This is perhaps better illustrated by this graph taken from the Report by MOM on the [2]Labour Force in Singapore 2017:

In 2017, the number of elderly (>60) employed rose to 14% from 6.1% in 2007.
We somehow have to shift that curve towards the (rather exaggerated) brown one.














The policy changes sounds good on paper (nice in theory), but time will tell if they really pan out as we imagined. Let's hope that it is not too late by then.

Now, this is where the other tool called CPF comes in.

So, What is CPF? Can eat one?

Since CPF was started in 1955 by the British and our first self-governance's Chief Minister David Marshall [3], it has become a much different instrument for Singaporeans. Our living standards have improved, but so has our cost of living. As such, many people start to feel that CPF may not be adequate for citizen's retirement needs.

In my understanding, CPF originally was only meant for catering to the retirement needs of old and aged Singaporeans through enforced savings but has since started to cater for a range of things. (we shall not go into specifics here but just to illustrate that it has evolved with time)

4 major things we can now use CPF for:
1. Public Housing since 1968 [4]
2. Healthcare needs: Medisave started in 1984 [5]
3. Investing for higher returns in 1986 (later became CPFIS) [6]
4. Education for tertiary education (self/children) since 1989 [7]

For full list of timeline changes to CPF, refer to here.

Then and Now: I think we have already liberalised CPF's usage over the years to cover alot of things. 
I think you get the point that CPF has changed already been changed to "GiveUsBack" our money over the years so that we can use it to enjoy certain benefits such as to tend to our housing needs, education and healthcare needs. But, there is a catch. Because ultimately it is still meant for retirement, funds "borrowed" will have to be returned in some way...

So, is CPF enough for our retirement?

Going by current trends, it would be a yes/no. It depends on our own expectations and what kind of living standard one wants to sustain. I would say, it will probably be a No for me. That is why I have started my own planning ahead of time. I would think that CPF is like an additional tool I must understand and put into my own planning as well since we can't get rid of it. Might as well understand how it works and how it can benefit us.

What can the govt do to help us?

To be honest, after role-playing for about 30 minutes as the government in the discussion, I do think that it is not easy for the government to implement a one size fit all or be flexible in our arrangements to help everyone but also not to penalise someone for the mistakes of others so as to be fair (and therefore we become inflexible).

For example, assuming we become flexible for example to let someone take all their CPF out as per in the past. What do we do if these people spend all their money and come back to us? Would we then have no choice but to "punish" the people who managed their own money well to take care of those that did not? It would likely be unfair. I myself wouldn't want to be taxed unfairly to pay for someone who didn't plan for their retirement. Worse, if this is a social norm.

On a side note, I think the government must really take action in educating financial literacy in schools from young. Even at current tertiary education, we could start financial literacy modules that is compulsory for everyone. It can be a module that awards credits (but not graded, just pass/fail) as an incentive for students to take up. You might also want to host talks to engage the youths in universities about policies that are going to affect them.

What can we do to help ourselves?

For me personally, I have seen first hand how Gambling destroys family. At max, I think if the ocassional TOTO draw comes to $8m, buying $10 is acceptable. For a comparison sake, my own mum is a hardcore 4D/TOTO gambler who spends $600-900 per month on it. 😓

My general take is to STAY AWAY from savings detrimental habits such as excessive smoking, drinking and gambling. My smoker friends know that they spend a lot on cigarettes ($14 x 30 x 12 =  $5,040) if we smoke one pack a day. But they cannot help it. It has become a habit. You can go on a good holiday with that, but let's save that money.

Cultivate money saving habits instead. Most people cannot invest because they do not save much at all. We all live in an age where the society tells us to enjoy life here and now, in the present. We crave instant gratification. But there is power in delayed gratification.

How many of us will really plan for ourselves if CPF decides to give back our money today?

I am in a few investing chat groups and I would like to think that I belong to the more financial savvy group of people who actively plan ahead for our finances.

