How To Talk To Your Bf/Gf About Money

Money may be a difficult topic to bring up with your significant other. One of my blogger friend, Lionel from cheerfulegg, has written this guest post exclusively for SG Young Investment. Even I learnt a few tips here. He definitely has gone through this stage with his partner. Enjoy the read!

Every Singaporean couple can easily tell whether they’re in a serious relationship: It depends on whether they’ve had The Talk. You know the one I’m talking about: The one when the guy takes the girl out to a fancy restaurant, takes her by the hand, stares deeply into her eyes, and asks: “Sooooo... Do you want to apply for BTO in Punggol or Sengkang?" Okayyyyy. Things are getting serious here. But what if, after having The Talk, you found out that your girlfriend wants a $110,000 wedding? Or what if your boyfriend insists that he wants a $1M condo - something you know that you can’t afford? Would you break up with him or her? Are you letting money come between you and your partner? Are you putting a price on love?

The Truth About Money And Relationships

Many of us don’t like to talk about money - especially with those closest to us. For example, does your boyfriend know how much you earn? Does your girlfriend know how much you give your parents every month? Have you both talked about the right time to buy a car? Going over these topics can make us uncomfortable, because we’ve been taught by Hollywood that love should overcome all obstacles. It’s okay if your boyfriend racks up $10,000 in credit card debt every month, because hey, you love him, right? The truth is, money has the power to bring a couple closer together, or tear a relationship apart. For example, check out this story about a Singapore couple who spent $110K on their wedding. To pay for the costs, they racked up credit card bills and borrowed from licensed moneylenders. Their expenses for a single day wrecked havoc on their relationship for years:

Trying to clear the debts has put a strain on the marriage and their relationship, Mr Lee said. "I think we have had more fights since we got married than in the six years that we were dating."

These fights can escalate into something more serious: 80 percent of divorced couples in their twenties and thirties cited money as the major destructive factor in their marriages. I’m not bringing these stats up to scare you away from marriage - I think it’s awesome that you’re taking your relationship to the next level. But if you really want to make this work, you’ll have to make sure you’re on the same page when it comes to money. Luckily, talking about money doesn’t have to be awkward. If you do this right, it can actually bring a couple closer together. Here’s a step-by-step guide, including the exact words to say, on how to do it:

Step 1: Talk About Your Dreams

Unless you’re a weirdo financial blogger like me, you probably don’t want to start off the conversation with something like: “Okay. Let’s make sure that we channel an additional $20,492 into our savings accounts to take advantage of the additional 0.5% interest rate." If you’ve never had a serious conversation about money with your partner, it’s probably a good idea to take it slow. Talking about your aspirations is a great place to start. You could say something like:

“Hey, so I was chatting with my colleague today who just bought a house in Tiong Bahru. Great neighbourhood, near the MRT, though slightly more expensive than he expected. That made me think about where WE might want to live in the future, if we get married. I was wondering whether you’ve thought about that before?"

The exact words don’t matter as much as the topics you talk about. Focus on the BIG aspirations - the ones that matter the most to the both of you: What type of house would you like to live in? What would your dream wedding be like? What sort of lifestyle do you see yourself having after getting married? When would you like to retire? Dig deep into the details - get your partner’s thoughts on what that house/wedding/life would actually LOOK like. Remember that it’s not an interview - you’re not there to fire question after question, which can be kinda creepy. Instead, give your own opinions while seeking your partner’s. You could say something like:

“Yes, I think this condo has a fantastic modern design too. In fact, I read this article on Qanvast about how even HDB owners are renovating their houses to make them look like condos on the inside. Do you think that’s something we could consider?"

The goal is to simply understand your partner’s aspirations and to let him or her know about yours. The more details you have, the better. They’ll come in useful for the next step.

