50-30-20: The three magic numbers.
As we grow up, the concept of finance becomes increasingly complicated. Gone are the days where our only notions of money are the coins in our piggy bank or the weekly pocket money from our parents. Before we knew it, we were sucked into an intimidating whirlwind of finance – banks, bills, loans, interest rates, investment, credit cards, CPF…
Feeling lost? Don’t worry, so are we.
And that’s why we are here to demystify the complex world of finance in our brand new HELP! I’m Shit With Money! series, a podcast under Zodapop by ZYRUP Media.
Firstly, let’s get back to basics, and talk about: How Tf Do I Start Saving Money?!
A popular finance model commonly cited is the 50-30-20 rule, originating from the book, “All Your Worth: The Ultimate Lifetime Money Plan,” written by US Senator Elizabeth Warren and her daughter, Amelia Warren Tyagi. It simplifies our many financial responsibilities into three overarching categories:
1) Needs (50%)
These are bills that are absolutely NECESSARY for survival like food (Dining out not included!), basic transport, phone bills etcetera.
2) Wants (30%)
These are things that you desire and make your life more enjoyable but are not absolutely essential, like a brand new phone or laptop, a gym membership, dining out, entertainment (eg. Netflix, Disney+). They also include upgrades to more expensive food options and modes of transport etcetera.
3) Savings (20%)
These include adding money into an emergency fund in a bank savings account, investing in the stock market or even repaying debts. It is important to ensure that you have at least three months of emergency savings on hand (excluding CPF) in case of an unforeseen event.
The 50-30-30 rule is but one of many finance models. If you are able to follow these suggested percentages then good for you! But, if your financial situation does not allow for this, it is always okay for you to adjust them according to your personal circumstances. After all, rules are made to be broken.
With these numbers in mind, how then can we aim to achieve them?
Singapore is infamous for its high cost of living. With the prices of goods and services constantly rising, saving 20% of our post-tax income is a seemingly impossible task. Hence, ZYRUP has compiled a few of our very own money-saving tips to help you start saving money as a young adult in Singapore.
1) Telegram Channels
Find the greatest deals, discounts and even free stuff by subscribing to relevant accounts.
eg. SG Food Deals, SG Budget Babes, SG Student Promos
2) Budgeting Apps
Download free expense trackers to monitor your spending in each of the 3 categories.
eg. Spendee, Seedly
3) Eat Cheap
Reconsider your food choices – do you really need that cup of bubble tea or Starbucks…? Cook at home or head to your nearest hawker centres for your next meal!
4) Travel Cheap
Try carpooling or taking public transport instead of turning to ride-hailing services.
5) Monitor your Subscriptions
Cancel subscriptions and memberships that you do not use – especially if they renew automatically.
In all, little goes a long way. Saving does not necessarily have to be a tedious and tiresome chore. Be resourceful, set targets, challenge yourself – it might even become an enjoyable process. Just keep the three magic numbers 50-30-20 in mind and have fun saving!
And if you ever need a lil’ company navigating this confusing world of finance, tune in to our HELP! I’m Shit with Money! podcast on Spotify, Apple Podcasts or Google Podcasts for more of our personal takes on money.
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