We would THINK that logically everyone would SAY they would plan their own. But, experience tells me that most wont take ACTION and DO.

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In short, I do think that there are no quick fix to resolving retirement adequacy. Given a choice to depend on the government and leave it to doubt, I would rather take responsibility and ownership to ensure that I will have enough when my time comes (and incorporating CPF into that plan).


Until Next Time,

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.



Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 


References:
1. RETIREMENT AND RE-EMPLOYMENT ACT (CHAPTER 274A)
2. Labour Force in Singapore 2017 (2018, January 26)
3.  S.A Lee., J. Qian (2017) The Evolving Singaporean Welfare State SOCIAL POLICY & ADMINISTRATION ISSN0144-5596 DOI: 10.1111/spol.12339 VOL. 51, NO. 6, November 2017, 916–939
4. A flat every 45 minutes. (1964, August 31). The Straits Times, p. 10. Retrieved from NewspaperSG.
5. The impeccable logic of Medisave (2015, August 9), National Day Special 2015 | A toast to an improbable nation: 1984, The Straits Times
6. Cheong, C. (2005). Saving for our retirement: 50 years of CPFSingapore: SNP Editions, p. 152. (Call no.: RSING 368.40095957 CHE)
7. Cheong, C. (2005). Saving for our retirement: 50 years of CPFSingapore: SNP Editions, p. 153. (Call no.: RSING 368.40095957 CHE)

Saturday, 10 August 2019

Budgeting: Why I refuse to spend >30min per month to track expenses

  Posted at  August 10, 2019 2 comments



Updated as of 23/9/2019:
First of all, wishing all fellow Singaporeans and investors a Happy National Day and long weekend holidays!

This long weekend is a welcomed one for me as I am finally able to get some much needed rest and re-calibrate my own investing journey after embarking on a new employment. Now, one of the things I do every month during my payday (or the weekend of that week) is to do a quick budgeting for the next month.

A Budgeting Problem: Tracking Expenses
One question I constantly get from friends and readers is: How do you keep track of expenses?

I'm sure most of us have tried some form of tool for tracking expenses one way or another. But many of us give up because it becomes a very tedious thing to do. Just watch the picture below (you might have done something similar before):

What??? I have to key in every single expense... omg.
The animated GIF image speaks for itself why most expense trackers fail for me. As humans, we are creatures of habit and when you have a 1,001 transactions, such an expense tracker becomes far too tedious:

- You can miss out some transactions
- You will forget some transactions if you do not key it in immediately
- You have to religiously and be very disciplined to key in ALL your transactions.

This is humanly quite impossible to keep up for most people and this is why after a few days, weeks or months we will eventually give up tracking our expenses. Expense app trackers are NOT the best solution.

My Solution: Use a spreadsheet and copy+paste my Bank Transaction Statement each month. 
I encountered a lot of issues initially to budget well because I couldn't keep track of my expenses. Therefore I could not know how much I spend for each category of my expenses and there was no baseline or trending I can spot.

The problem led me to explore the fastest way I can keep track of my expenses and the solution was to simply copy my bank account statement for a specific timeframe (usually the period between each payday is used). This allows me to track my expenses and budget in a matter of less than 30 minutes typically.

A sample copy of my Budgeting/Saving Spreadsheet is available at this link (Make a copy):

https://docs.google.com/spreadsheets/d/1WqjlVN2dUlHYoulqqWJsTdrb7pi1BfcbwH0p4N5FJcI/edit#gid=1639349293



Step by step guide how to use the Spreadsheet:
(UPDATED 23/9/2019) Detailed instructions is available on the Spreadsheet's ReadMe too.

STEP 0: Make a copy of the spreadsheet
Go to File -> select Make a copy (otherwise the file cannot be edited and will be "view only")


This tool is designed to help you to quickly tabulate your monthly spending and allow you to budget your finances quickly (less than 30 minutes)

Note: This Spreadsheet is designed to work on a POSB/DBS account. It is recommended you set up a separate account as a "spendings" account to keep track of expenses easily.

