How to budget well while serving NS

If you’ve only got a minute:

• Your monthly salary as an NSF provides the perfect opportunity for you to learn about budgeting and managing your finances.
• You can set aside savings from your monthly income to build up your emergency fund – make the most of it by using a higher interest savings account.
• Tracking your expenses allows you to better understand your spending habits and patterns.
• Use the digital financial advisory tool in digibank to make your financial planning journey hassle-free.

A rite of passage for Singaporean males, National Service (NS) is often viewed as a period of time where they serve the nation, and in so doing, make the transition from “boys to men”. For many of of them, this is most likely to be the first time they receive a monthly stipend not from their parents.  

The excitement of earning one’s own keep can lead to a temptation to indulge – splurging during nights out and over the weekend. However, this it also provides the perfect opportunity for full-time NS men (NSFs) to learn about managing their money which all begins with budgeting. 

If you are an NSF, here are 5 key tips for you!

1. Save before you spend

Depending on your goals and lifestyle needs, it is a good rule of thumb to set aside at least 10% of your monthly allowance as soon as it is credited into your bank account. This is also known as “paying yourself first” and ensures that you build up some savings instead of spending the full amount of your salary.  

Having said that, the amount you set aside should be one that you are comfortable with. If you are unclear of how much that is, work backwards from your expenses then settle on an amount that won’t require you to dip into your savings regularly to make up for your spending habits. 

You can also consider keeping your savings in a separate account from your spending account, like a higher interest savings account. This separation makes it easier to keep track of how much money you have left to spend each month, while also making your idle cash savings work harder. 

2. Track your expenses, no matter how small

Tracking and reviewing your expenses on a monthly basis will help you learn more about your spending habits and patterns. Having a clear overview of the categories you are spending on will give you a better idea of what you can cut back on if you want to increase your savings rate. 

You might be surprised how small indulgences like a cup of bubble tea each time you book out, or ordering food via delivery can quickly add up to a sizeable amount over time.  While cutting back on these expenses will mean increasing your savings, it does not mean you have to deny yourself of little pleasures at all costs.  

Plan for these by working them into your budget in moderation – this way you can still have little treats without needing to dip into your savings that have been set aside. 

To have a better idea of your spending trends over a longer period, you can also review your financials every quarter or half a year. If your circumstances have changed, take steps to adjust your savings and spend targets.

Read more: Habits to embrace in your financial journey 

3. Always be prepared for an emergency

If you are already in the habit of saving, you will know that a little diligence goes a long way.  

As the amount of your savings steadily grows, you might feel compelled to purchase a big-ticket item as a way to treat yourself. This is all fine but spending all that money without due consideration could leave you in trouble in the event of an emergency. 

Before splurging on a big-ticket purchase, ensure that sufficient money is set aside for a rainy day. Also known as “emergency funds”, the recommended amount to have for a start is between 3 and 6 months of expenses. For NSFs, 3 months might be a good starting point to aim for. This is because it is generally harder to save with a smaller allowance, so the focus should be on building a habit of disciplined saving. 

4. Save smart

Most regular savings account offer an interest of 0.05% p.a. on account balances. Save smart by utilising higher interest savings accounts like the DBS Multiplier Account hand-in-hand with a POSB Save As You Earn (SAYE) Account to make your savings work harder for you.

Do this by designating the DBS Multiplier as your salary crediting account and make retail purchases using PayLah!. After that, you can open a POSB SAYE account and set up auto debiting to transfer a fixed monthly savings amount from your Multiplier into your POSB SAYE Account.

POSB Save As You Serve (SAYS) offers a range of curated solutions to help NSFs save and manage their finances. Meanwhile, this is also a good time to start doing some research and reading up on investments for when you are ready to.

Read more: How to build passive income streams 
Find out more about: POSB Save As You Serve (SAYS) 

5. DBS Plan & Invest tab in digibank

Budgeting and saving may sound tedious and restrictive, but it doesn’t have to be!

The digital financial advisory tool in digibank helps you track your saving and spending, and also analyses your financial health in real time. It automatically works out your money flows, provides money and investing tips, and projects your income flows so you can achieve holistic financial wellness.

Read more: Making Financial Planning Simple
Find out more: Plan with digibank

Ready to start?

Check out digibank to analyse your real-time financial health. The best part is, it’s fuss-free – we automatically work out your money flows and provide money tips.

Plan with DBS  Plan with POSB

Speak to the Wealth Planning Manager today for a financial health check and how you can better plan your finances.

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Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.