Tuesday, December 23, 2014

Chit Chat With a 17 Year Old Young Couple on Financial Planning For The Future

I wanted to call this an interview but decided to call it a chit chat instead. I've received quite a lot of emails from young students from as young as 15 with regards to planning their finances and investing. I've always been curious on why some of these young students will realise the importance of financial planning while others will not.

Today, I would like to feature a young couple who's studying in a local Junior College. Yes, you heard me right. They are a couple who emailed me separately and I found out their relationship some time later. The interview questions were answered by the girl herself but they did discuss together beforehand. The below ME represents the girl and HIM represents the guy. They requested to be anonymous. In this interview, you'll get to see what triggered them to start financial planning early in life and how they balance it with their social life.

Let's get started!

1) Both of you are young and already want to start planning for your future. What triggered the thought of it?

Me: Hahahaha mine I don't have one particular trigger it was like a train of thoughts? So like one thing led to another then I suddenly felt motivated to plan for my future.

Ok 1. was that I really want a car in future. My family's car's COE expires next year, before I can actually get a license and drive it so that sucks and I really cannot imagine life without a car. I guess I am pretty pampered. Car to me is not a need but it'll be really convenient if I own one in the future haha. I understand that COE in Singapore is insanely expensive so since I have the benefit of still being a youth I should start planning like right now to reach my goal of owning a car even sooner haha.

2. Was that I worked as a banquet waitress so I witnessed many weddings and I can't be sure if it's true, but Singaporeans are getting married later and later haha. I don't know what's the actual cause of it but I guess the expense of wedding and the life after that is really huge so similarly, since I have the benefit of still being a youth I might as well start planning now.

Him: His parents didn't plan their finance properly which in turn affected the family's living condition. I guess in general, we both realised the importance of managing our finance and planning our future in order to have a future of our dreams.

2) Are you a spender or a saver?

Me: Spender I guess. I think my priorities are really wrong. I spend at the things like clothes bags and save on like food but I'm coping so I guess that arrangement's ok with me haha.

Him: Spender too HAHA he spends mostly on food but he works more than me in the holidays and his earnings are > his spendings so all is good too haha.

3) As a young teenager living in Singapore, there's so much entertainment around and food is getting more expensive especially for young people who likes to go to cafes. Are there any savings tips you would like to share? 

I myself really like to explore Singapore's cafes and people like my sister and her friends really often ask me where I get my money to go cafes. Last year Dec I came up with this plan: Stop going franchises like pasta mania, MacDonalds, Nihon Mura etc when deciding to go for casual dinner.

For e.g. if I were to decide where to eat for dinner tonight with my friend somewhere at my nearest shopping mall, I'd go for kopitiam food (around $2-$3) instead of pasta mania (around $7-$10++) so I can save the money to go cafes when I really wanna relax with my friends/bf. I like to either eat really budget at kopitiam or try new cafes so I'll cut the in betweens (the franchises). Also, I'd cut down on like Starbucks, Gong Cha which people like to buy and drink as they shop haha.

This way I not only save money I cut down on sugar too HAHA. I feel that since I really love exploring new cafes in Singapore, not just for the food but the ambience, I have to make adjustments to my lifestyle so on days where I just want a simple dinner, I'd try and eat cheap or at home. As for my bf, he splurges on food and I'm trying to instil this thinking into him haha.

3) Finance is a boring subject to many people. What made you guys interested in it?

Hahaha well I guess the idea of achieving the life and dreams we want that motivated us to do something about our current lifestyle and planning which includes understanding finance better haha.

4) Where did you learn most of the personal finance concepts such as saving money, investing etc? Does your school offer such classes?

I think in the past, my school (like my pri school) did teach us how to save. But of course it's those 'save 20% of your pocket money' kinda thing haha. As I grow older I manage my personal finance like saving money. I don't have a systematic way to save money which is not exactly ideal...... hahaha oops. I guess the way I save is to like have a minimum amount of money in my bank e.g. maybe this holiday I want a certain amount of money in my bank so once it's around that amount I'd stop withdrawing money from my bank and wait for my next allowance instead hahah. But recently I started a savings plan which I'll elaborate on it later on!

