ORD Loh! 2 years have gone by so quickly. Now that I have completed my obligation, I would like to share with you how much I have saved over the 2 years in National Service (NS). With this information, I hope you (or your kids if you are past NS age) will be inspired to start your finance journey when you enter NS.
To give you some context, I served as a sergeant in the Chemical, Biological, Radiological Defence or Explosive Ordinance Disposal unit, during my NS. As such, the allowance that I received could be higher than average. Also, from 1 March 2020, NSF across all ranks had a pay raise of $70 to $120 and my pay after the news was higher than before.
Here is how I did:
At the start of my national service, my allowance was $560. While it was not much, it was sufficient. As I progressed in the army, my pay increased slowly to its peak at $1300. While the amount was not much compared to working professionals, I am always looking forward to the 10th of every month to get my pay.
The first thing I would always do is to set aside most of my allowance to be saved while the remaining amount of roughly $200 would be set aside for my daily expenses like transport fare, food, etc.
Note that while I had a pay increase during my time in NS, I did not increase my expenses as I was able to survive with just $200 ($50 per weekend). This prevented any lifestyle creep which would have hurt my total savings.
In total, I manage to save $19,160 including $800 of incentives I got from my achievements in IPPT and as a Marksmen.
Of course, how much you can save is highly dependent on where you end up in NS and the amount of allowance you receive monthly. I agree that it might be hard to achieve this target.
However, I believe if you put an effort into it, you could save at least $8,000 in NS even though you may receive the most basic allowance and risk pay.
Here’s a case study:
For most Army boys, an enlistee journey starts with close to 3 months in BMT. For his time there, he will receive $580 per month. Once an enlistee is out of BMT, he would receive $630 monthly as a private ($50 vocation allowance).
If all goes well, he would be promoted to Lance Corporal in a few months and receive $650 monthly for the next 15 months. With good performance, he would then be promoted to Corporal and get an additional $50 from the promotion.
In total, an enlistee would be getting roughly $14,150 during his 2 years. And assuming he allocated $300 monthly for his expenses and was able to get the IPPT and Marksmen bonus, he would end of with $8.490 in savings.
Not too shabby.
3 Tips to saving more
National Service takes up 2 years of our life, so why not take this chance to learn about personal finance and start saving up.
Here’re some tips that could help you maximize your allowance:
1 – Start budgeting
Every month when you receive your allowance, transfer a portion of it out as your saving for the month.
The remaining in the account will be set aside for your daily expenses. Personally, I use the Money Manager app to track my money. By using a budgeting app, I was able to track my daily expenses and ensure that I did not overspend for the month.
2 – Identify what are needs and what are wants
With a limited monthly budget, we have to differentiate between what we need and what we want, in order to stay within our budget. Needs are the essentials we need in our life while wants are the things we desire but could live without. As a rule, we should spend on our needs before our wants.
Going to the canteen to eat is tempting especially when food at the cookhouse may not be the nicest option. However, this would result in an additional cost of roughly $5 compared to the free cookhouse food.
Booking in every Sunday can be a chore and you may choose to enjoy a comfortable ride to camp by opting for a Grab. This results in an additional spending of $12 just for a little convenience.
Of course, if there’s extra cash for the month, there is no harm treating yourself to a good meal or buy that nice pair of shoes that you have been eying on. In fact, treating yourself can be a great way to encourage future saving habits.
3 – Read up on personal finance
During NS, you would have some pocket of time here and there. Take this opportunity to learn about personal finance. Go to personal finance sites like Seedly to learn more about how to take charge of your finance. If you are into investing, consider following Dr Wealth for investment insights.
I started off reading from bloggers who blog their finance journey. From there, I started looking online to learn how to invest, how to get insured, and also how to manage my wealth. I am not going to lie, all these took me a while to learn. Learning how to manage your personal finance is not going to be easy, but I believe if you put in the effort to learn, you would be able to do well.
Where is my money now?
If you are interested on how I spent my savings, here you go.
Firstly, I have been allocating $500 monthly to StashAway (a RoboAdvisor). If you are someone who is lazy to learn investing, you can consider using this option.
Next, I transferred the remaining amount I have into my high yield savings account Singlife which currently gives me a 1.5% return. (I previously used Standard Charted JumpStart). With the amount here, I would occasionally use it to buy individual stocks in the stock market whenever it is at a discount.
Last Words
I hope this article inspired you (or your kids) to start your (their) personal finance journey early. I understand that at this age, learning how to manage our finance is not a priority as we still have our parents to help us. However, I strongly urge you to start now as sooner or later you would need to learn it.
So why not do it now where you can take your time to learn instead of making major mistakes in the future?