Step 2: Research The Costs

Now that you’ve understood your partner’s aspirations, pick 2-3 ones that are the MOST important to the both of you. Then, it’s time to do a bit of homework and estimate their approximate costs. Why is this important? Because anyone can fantasize about their hopes and dreams. But when you put actual NUMBERS to your dreams, it changes the conversation from, “Wow it would be so nice to have that someday….” to “Okay, let’s figure out how to get there together." Estimating numbers might sound scary, but it’s actually a lot easier than it sounds. For example, there are thousands of articles and resources online to help you estimate the costs for any big life milestone. Here are some:

• How Much Is Needed To Get Married & Start A Family In Singapore?
• How Much Would It Cost To Travel The World?
• The Cost Of Raising A Child In Singapore
• Qanvast’s Renovation Cost Breakdown
• HDB resale prices
• What Is The True Cost Of Owning A Car In Singapore?
• The True Cost Of A Wedding In Singapore

Don’t worry about being too detailed in your estimates. Instead, the goal is to get a ballpark estimate of how much your 2-3 big aspirations might cost. This should take you no longer than 30 mins - 1 hour to research. Then, take your findings to your boyfriend or girlfriend and say something like:

“Hey, so I was thinking about our conversation the other day and how we said we wanted a restaurant wedding. I did some calculations and found that it would cost us around $40,000. I’m not sure if I estimated it right, so I wanted to get your advice. What do you think?"

The intention is not to intimidate your partner with a whole bunch of scary numbers. Instead, it’s to use the numbers as a starting point to get his/her thoughts on the topic. The goal is to get your partner to agree to have a deeper conversation about money at a later date. After looking at the numbers together, you could say something like:

“I know this is just an estimate, but it looks like a wedding with 400 guests might be more expensive than we thought. I know this is important to us, so maybe we can take some time to figure out how we can get there together?"

Re-emphasize that you’re not doing this to criticise each other, but to help you both figure out how to achieve your aspirations together.

Step 3: Talk About Money And Set Short-Term Goals

The big day is here! Block off two hours on the weekend to do this, so that you’re both relaxed and unhurried. Agree to come prepared with your bank/insurance statements, and any other financial commitments you currently have. First, start off by recapping your aspirations. Then, go through your documents together to find out what your financial situation is as a couple. Is it really necessary to bring all these documents? It might seem like a hassle, but I’ve personally I found that it helps tremendously. First, it eliminates the guesswork. You don’t have to say things like “Yeahhh… I THINK I have around $20,000 in my savings account.” A quick glance at your bank statement will tell you exactly how much you have. More importantly, it sets the right tone for your relationship. When you “bare it all”, you’re showing each other that you want to be open and honest with each other - and that will translate into other parts of your relationship. What’s next? The easiest way to start is to set some short-term savings goals. For example, if you estimate that you’ll need $40,000 for your wedding in 2 years, that means you’ll need to save $1,667 per month, or around $833 each. If that sounds too high, make a commitment to put say, $300 each into a joint savings account every month, with the understanding that you’ll increase it later as your salary rises. (By the way, if you want a quick, easy way of saving more efficiently - I also wrote a mini ebook on how to automatically save more every month, without having to change your lifestyle. You can check it out here). That’s pretty much it! The goal here is to get your partner to take action - no matter how small - towards saving and investing for the future. The simple action of actually DOING something will make you both more mindful about money.

In Short...

Talking about money may seem like a lot of effort - but trust me, it’s worth it. This could be the person you spend the rest of your life with, so why not invest a few days to get it right? The key here is patience. Approach the topic slowly, listen to each other, and focus on your hopes and dreams. This will set the stage for more open conversations in the future. And when you finally pop the question - whether it’s “Will you marry me?” or “Sengkang, or Punggol?” - you’ll both know the answer in advance.

==== Lionel Yeo is a ramen-slurper, bathroom dancer and financial hacker behind cheerfulegg.com, a personal finance blog for young executives. He has been featured on the Sunday Times, Channel News Asia, KISS 92 and more. He also secretly dances in his room. Check out his free guide on How To Start Investing In 3 Days.

Your Marriage or Your Investment?

This post was inspired by a chat with a friend recently. I was told that there were some young people who are investing the money which was meant for their marriage or wedding in the next few years time. With investment products easily available now, young people can just start their investments from as low as $100 per month.

An example is the POSB invest saver which invests into the STI ETF. Yes, the STI ETF is a good investment tool but the problem with the investments some young people are doing is they plan to invest a sum of money every month and take it out for their wedding in the next 2 years or so. Is this a wise move?


Is it wise to invest the money you need for your marriage?

The answer to the above question is probably a NO. There are a few reasons why we should not invest the money we need for our marriage. I'll elaborate on the reasons below.

