By Ming Feng

Put aside all the “propaganda” you see online today on investing, trading and fanciful financial products. The first step towards financial freedom should always start with savings.

  • If you are someone with a great level discipline to save, great! Kick off your savings routine today!
  • If you are someone who lacks the discipline to save, set up your own system to set aside a portion of your money before it reaches the “leaky bucket”


How much savings should I have accumulated?

To answer this question, I probably have to blatantly visualise your life in front of you.


Instead of coming out with an absolute amount of savings, we base the savings amount on your individual yearly expense. This amount varies for each individual depending on the lifestyle which one chooses to lead.

To give a good projection of how much one needs to save, we took into account these factors:

  • Singaporean male to go through two years of National Service (NS)
  • Lower savings rate for early stage in life (lower pay, higher financial commitments such as student loan, marriage and housing loan)
  • Higher savings rate closer to retirement
  • Retirement is at age 62
  • Life expectancy of Singaporean male is 80 and female at 85 years old

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A typical male fresh graduate – Savings rate

Using a male fresh graduate as an example due to him having the least time to save (36 years to save up 18 years worth of expense). From there, we work backwards to give a projection of how much you should have saved by a certain age.

To get an exact number, simple use:

(How much you need to survive per year) X (Number of years)

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A typical female fresh graduate – Savings rate

Taking life expectancy into account, females tend to live longer than their male counterparts. 🙁

With this, female face a steeper saving slope due to the need to save an additional five more years worth of expense.

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Further reading: Are you saving more than the average Singaporean?

Do take note if you fall within the below demographic:

  • Monthly income of S$4,056 (inclusive of employer CPF contributions) and above
  • 25 years old and above

97% of middle to high-income earners above the age of 25 years old are saving between 30% to up to 49% of their salary. How much of your salary are you saving?

Seedly’s Tips: How to determine my best savings rate?

Assuming your determination to save up brought you down so “far” this article, here’s a simple exercise to determine your saving rates.

Taking into account that different individual has different

  • salary
  • financial commitments (housing loans, student loans)

A good exercise to determine your best saving rate is

  1. Start off by saving 10-15% of your salary.
  2. Challenge yourself and increase that savings percentage by 1% every month
  3. Keep doing so till it hurts if you were to increase it by another percentage.
  4. That will be your best savings rate

A simple rule of thumb will be: As your income increases, your savings rate should increase too. This is possible if one’s total expense increases at a slower rate than his income increment.

This article originally appeared on Seedly’s blog.