5 Things You Should Do When You Start Working

Hi Everyone!

The purpose of this post is to share my personal experience on the things that I believe you should do in order to save extra income when you start working. This is just my personal experience in terms of the things that young working adults should do in order to have some savings for future expenses like wedding, house, car, family and etc.

Also, one more thing, you do not need to earn substantial amount of money in order to build your saving fund. You can either start small or if you earn less. If you earn more, save more, that's simple. Of course, don't worry about catching up with your peers or friends who are earning more than you. Go at you own pace when following the things that I mention, don't rush! Because slow and steady also can win the race. Well the race is the goal that you set for yourself in terms of future expenses or retirement fund.

Here we go!


1. Track Your Spending

This is the first thing that you should do when you get your first job. It is important to set a spending budget for yourself so that you can set aside some money for your expenses and the rest will go to your saving account. 

When you do your expenses planning, do make sure that you try it out for 2 to 3 months to ensure that the amount that you allocate will not disrupt your daily activity or making yourself uncomfortable. Also don't go too extreme whereby you drink plain water for your lunch rather than getting a good meal for yourself, don't ever do that. It is always better to set a reasonable amount for your expenses.

I started off quite late as during the first few months of working, I did not keep track of my spending and I just spend whatever I could without thinking about building my own savings. However, after reading some financial post and forum, I realize it is important to have such habit in saving money, thus, I started keeping track of my savings in spreadsheet and soon after I create a website to monitor my own savings. (As shown below)

2. Having Spending Account and Saving Account

A continuation on the first point, after you have your expenses finalized, create two account, whereby one account will be using for your monthly spending, and another account will be using for pure saving. This will ensure that you won't accidentally touch those money that you plan for saving. Of course, if there is an emergency needs for using extra money, do go ahead and spend it. 

My personal experience for this part is that I tend to overspend with no control if I mixed my saving and spending account together as one. Because when you see that there is sufficient funds in your account, you will unexpectedly overspend and exceed your budget for the month. Of course, I realized it during my 3 months trial period and decided to split them up into 2 different accounts. 

3. High Interest Saving Account

A continuation to the previous point, the next thing you need to do is to do some research on the type of account that enables you to earn higher interest. There are several banks offering quite an attractive interest rate with conditions applied to enable you to earn 2% to 3% interest per year.

Banks like OCBC, offers OCBC 360 account whereby you can earn up to 3.25% per year or more as shown below

URL for more info: http://www.ocbc.com/personal-banking/accounts/360-account.html

UOB One account also offer similar type of interest rate, with up to 3.33% per year as shown below

URL for more info: http://www.uob.com.sg/personal/deposits/chequeing/one_account.html

Bank of China also provide similar type of interest rate as well, with up to 3.15% or more per year as shown below

URL for more info: http://www.bankofchina.com/sg/pbservice/pb1/201510/t20151023_5857863.html

Of course there are other banks which provides saving account with good interest without much activities required like CIMB, Standard Chartered bank and etc. So do the necessary research to see which one suits you the best before applying.

Currently, I am using OCBC 360 (lazy to change) and UOB One account as I have exceeded $60,000 in OCBC 360 so the excess amount I move it to UOB One account. Currently I am earning around $125 dollars per month (on the interest itself), which basically covers my concession card per month or 3 to 4 bills being covered.

4. Investment in Shares and Bonds

If you are comfortable and understand very well regarding the risk in shares and bonds, I would suggest you to go for it. However, do not treat it as a gamble by trading, no doubt that you can earn quite a huge sum of money (if you know how to trade) but you can burn badly as well because no one can predict the market movement. So go for low risk low return first, slowly build your dividends so that you can make money to work hard for you. 

For starter, I would suggest going for Singapore Saving Bonds  or if you want higher returns then you can consider STI ETF (there is a risk for STI ETF as share price might drop due to bad economy, just like shares) .

For Singapore Saving Bonds, it is risk free as the capital is guaranteed (read more about it at http://www.sgs.gov.sg/savingsbonds.aspx). Although the returns is pretty low but you can put some money in it for diversification in your portfolio. The best thing about this is that there is pro-rated interest rate when you withdraw before the interest due date.

Personally, I have invested $5000 in Singapore saving Bonds and around $2,800 in shares, which gives me about $108 per year. Although is quite little but slow and steady wins the race!  

5. Set Your Goals!

Rather than aimlessly building your saving fund / retirement fund, try to have some short term goal and long term goals in mind so that at least you have a target to achieve in every milestone that you have set for yourself! This makes it more interesting to measure how far you can go and whether at the end of the day, will you be able to achieve those goals that you set for yourself! It is like gamification whereby you make the process like a game in order to achieve your goals in building up your saving fund / retirement fund.

Personally, I did my own goals in order for me to have a target to aim for. My long term goals are listed in this URL: https://jyklmoneyblog.blogspot.sg/p/goal.html and my short term goals are listed in the website that I have created as shown below

So these are the 5 things that I believe you should do when you start working, as it will help you to build your funds for your future! Do share with me some of your tips or other methods so that we can learn from each other!

OCBC 360 New Changes

Hi Everyone,

From today onward, there will be a some changes for the requirement for getting the interest.

This is how OCBC 360 works previously

By satisfying these requirement, you are able to obtain 3.05% pa. The capital limit for this is $50,000. Many people had been benefited from this, me too as well, although is just 5 months, but is better than nothing at all. However, in April, OCBC announce the new changes for these requirement which changes the whole game on how we going to play it in order to maximize the benefit from it.

So whats new about OCBC 360? The picture below will show you everything that you will need to know about the new OCBC 360 bonus interest catalog.