1. Investment returns are never guaranteed

I'll focus on the investments of non guaranteed assets such as stocks, index ETF and even bonds. We can never be sure if we will make a profit or loss in investments. Moreover, if our investment time frame is only 1-2 years, its even worse.

When we invest the money we need for our marriage in the next few years, we may have to sell at a loss when the portfolio isn't doing well. Some of us may be thinking what if I make a profit? Then I can have more money for my wedding. We should immediately identify that this is a very dangerous thought to begin with.

2. Investment should be for the long term

1-2 years time frame for investment is definitely too short. 3-4 years is also short. We should probably look at more than 5-10 years time frame for any investments that we make. In fact, we should invest all the way to retirement. It is part of our retirement portfolio.

I know young people want to start investing as early as possible once we know the magic of compounding. Yes, the earlier we start, the greater the compounding effect but always remember that financial planning is not just about investments. It is planning our finances as a whole.


Getting Married and still achieve financial freedom

All of us want to achieve financial freedom and get out of the rat race. We want to grow our money through investments. But now, with marriage in mind, there seems to be a road block. How do we plan our finances such that we can get married and still achieve financial freedom?

In the next few paragraphs, I would share with you my personal plans for the past few years which is still ongoing. But first, there are two likely scenarios for most of us. One likely scenario is we are single and no plans for marriage. The second likely scenario is we are attached and planning for marriage in the next few years. Let's see what we can do for the two different scenarios.


Single and no plans for marriage yet

Being single now means you certainly have more time to plan your finances. Since you don't need a large sum of savings for marriage as of now, you can invest some savings which you have and grow it for the long term. This is the time to work hard, increase your income and save up aggressively.

Being single now doesn't mean you won't get married in the future. What happens when you get attached somewhere in the future? The key idea is this. Most of us will date and plan for marriage in about 3-4 years time when we get attached. Since your previous savings are already invested, you shouldn't rely on that for your marriage any more.

From the time you get attached, start saving up a portion for your marriage and never ever invest that portion into any non guaranteed investments. It is good to put that money in some guaranteed higher interest accounts which will allow you to take it out by the time you need it for your wedding.

I wrote an article on How much money is needed to get married and start a family in Singapore?. You can use it as a guide for your marriage cost or get some information from your friends or family members who have already been through that stage. You'll know roughly how much you need to save every year to get married in 3-4 years time. If you plan $60,000 for your marriage, just save $20,000 a year and you'll be on track to get married in 3 years time.


Attached and plans to get married

If you already have a partner, planning for marriage is inevitable if you feel he or she is the right one for you. If you've yet to save up for a wedding, start now and plan it out with your partner. Know the amount you need and set the targeted time frame to save up that amount.

Rushing into marriage without any planning is not advisable. You'll end up with a lot of financial problems later on. If you're really serious about this relationship, there is no point rushing into marriage without any planning. Of course, some unforeseen circumstances may happen and you may need to rush into it but I shall not go into that here.

Some couples take the short-cut and think they don't need to plan ahead because there are zero interest credit instalment plans available for their wedding in Singapore. But, always remember that you need to pay back the amount you borrowed later on in your married life and don't forget you probably need to pay for other things too such as housing loans, your own bills and all that. It is always easier to save up before marriage when you don't have much commitments yet.


My plans for marriage and financial freedom

Long time readers of my blog will probably know that I'm at the single and no plans for marriage stage now. This gives me a lot of space to plan my finances. My personal plan is to achieve a $100K investment capital base and start saving for marriage when I find a partner. I probably can save up for marriage in less than 3 years and still have $100K to invest by that time.

Do note that the savings amount for marriage and the $100K are two separate accounts. After catering to my marriage needs, I still have money which I can invest and grow for the long term. Never put your marriage needs and investment into one account. It becomes confusing in the end.

On the issue of financial freedom, passive income have to be created. I've written about passive income in quite a few of my previous articles. You can read all my articles on passive income from the link here. A fellow blogger, ASSI AK has also recently written a good post on How to get $50K in passive income by investing in stocks? If we can get $50K in passive income a year, we could quite possibly achieve financial freedom and choose not to work by then.

Ultimately, all of us have different lifestyle and needs. Plan accordingly to your lifestyle and you'll know whether its achievable. If you want a $100K wedding vs a $50K wedding, the planning will be completely different.

