Originally published on dbs.com.sg, 12 Jul 2022

Think about your life now. What changes do you expect to see within two years? Maybe a new laptop or a bedroom makeover? What about in five years’ time? Do you see yourself accomplishing bigger goals like buying your dream home and a fairytale wedding complete with a honeymoon in Europe?

Try stretching your imagination further. Years from now, will you be supporting your child through university or building your retirement nest? All that you have envisioned above are your financial goals for the short, medium and long term.

Financial planning is a personal journey as we have different financial goals and varying needs. However, it doesn’t have to be complicated as once you get started, everything will fall into place with proper planning. Here are the 6 steps to get started on your financial planning journey!

#1: Map out your financial journey
When was the last time you had a good look at your finances? Or have you been too busy at a new life stage – your first home or a recent newborn – to think of reviewing your financial roadmap? It’s not too late as now is the best time to get started.

Supercharged by SGFinDex, DBS NAV Planner takes in all your financial information from CPF, CDP, HDB, IRAS and other banks to give you a holistic view of your financial health. It also empowers you with personalised insights and tips, allowing you to make better, informed financial decisions.

If you need help or want a second opinion, you can meet our friendly Wealth Planning Managers for financial advice that’s based on your financial goals and circumstances.

#2: Saving is the foundation
After setting your financial goals, the first task on the list is none other than building savings as a discipline. This is the foundation from where financial planning starts.

As Warren Buffet once said “spend what is left after savings”. It is prudent to adopt the “Pay Yourself First” approach to automatically channel your savings to a separate account once you receive your salary before you start spending. Depending on your goals and lifestyle needs, you should try to save at least 10% of your income and this savings ratio should be one that you are comfortable with.

You may be saving for many reasons, but do you know the most important one is to save for a rainy day? In the event of an emergency, you should have access to ready cash. It is recommended to have an emergency fund large enough to cover at least 3 to 6 months of expenses or more if you have dependents. If you are self-employed, you may want to increase this emergency fund to cover at least 12 months of expenses.

Your emergency fund does not need to stay idle as you can multiply your savings with DBS Multiplier and enjoy an interest rate of up to 3% p.a. You can also stash your funds in other liquid assets, that is, savings deposits, fixed deposits, Singapore Savings Bonds and any other assets that can be readily liquidated and withdrawn without incurring penalties, fees or a loss in value.

#3: Keep tabs on where your money is going
Budgeting is all about tracking your cashflows and planning how to spend your money. As challenging as it seems, you can start by breaking down your expenses so that you have a better understanding of your needs and wants.

This makes it easier for you to re-prioritise your spending and cut down on “wants” such as fine dining and recurring expenses incurred by telco bills, gym membership, beauty and spa packages. Being conscious of your daily expenses also helps as you may be unknowingly spending a few hundred dollars every month, no thanks to your daily indulgence of a cup of artisanal coffee.

#4: Protect your future
Everyone wants to protect themselves and their loved ones from the unexpected. But many postpone or avoid dealing with insurance because injury, illness, accidents, disasters, and death are taboo topics we’d prefer not to dwell on. However, financial planning is incomplete without a discussion on your insurance coverage. Insurance safeguards you and your loved ones so there is enhanced peace of mind – and you can focus your energy on living more!

But with so many types of insurance plans out there, how do you even begin to shortlist your options? This article can help you get started on your insurance planning and decide which policy is suitable for you.

If you still need help, you can speak to our friendly Wealth Planning Manager to identify and close any gaps and shortfalls between your current and ideal coverage.

#5: Manage your debt
From personal to housing loans, most of us will come face-to-face with debt at some point. As such, managing debt is a foundational cornerstone of prudent financial planning. When taking up a home loan, you should source for a suitable package that meets your needs. If you have an existing home loan, you may be able to reduce it through refinancing. Home loan options include fixed-rate, floating-rate or a combination of both. So, sourcing for an appropriate deal can go a long way in helping you save.

If you are struggling with debts, we can help you work your way out of the endless pile of bills. Rather than having debts with multiple banks, the DBS Debt Consolidation Plan can help you consolidate all your debts under one bank and potentially allow you to save on interest payments.

#6: Make your money work hard for you
If you want to succeed in this financial planning journey, you can’t be working hard alone. Your money must work hard for you as well through investments. Besides growing your money, investing helps to fight inflation. Once you have covered your savings and insurance needs, you should channel any excess money into investments for a higher rate of return. The earlier you start investing, the higher the potential of wealth accumulation, thanks to the power of compounding and by riding out the market volatility over time.

You don’t need a large capital to start investing. You can invest in a regular savings plan with Invest-Saver from just S$100 a month. You can also leave it to our DBS Investment Team of experts by investing in managed portfolios via our robo-advisory platform digiPortfolio. Start with just S$1,000 for the Asian portfolio or US$1,000 for the global portfolio.

If you prefer to build your own stocks portfolio, opening a DBS Vickers account would provide to access 7 key global markets.

Fight inertia and start checking off some items right now to be on your way towards building a robust financial plan - a purposeful and well-thought out action is better than no action!

Check out DBS NAV Planner, an intuitive digital advisory tool to track, protect and grow your money all in one place.