There are a few things to note, firstly the capital limit increase to $60,000. Great isn't it! However, the downside is that the interest bonus for bills and credit card spending seems to drop by half. As a person like me who do not get insured or invest with OCBC, I would probably only get 2.25% (0.05% is the based interest). In order to see how much I will earned from this bonus interest, I will do a simple calculation on the calculator that OCBC provides.

Let's say I have the based amount of $30,000 and include salary, bill payment, credit card payment and 1% incremental from previous month.

As you can see, the interest that I will get is $58 per month. Well it may seems small amount but if your balance is lets say $60,000, you will get $116.28 per month, which is still not too bad. So is up to your decision whether to stay with OCBC, For me I would because nothing much changes just that I will get lower interest bonus and also need to spend more for my credit card. Well, lets see how this goes :D

Strategy Plus a Little Update

Hi Everyone,

First for the update of my passive/side income this month which is over $200++!!, $280 to be exact. The main portion comes from the profit after I sold my DBS shares and also the money that I have received from OCBC 360 interest. For OCBC 360, next month will be the final month for me to get the 3.05% interest, which is quite a pity since 3.05% is quite a good interest rate for us to get. But what over is over, we can only look forward to what I can do with the 2.05% or probably more depending on the two additional criteria that OCBC will be announcing in May 2015. Up to date, I have successfully achieve my target of having $120 passive/side income per month which is quite a good achievement for me. Will continue to monitor my own progress to ensure that I will it the target for the next 8 months.

OK! After a mini update on my status, now I will talk about my strategy, my strategy in investment and savings. The reason why I talked about this topic because I have heard from many people in the forum talking about their strategy in terms of investing. Some people want fast cash, which is why they bet on pennies while the others might have other strategy. Although newbies might have the urge of getting fast cash, thus, betting their money on pennies. But for me, I am going for blue chips and reits partly because of dividends and partly because of stability. However, I am still learning on investment, thus, I only put less than 30% of my cash to investment while rest of my cash sits in the bank to collect fat interest (one more month to go). 

So I believe slow and steady wins the race, so lets get down deeper, am I a long term investor or a trader? I believe my style is more towards a hybrid because my main goal is still dividends however, whenever a share or a counter (depending on what you used to say), hits my target point (one year worth of dividends + a bit of profits), I will let it go, which is what I did to DBS. The reason I do that is because firstly is to get my realized gain and secondly, I want to get the additional money to reinvest to gain more interest early. For example, lets say 2.05% for OCBC bank and I put $180 (profit from DBS) in it, with the compound interest, I believe I can get extra few dollars in a few months time. (I am measuring based on the time where I gain the yearly dividend from DBS. Although is just few dollars, but money is money. Certainly, reinvesting is also good but one more point I will take into consideration is the dividend rate as well as the volatility of the shares. DBS is too volatile for me so I prefer to shift to OCBC instead, a rather stable and less volatile than DBS.

Each people have their own way of investment, for me, I think betting on blue chips and REITs will be the best for me to start with :D How about you?

Adjusted Projected Passive Income

Hi Everyone,

Due to the huge adjustment from OCBC 360, my projected passive income (in Dividends Section), will be largely affected because most of my cash are in OCBC 360. So after doing some calculation based on the interest rate of 2.05%, I have calculated at an average monthly interest of around $61.50. Personally, I believe is still quite alright since the risk is super duper low and I will be looking forward to the two new criteria for earning additional interest. 

From my point of view, I believe that it will goes the same way as what DBS does with it's multiplier programme, in other words, I will have to open an trading account with OCBC or if they allow blue chips investment plan, I will gladly follow it. (But lets just see how it goes)

At the same time, I am looking forward to the new Singapore Saving Bonds (SSB). If it comes out in the this coming quarter or next quarter, I will put 80% of my cash into Singapore Saving Bonds if the interest rate is more than 3%. 

So either way, I am still trying to find out the best way to maximize my passive income by looking at various low risk options. 

OCBC 360 Interest Rate Down to 2.05%?!?!

Hi Everyone,

Today I have received a news about the upcoming revised interest rate for OCBC 360, which will be down from 3.05% to 2.05%.

Here is the changes that I have gotten from OCBC website: http://www.ocbc.com/personal-banking/notices.html

Although they have change the current interest rate of paying bills and credit card expenditure from 1% each to 0.5% each, I am still looking forward to the two new interest categories that they might be coming up with. So for now, we can only see what are the new interest categories, if the new arrangement is not to my advantage, I am ready to focus on putting it to Singapore Saving Bonds if the interest rate is more than 2.05% :D

OCBC Bank

Hi Everyone,

After a long period, I decided to go with OCBC Bank which I have bought 300 shares of it. OCBC shares, I will keep it for long term because it has over 3.05% dividend yield (3.3%). The reason why I bought OCBC is because I am currently using OCBC 360 and Frank credit card. So, in the sense that I am it's customers and I hope that OCBC will do well in the future, 

Although I bought at a quite expensive price, but since this is a long term investment, I will average down when necessary so that it will drive up my dividend yield. 

Now currently I have two banks shares (DBS and OCBC) which I am quite proud of because DBS is doing very well and will sell it soon if the time is ripe. The reason why I wanted to sell DBS is because of it's low dividend yield, I would, might as well put it in OCBC 360 or buy other shares with higher dividend yield, like OCBC, to earn my passive income. 

Of course, many people mention that bank shares are for capital gain, but for me, I am looking at both sides of the world. If both dividend yield and capital share increase, it would definitely benefit me a lot. 

Welcome OCBC on board!