Your marriage or your investment? I hope you know the answer now.

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Related Posts:
1. Why extreme savings is more powerful than investing
2. How much money does a couple need to earn in order to afford a $300,000 HDB flat?

The 3 Big Decisions in Life - Marriage, Buying a House and Retirement

Our Life Journey

Life is like a journey. When we're born, we were raised up by our parents and take up the role as babies for the first few years. For the next decade, we assume the role as students and go to school, do home work plus sit for exams. After we graduate from school, we start our journey in the corporate world and work for the next 30-40 years before retiring at the end. I'm sure most of you are familiar with the situation i've just described. Some of you may still be students, some of you have just started working while some of you may already be in your retirement years.

Life seems like a cycle. It begins and it will end one day. However, in the midst of it, there are important decisions which we have to make. These decisions are important as they are big decisions which will make or break your life. So what are they?

The 3 biggest decisions that involves money

In schools, we learn all the languages, mathematics, science, history subjects and much more. These knowledge are important for later parts of your life. Learning a language such as English allows us to communicate effectively. Mathematics allow us to solve problems and science gives us the knowledge of how stuff works.

Credit: www.cbc.ca

However, in schools, most of us have never learnt anything about money. How do we budget? How do we use credit wisely? Most of us are at a lost on how to manage our finances or some of us do not see the need to manage our finances. If schools do not teach and your family do not teach you too, then most likely you'll be lost in it.

The good news is now there is a new syllabus in secondary schools to teach about financial literacy as announced previously by Deputy Prime Minister Tharman Shanmugaratnam. The new syllabus is called food and consumer education and it replaces the home economics course which we had in schools last time. This is being offered to secondary 1 and 2 students only. If you would like to know more about the program, just Google Food and consumer education and you'll be able to find the relevant information by Ministry of Education. This is certainly good news to me as students get to learn how to manage money wisely at a young age.

For the rest of us, we may not be so fortunate to learn how to manage money in schools. But, this knowledge is still necessary especially if you're planning to get married.


Planning to get married

As we grow up, we begin to make decisions on our own. Some are big decisions in life. The first big decision which involves money that a lot of us make is to get married. Some of us spend a large sum of money on a wedding. Others spend a minimal amount of money for their wedding.

I wrote about the cost of a typical wedding in Singapore before. Read: How much money is needed to get married and start a family in Singapore?

So how much was the cost?

The cost of wedding was as high as $56,000 

The cost of $56,000 shocked many people. There are couples who spend $100,000 on a wedding while some others spend only $900. Wedding cost can be subjective and it depends on individual couples on how much they want to spend on it. What we need to take note is to have a proper budget before your wedding. Borrowing and spending money you do not have for a wedding may be the worse decision you'll make as the debt comes back to haunt you after your marriage. So, budget the cost, prepare and save up that amount before getting married may be a better choice. If not, settle for a cheaper alternative wedding if you really can't afford it.

I had many good comments from readers sharing their views on getting married. One particular comment that i thought was good to share was this:

"20 years down the road, the same old money issues will surface again and again. It all boils down to living within your means, and forget about ‘face-value’. A standard wedding hotel dinner packages in 1990 starts at $800 to $2,000 per table. Instead of the usual wedding, my wife and I booked a small corner at a café in a hotel for buffet dinner, 30 pax at $23.95 per pax. That’s our wedding banquet. No fancy outfits. No fancy decorations. But we had joy. The monetary gifts covered the entire wedding dinner. Our first home was a 5-years-old re-sale 3 room flat costing $67,000 at Bukit Batok. The only renovation cost were the few cans of paint and labour provided by friends with beers as payment. For the first 10 years of our marriage our focus was on raising our beautiful children, career advancements, savings and savings. The holidays were simple, Malaysian beaches and towns.

 My cousin spent $65,000 on a lavish wedding in 1992. Fancy restaurants, overseas photography packages, skilled professional hairstylists, Hong Kong air-flown make-up artists etc. She divorced her husband in 1995. Re-married in late 90s, this time spending $85,000 on wedding banquet. Renovation and furnishing for her new home came close to $200,000. She yet to have any kids as they’re planning to split.