As for investing, I only got interested this holidays cos I always thought that was an adult thing. It was until this holiday my boyfriend told me there are actually people who invest at our age so that got me interested haha. My parents did a bit of investment. More last time until something happened so now they only invest in those stable ones? I'm not really sure either but I know my parents have some experience in it so I talked to my mom who referred me to her financial adviser so I guess from now on I can consult that financial adviser cos she's now my financial adviser too haha. Oh and of course, both of us also read up online (e.g. your blog) about personal finance concept. Nah as far we're concerned our school don't offer any classes on personal finance concepts haha.

5) Are your peers interested in finance stuffs too? If not, are there any ways to get more young people like you to get interested in planning their future? 

I guess in general, they would want money (of course hahahah) but they don't really know how and aren't exactly motivated to search for ways etc. Most of them are choosing the 'trouble-free' way out which is to work to earn money but they are unaware that that's a temporary solution and that planning/saving is more important for the future.

I guess most of them ( I admit I used to be like this too) are more concerned about life now than life in future. I feel that there's really minimal anyone can do to get young people interested in planning for their future. There can be talks and speeches by successful people, by finance consultants etc etc but i think their growing environment and their character plays a big part. If they are surrounded by like successful people for e.g., they would naturally want to be the same.

Then again, character acts as a factor as well, one can be offered many opportunities but if he feels contented with his life or something along that line, they wouldn't wanna do anything more. I don't know if I'm making sense to you haha I'm bad at words. I think the most direct and effective way to get someone interested is when they really look around them and realise there are many successful people and they want to be like them. If they are really uninterested, the talks, speeches, shows, any form of moral suasion will only bore them.

6) Are there any other thoughts you would like to share with the readers here?

Hahahaha I guess the takeaway of this whole interview/post would be, if you fail to plan, you plan to fail, and that applies to not just finance, but everything in life :)

My Thoughts:

You can see how bubbly the young girl is. I enjoyed interacting with them and am encouraged by their energy in life.

For myself, I realised the need for financial planning much later than the two 17 year old students above. I was still obsessed with the camera phones that were in trend at that time. I even bought a $300+ phone for myself at the age of 17.

To realise the need for saving money at a young age is good. Even though they may not have much money, the act of putting aside even a small portion of their allowance will instil a good habit of savings which goes a long way. 10% saved today may only be $10 but it will be a few hundred dollars when they start working.  The next part is to create a financial plan which is achievable for their long term goals. The purpose is to balance saving and spending money. We don't want to end up saving too much and be a miser or spend too much and worry about money later.

Money is not just an adult thing. Young people can start managing their own finances early in life too. If you're a student and reading this, I hope it will encourage you to start your journey to financial freedom too. Nevertheless, for young students, studies should still be prioritised and career planning is important too. Having a good income will give you a good headstart in life. This will be discussed in the next blog post.

Christmas is just one day away. Here's wishing everyone Merry Christmas and a joyful holiday ahead!

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  1. She raised a very important point. Young people need role models. Seems like the current education system doesn't have a personal finance role model for them. However, the good news is that they are looking to you as a role model.(:

    1. Hi MrPhysiotherapist Guy,

      Role models and mentors are indeed important for our lives. I'm just another young guy and still got much to learn. Would definitely help others along the way as much as I can. :)

  2. Hi SGYI

    I couldn't agree more with what Mr. Physiotherapist got to say. Based on what I read, they seem wanting to plan and start for financial planning but somewhat not too serious about it. It appears as if they are lacking the push factor or a good role model to lead them the way. I think you can be a good role model to them so they really turn talks into action.

    It is easy to get discouraged if actions are not taken so they might fall back to the old theirs if that's the case. I hope they push through the case to get serious planning :)

    1. Hi B,

      I agree its difficult to start financial planning at that age. There are just so many other things we want to enjoy and do when we're young. Saving money through the small allowance that students have is quite impossible. They are just saving money from the part time jobs they do during holidays.

      I would think what they need to know at this age is to get the correct mindset towards finance and investing. Mindset is hard to change but should still give it a try. :)