Not long ago, I spoke with some younger friends about how insurance will become a much more important topic once children enter the equation.
Upon knowing that I’m from DollarsAndSense, the youngest person in the group sheepishly admitted to me that she hadn’t yet bought any insurance for herself, despite having started full-time work about six months ago. However, she is thinking about her future plans as she had recently booked a BTO flat.
It reminded me of this newly launched Pursuing a Well Lived Life campaign by Prudential. One episode features a pre-retiree mother and her young adult daughter, Abigail, who is just entering the workforce. Abigail admits her strategy is rather straightforward — earn, save, spend within her means, and try to put some money in an insurance savings plan.
I realised that financial stability is not much of a worry for young individuals, and understandably so.
At their age, if we allocate our salary appropriately (like what Abigail has done) so that we have enough to spend, save, and invest, we will find ourselves comfortable and confident in our future.
But is this enough?
I think financial stability is personal and depends on our own needs and aspirations.
In my younger days, my then-girlfriend (now wife) and I made a concerted effort to spend below our means. This enabled us to quickly build up our savings for big-ticket expenses like our wedding and home renovation. It also allowed me to afford a significant pay cut — which happened when I left my corporate job to work on DollarsAndSense full-time.
Besides saving and investing, I made sure to protect what mattered most to us. For example, I got a private integrated shield plan
upon marriage to protect myself from any hefty hospital bills, and purchased term life plan
with a critical illness rider
to ensure that our home mortgage could be paid off if something happens to one of us.
Financial Stability as an Entrepreneur
Thankfully, DollarsAndSense has done well (so far), but the entrepreneurship journey has not been easy. It is financially risky. To mitigate some of these risks, I made sure I had other safer financial plans to fall back on in the long term, like CPF.
CPF contributions offer a fairly high, stable, and risk-free return that compounds itself over time to build up long-term savings that can be used to pay for home mortgage and eligible healthcare expenses and increase your retirement nest egg.
I also review my financial portfolio regularly to ensure that my changing life stage needs are catered for. It goes without saying that with the arrival of each child, we expanded our family’s insurance to cover them too.
The Importance of Financial Stability Across Different Stages of Life
I hope my story has been relatable and helps you think about what suits you. Whether you are a young working adult in your first job today, a new parent to little ones, or are about to enter the golden years of your life, I believe financial stability requires deliberate planning so that we can enjoy life confidently.
A robust financial plan that is diversified and balanced will help withstand unexpected life shocks.
Find out more at Prudential's Pursuing a Well Lived Life website.
The information in this article does not necessarily reflect the views of Prudential. Prudential does not represent that such information is accurate or complete and should not be relied upon as such.
This article is for your information only and does not consider your specific investment objectives, financial situation or needs. We recommend that you seek advice from a Prudential Financial Consultant before making a commitment to purchase a policy.