 Today, my wife and I are in our late 40s. Happily married. Our daughter is 20 and son is 15. We’ve no less than 8 properties spreading over Singapore, Australia and Malaysia. No less than 3 fancy cars and annual European holidays. I’m not writing to show-off. The point that I’m trying to make is marriage has nothing to do with the amount of money one spent on the wedding banquet or renovating/buying a new home. It has to do with love. If a couple loves each other they will sacrifice and compromise …….. to achieve their dreams. The dreams of building a sustainable family. The dreams of bringing up children in a warm lovely home. The dreams of building assets with no whatsoever issues of insufficient money. To do this, the first step is avoid debt. Forget about excessive big wedding banquet with exorbitant photography/video packages. Just make it simple, dinner with family and close friends with less than 5 tables. Be yourself. Be merry. Marriage is about love not the amount one spend on his or her wedding. Also, the family you’re going to build is not judge by the renovation." 

A simple wedding can also lasts a lifetime of happiness. It's not about the wedding. It's about the life after that.


Planning to buy a house 

The second biggest decision we have to make is buying a house. This is a cost that most of us have to pay for the next 25 years. I wrote before that for a $300,000 HDB flat, the monthly instalment will be $1225 per month for 25 years. Not forgetting that we need to pay a 10% down payment of $30,000 first. This seem like a scary thing for young couples who have just started working or worked only for a few years.

I also stated the cost for a house:

Total upfront cost for house: $53,000-$65,000

This includes the down payment and also the renovation and furniture cost.

Nevertheless, i said before that it is possible to save up for a house as well as for a wedding. It takes around 2-3 years for a couple to save up in order to start a family. So, plan early to avoid hiccups.

Again, it is important to budget. If you realise you can't afford a 4 room flat, then there's always an option to get a smaller one.

I came up with the estimated cost and wrote on which income bracket is suitable for which type of house:

1) A family income of less than $2000 (2 Room flat)
2) A family income of more than $2000 but less than $4000 (3 Room flat)
3) A family income of more than $4000 but less than $5000 (4 Room flat)
5) A family income of more than $5800 (5 Room flat)

This was important because of the limit to the amount of debt you can take also known as the Mortgage Servicing Ratio(MSR) for HDB flats. It is capped at 30% of your gross monthly income which means you cannot take on debt more than that.

I also wrote on the various housing grants available which will help us lessen the burden of owning a house.

Read more on the housing grants here: The affordability of housing in Singapore and the various housing grants available


Planning for Retirement

The last big decision we have to make is planning for retirement. Many of us find out how to book the wedding package from the hotel, how to apply for a BTO HDB flat but most of us do not plan for retirement or do not know how to plan for it. But, it is actually the most important aspect of our lives after working hard for the past 30 years or so. Imagine if you start working at the age of 25, retire when you're 55, you would have worked 30 years. If you live till 85 years old, that would be another 30 years in retirement. Your retirement years is actually equal to your working years. 30 years in retirement is a long time and if you do not plan for it, how are you going to have enough money to live through it?

But of course, some would say i can work till 65. So retirement years are shorten to 20 years. That is still a long time. Then, there will be people who say they won't live that long so don't have to plan for retirement. But the problem is, none of us can know how long we can live. What if you really live to a ripe old age? The truth is, life expectancy is getting longer.

Credit: propertywealthunlimited.com

Cost of Retirement: $1 Million Dollars?

I first heard of this 1 Million amount about 8 years back when i was studying for a diploma in one of the local polytechnics. I was listening to a financial advisor who told me that i would need $1 Million dollars by the time i retire 40 years from now. I was confused at this idea because i thought who can really save up a Million dollars? Does that mean everyone has to be a millionaire just to survive in Singapore?

To find out if this is true, we just have to do a simple illustration.

Total Savings: $1 Million
Retirement age: 55 years old
Expected life expectancy: 85 years old
Years in retirement: 30 years
Amount available for spending per month: $2777.77 (($1,000,000/30years)/12 months)

According to the simple illustration above, with $1 Million dollars you can spend about $2777 per month for the next 30 years. Is this enough for retirement? I think this amount should be quite enough to live by bearing in mind that inflation will happen through the years and things will get more expensive in the future. If we have $500,000 only, then the amount available for spending during retirement will be halved at $1388.