STEP 1: Log onto your POSB/DBS account online.


STEP 2: Go to your spending account and select the range of dates from your last payday to current payday.


STEP 3: DOWNLOAD THE TRANSACTION AS A CSV FILE BY CLICKING "DOWNLOAD"



STEP 4: OPEN UP THE DOWNLOADED csv. FILE. IT WILL BE IN A SPECIFIC FORMAT. COPY PASTE ALL TRANSACTIONS OVER TO UPDATED SHEET

STEP 5: PASTE THE COPIED 8 ROWS OF DATA ONTO THE YELLOW BOX ON THE UPDATED SPREADSHEET.



HAPPY BUDGETING! 😁

Older method (Archived) - problem with merged cells but Step 5 onwards may still be helpful
1) Make a copy of the spreadsheet:
Go to File -> select Make a copy (otherwise the file cannot be edited and will be "view only")



2) Go to your bank account (spending account) and select the timeframe
For me, I use a POSB account as my spending account. I will select the transaction history to give me all my transactions for the date range that I want. E.g. My pay day was on the 23rd every month so I select from every 23rd to the 22nd of this month.



3) Copy out all transactions for the spending period
There may be more than one page so you have to copy all the pages' transactions to the spreadsheet.



4) Paste the transactions on these columns in the spreadsheet
These columns have already been customised to mimic how it looks from the bank account. You will need to repeat step 3 and 4 for each page of the transaction history.



5) Click "Sort A-Z" function to quickly re-arrange all transactions 
This will usually group all similar merchants together by alphabetical order, making it easy for you to just simply tabulate them with a calculator on hand.




6) Example set of transactions: Grab

The "Step 2" column is a column used for quick calculations using a simple excel formula. If you are not familiar with it, you may simply use a manual calculator or the windows calculator. After you taken note of the transaction, you can add them to the "Step 3" table in their respective categories. To return to default sorting, just click "sort by date". I usually colour code them to make a visual note that I have already processed the transaction amount so I can tell which ones have not been done.




7) Example set of transactions to categories: Grab (2)

Key in the respective tabulated expenses into a few bulk categories. This will help you to establish a baseline spending you have incurred on each of the respective categories. Most of the instructions are intuitive and you can feel free to adapt the spreadsheet to your liking.



*Edit 23/9/2019: It seems that now all transactions occupy 2 lines instead of 1 linelike the picture shows below. to get around this issue we need to unmerge all cells and delete the extra rows to be able to sort. 


In the example below, line 4 and 5 was under a singtel bill which took up 2 lines. the second row of line 5 needs to be unmerged and deleted. 





Make your life easier
When you get familiar with this, you will never go back to the tedious expense trackers because it takes far less time to copy + paste all your transactions and simply tabulate them at the end of the month for a mere 30 minutes.

We might not be able to commit and be disciplined enough to make note of every single transaction but most of us can certainly spare 30 minutes in front of our computers on a weekend to tabulate our spending. Furthermore, as we are increasingly going cashless, this method becomes more efficient.

If you have any better methods to keep track of spending or budgeting, do share your personal tips with me and our fellow investors here! Feel free to use the spreadsheet and customise it to your liking. Do give me any feedback if you run into any issues or if this helps you in your savings/investing journey.

Okay. That's one article. See you next time!

Until Next Time,

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.



Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 
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30 Year Old Investor
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About

You don't need to pay anyone/company to have a plan of your own and work towards achieving Financial Independence. Only we alone have no conflict of interest with our own money. "30 Year Old Investor" is a personal blog about a Singaporean's savings and investing journey.


Being the average Singaporean, K.C. is also interested in good food, a little bit of politics and a good slice of humour.

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Disclaimer

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions.

No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website.

"30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website.

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