It has been ranked amongst the top cities to reside in. Singapore has the highest costs of living in the world. These costs seem to be on the increase. Even for costs such as food, housing, healthcare, petrol and basic needs. However, the only thing that remains stagnate is the salary. Nearly all Singaporeans would be in agreement with this. This makes it extremely hard to save up every month. This is owing to the monthly commitments and bills as well.
About half of Singapore’s population has little to no savings. And this is according to an article by Singapore Business Review. These polling results are saddening. Fortunately, this isn’t an end-all situation. It is still possible for you to turn the financial situation around. It’s time you get started and make this happen. You will need to start growing an emergency fund. And you will be grateful in the future.
How To Build Your Emergency Fund
There’s no shortcut when saving up for an emergency fund. It all comes down to several factors. These include the financial situation, your discipline. And your determination plays a role as well. An emergency fund could take a little longer to build. And as such if your monthly income is acceptable. Yet the monthly expenditures are quite high. But, everyone will start from somewhere. Thus it is important to start growing your fund now. This is since it’s hard to predict future events.
Assuming that, you have fixed earnings of S$4,500 each month. However, your monthly liabilities total about S$3,500. That leaves an amount of S$1000 each month. This amount can go to your emergency fund. For you to save up to 6 months’ value of your expenses. This you intend on building your emergency fund. It then means you will need about S$21,000. And this will take you 21 months worth of savings. This is when you are you are saving S$1000 each month.
How Much You Need For Your Emergency Fund
First things first, it’s good to have a working figure for your emergency fund. But what will be considered enough funds? No amount is considered as the right amount. However, you could follow the guidelines. And also it depends on the take home each month. For someone who gets a fixed monthly income. The likelihood of making savings for an emergency fund will be easy. This is when compared to individuals who do casual part-time jobs. With a fixed salary for each month, it will be much easier. This is because you’ll have estimates to work with. This will show the amount you’ll be expecting every month.
In the end, the best way to go about it is by growing your emergency fund. The amount should be a minimum worth of 6 months of expenditure. This is when you factor in the remaining savings for each month. That is after you have deducted your monthly expenses. These include things like groceries, insurance, transportation, utilities, credit cards repayments etc.
Why Is Emergency Fund Necessary
Accidents can happen at any time. Thus anything could happen at any time. And at times when you are least financially ready. And unless you can predict what will happen in the future. There is no way for anyone to know when an emergency will arise. It will only take a major event that will drain your finances. This could leave you in debt. It is at such times that you may need to consider funding resources. Approaching your family and friends can be an alternative. But do consider the amount you need. At times family and friends may not be able to help.
Before you give up, there is always an option. And one option could be taking out an instant personal loan. Or the urgent payday loans offered by the licensed moneylenders. Although this won’t be the best alternative, but admittedly it will help solve your present financial problem. And a lot faster than the other options like the banking institutions, since the loans processes are easy and approval fast.
The emergency funds act as a monetary buffer for you. Since it will protect your savings from unexpected circumstances like:
Loss of job
Singapore is facing an economic downturn. Thus the downsizing of companies is rising. When faced with retrenchment. Even with one month’s salary compensation. You will be expected to hold about 6 months in savings. This is after you deduct the monthly expenses. This amount will help keep you afloat financially.
Most people In Singapore are insured by MediShield. And they are well able to use their Medisave. However, you will need to get a certain amount of cash. This will help pay your expensive bills. It will, however, depend on the conditions. The class of the ward and length of the stay in hospital counts. All these will easily tap into your savings. However, you can make use of a personal loan. Or payday loan to help you fund your medical expenses. Thus you won’t use your savings.
Auto repairs or Home Appliances
Repairs to your car and aircon maybe rather draining. Since the cost could mount to 3 digits and even 4 digits. Though it will depend on the circumstances you are in. Even then you could approach a licensed moneylender. They will be ready to help with your financial needs.
For this reason, you always should have an emergency fund.
Keep in mind that it isn’t all about the speed. But it’s about the process of getting there. This is regardless of how long it will take you. In the end, you will reach your goal. You might some distractions along the way. However, you to realize that it will benefit you in the future.
You may have some free time during your off days. You could consider taking up a side job. This will help complement your income. Thus it will help you in achieving your goal. You always should have an emergency fund. The emergency funds will be a monetary buffer for you.