Now, $1388 seems like too little to live by especially if its 30 years from now. A $3 chicken rice may have become $5 or $6 by then. So perhaps, $500,000 is not enough for retirement?


CPF for retirement

By now, all of us should know what is the CPF after all the discussions and attention that it had gained through social media in recent months. PM Lee also gave a detailed explanation on the CPF during his National day rally speech. In essence, if you've met the minimum sum of $155,000 currently, you would expect to get an estimate of $1200-$1300 per month from age 65 to the day you pass away. As the minimum sum increases, the monthly payouts will increase as well. It was announced that the minimum sum will increase to $161,000 next year.

Still, $1200 per month may be too little for retirement. Some may also think they don't want to retire at age 65. If you want to retire earlier, then planning early is important. We just have to take into consideration that the CPF will supplement our income from age 65. To me, it is only an additional bonus and not a necessity where we depend on it fully for retirement.


How do you plan for your retirement?

There is no exact way to plan for retirement and that's what makes it confusing for many people. We always want to find the model answer to problems but some how, some things never have a model answer. One way i can think of to plan for retirement is to set a target amount you want to achieve and work towards it. If you want $500,000 at age 55, then set that long term target and also set a few short term targets. For example, $100,000 at age 30, $200,000 at age 40, $400,000 at age 50.

The figures may seem hard to achieve at first but if you break it down further, it'll seem easier. For $200,000 at age 40, let's say you start work at age 25, from age 25 to age 40 it'll be 15 years. So, to achieve $200,000 by age 40, you need to save $1111 per month for the next 15 years. Seems achievable now?

The above is the traditional way to retirement where you save up so that you can draw on it for future spending. You will draw on your savings for retirement. There is another better way where you still save up but this time round, you do not have to draw on that savings. This is done through creating passive income where you will have income for the rest of your life even without working.

Are you prepared for the 3 big decision of your life journey?

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Related Posts:
1. How much money is needed to get married and start a family in Singapore?
2. A couple should buy a 3 room HDB flat if combined gross income is less than $4000
3. How much money does a couple need to earn in order to afford a $300,000 HDB flat?
4. All about CPF minimum sum and CPF life

How much money is needed to get married and start a family in Singapore?

Starting a family of your own is part and parcel of life. It sounds interesting to get married, get your first house and then have children. It may seem exciting but it actually requires a lot of responsibility and commitment from both the husband as well as the wife.

We all know that wedding and buying a house may be the 2 biggest expenses which we will face in our life. If we can have a glimpse of the cost involved and prepare in advance, then I think we can go through this process with our dearest more easily and with lesser stress. Wedding is a romantic event and owning your own house is a dream for many. These are both lovely events. The last thing we want is to quarrel with our spouse over money matters. With a little preparation, i'm sure we can indeed have a lovely and romantic time of our lives.

I've researched on the various wedding and housing costs which is required for any young adult planning to settle down and start a family. I hope this will help you in preparing for the 2 biggest event of your life.

Wedding 

The wedding below is an estimated cost of a typical Chinese wedding with banquet. 

1. Wedding Package: $3000-$6000 (wedding dress, evening gown, photoshoot, wedding album, photo frame)
2. Wedding Bands/Rings: $2000-$4000
3. Wedding solemnization: $3000-$5000 (rental of gown, photographer and videographer, bridesmaid dresses rentals and so on)
4. Wedding Banquet: $30,000-$36,000 (30 tables for $1000-$1200 each)
5. Honeymoon: $5000 

Total cost for wedding: $43,000-$56,000

Does this cost sound shocking to you? If it is, then you're not prepared for a wedding. I guess this is the average cost most couples will incur for their weddings. $43k is the minimum for an average wedding with banquet. For weddings, of course you get Ang Baos (red packet) from your guest and relatives. If each guest gives $80-$100, then you'll get back $24,000-$30,000. 

This leaves us with a net cost for the whole wedding at:

Cost of wedding after collecting Ang Baos: $19,000-$26,000. 

This is just an estimate as how much your guest will give really varies. It is hard to know exactly how much red packet you will get. So, always factor in that you may get lesser red packets. 

House

Those who've read my blog earlier would know that I have a blog post on the estimated cost of buying a 4 room HDB flat in Singapore. For convenience sake, I will just list down the upfront cost which you may need for your new house.

