It talked about the advice given to young people by Hong Kong's richest man - Li Ka Shing.
In the article, he talked about splitting our pay into 5 parts, each for a different purpose
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30% - Living Expenses, paying for food etc
20% - Socialising, paying off phone bill + creating connections
15% - Learning, buying of books or signing up for courses/training
10% - Travelling, going overseas once a year to broaden your horizon
25% - Invest, SAVE to INVEST or start a Small Business
He used a guy earning RMB 2,000 (roughly SGD $400) as an example of how to split the money.
His example is for people living in Hong Kong or in China.
In my perspective, there are some parts I think we can change to suit it to Singapore's context.
The allocation below is for a Singaporean whose take home pay is $1,500 after CPF deduction.
Some adjustments were made to the allocation and I do not recommend following strictly to the guideline because every individual is different and every month is different.
If you spend more on 1 month, make sure to balance it back the other month.
I think a little flexibility in the allocation is okay, but not too big a difference, less than 5% movement range for each category.
But do try and keep the last part (INVEST) intact or increase if possible, because that is for the future, YOUR FUTURE!
55% ($825) - Living Expenses, paying for food, transport etc (a)
10% ($150) - Socializing, paying off phone bill + creating connections (b)
10% ($150) - Learning, buying of books or signing for courses/training (c)
10% ($150) - Travelling, go overseas once a year to broaden your horizon (d)
15% ($225) - Invest, SAVE to Invest or start a Small Business (e)
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a) The unfortunate part of not earning much is that a huge portion of our pay goes into necessities, rendering us with minimal for other things.
Items like groceries, utilities, meals etc often take up a huge portion of our pay.
Find ways to cut cost and keep them within the 55% budget!
DO NOT OVERSPEND!
b) Li Ka Shing advises us to treat 2 people who are able to help us in our career to a meal each month. Allocating about 3% of your pay to treat each person sounds reasonable. And hopefully, if your phone bill is not too expensive, it would probably be less than 5% of your pay
c) Singapore's National Library has got a good variety of books, thus there is not really a need to buy books. Save that money for other use, go to the library to borrow more books to read and learn.
There are also currently a lot of e-courses online that are free, some even available via YouTube. Do make use of these sites to learn and save on the learning expenses.
Of course, if a certification is required, then go for the paying courses that provide certificates.
The government is also providing a $500 subsidies for qualifying courses, make good use of it!
Money saved here should go to the 'Invest & Save' portion
d) Depending on your income, travelling every year might not be possible, unless it's to neighbouring countries. Either it is travelling every 2 years OR you could roll over your money to the Invest or Learning portion.
e) Read up on basic investments, long-term investments. Read up on our post on investment under our 'Investment' tabs to learn more!
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