1. Down payment for new 4 room flat: $30,000
2. Renovation & miscellaneous fees: $15,000-$20,000
3. Buying of furniture and household items: $8,000-$15,000

Total cost for house: $53,000-$65,000

Down payment for your house can be paid by CPF. If you have the 10% down payment already in your CPF ordinary account, then you do not need to fork out additional cash. Still, after paying for the down payment, typical cost for your new home will be around $23,000 to $35,000. 

Combined cost to start a family in Singapore

Cost of Wedding + buying a house = Range of $76,000 to $91,000 cash (excluding down payment paid by CPF and excluding Ang Bao collected)

This is the cost that is expected for starting a family in Singapore. If you're planning to get married and buy a house, have you got the amount of savings in cash already? Do you have the $30,000 in your CPF OA account? The above cost does not factor in the Ang Baos money that you'll be getting. I've excluded it because you will not know how much Ang Bao you will be getting. Any amount you get back is a bonus and this will be your extra savings for your new marriage. I don't think you want to start a new family with zero savings right?

Most couples will have to share half of the cost each. So it's $38,000 cash for each person if they spend $76,000 in total. If you plan to get married in 3 years time, you'll roughly need to save $12,700 per year per person. 

This brings me to the point that you need roughly 3 years to prepare and save up in order to start a family. That's if you can save roughly $12k per year. If you can't, then give yourself a longer time to prepare. 

If you have a partner now, start talking about the preparation for the new life. For the guy who's serious about the girl you love, start planning and preparing now. Face up to reality that you need money for your new family which you're going to form. For the girl who's serious about the guy you love, plan together with your future husband. Sit down together as a couple and discuss on your new family plans. 

With proper preparation, you're on the way to a great new life. There will surely be lesser arguments when the time comes for you to get married and buy a house. 

What if I really can't afford it?

The cost may be too huge for some people. Wedding can actually be cheaper and you can save a lot by sourcing for cheaper deals. The wedding banquet will be the most expensive among all the cost. So if you can't afford it, then go for a cheaper banquets at a restaurant instead of a hotel ballroom. Some may even prefer not to have the banquet and go for a simple wedding with lunch reception only. That's your choice. 

There's a good guide on wedding banquet price list for 2014 here: http://singaporebrides.com/wedding_banquet_pricelist.php 

Some restaurants have banquets priced at $500-$800 per table. It may be a more affordable alternative. 

On buying your first house, it is important to calculate your budget so that you do not overstretch yourself. If you can't afford a 4 room flat, buy a 3 room flat instead. Read:  A couple should buy a 3 room HDB flat if combined gross income is less than $4000

Advice on debt

I know there are 2 years 0% interest free credit card instalment plans out there for your wedding. Even when you buy furniture from places like Courts, there are interest free instalment plans. It may seem like a short cut and an easy way out for many couples who do not have enough savings. However, remember even if you take the 2 years plan now, you still have to pay up the amount in the future.

Let's say if you spend $76,000 in total and you take a 2 years interest free instalment plan. This works out to a monthly repayment of $3166 per month. Yikes. That's a lot to pay! Not forgetting you still have to pay $1000+ for your housing loan! Can you afford to pay $4000+ per month?

I hope you get the idea from the example above. Debt is a burden and in the event if you lose your job, you'll be in greater trouble. But anyway you can't take on too much debt now as the Monetary Authority of Singapore (MAS) has restricted the total debt you can take to be 60% of your gross monthly income. This includes your housing loan, student loans, credit card debts etc. 

Conclusion

Definitely there is a lot to plan for the 2 biggest event of your life. Give yourself roughly 3-4 years to plan beforehand. Don't wait till its too late and you succumb yourself to take the short cut of taking on massive debts. Financial problems can be avoided. A family that manages finances well will be a happy family. 

P.S: Have you got married recently? Share your experiences by commenting below. How much did you spend on your wedding and on your house? Are there any tips on cheap and good deals? Are there any mistakes you've made before? Let other readers know so that everyone can learn together. 

Share this article with your friends who're planning for their new life. 

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1. A couple should buy a 3 room HDB flat if combined gross income is less than $4000
2. How much money does a couple need to earn in order to afford a $300,000 HDB flat?