School Didn’t Teach Me: What to Do With My First S$10k in Savings

So you’ve saved up your first S$10,000—now what? Capitalise on that momentum with these five suggestions that will set you on the path towards even greater financial success.  

There’s no question that being able to attend school was instrumental in moulding me into a productive member of society. 

Those long years of education not only gave me the basic skills and knowledge needed to land regular employment, they also helped me develop and hone certain useful traits, such as  patience, discipline and the capacity for hard work.

After a period of sustained employment, I started to accrue a tidy pile of money, as one does. But what I should do with the fruits of my labour wasn’t on the curricula; there weren’t worksheets on how to properly allocate my money in a beneficial way. 

I’m not blaming anyone, but I wonder if I would have been so ready to throw my money away on nights out, toy model kits, and other frivolous pursuits, if I had been given a heads up about proper money management sometime between PE and recess time.

So because school didn’t teach me this, leaving me to learn the hard way, I’m sharing my thoughts about what you should do with the first S$10,000 you’ve earned. 

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Pay off debt

If you have unsecured debts (such as credit card balances, personal loans, or study loans), the best use of your S$10,000 is to pay them off. 

The insidious thing about debt is that it stakes a claim on a portion of your future income, hampering your financial ability until the debt is paid off. This can cause delays in achieving other personal and financial goals.  

The most pressing debt you should clear are those that charge compounding interest, as interest is added on every dollar that remains unpaid. If such debts grow large enough, you'll see no end to paying them off. 

Credit card balances are the biggest culprits here, so be sure to prioritise paying them off. 

Next on the list are personal loans, study loans, or any short-term debt that has a fixed rate of interest. These types of debt do not accrue as long as you keep up with the instalment payments, so there is less urgency to pay them off. 

However, they still exert a financial obligation during their tenures, so paying them off early—or even making a partial repayment—will free up your finances and give you a clear runway ahead. 

Seed your emergency fund

You’ve probably heard about the importance and usefulness of having an emergency fund more than a few times. Seeing how you have a substantial chunk of change on your hands, now’s your chance to start one of your own. 

Sure, the idea of putting aside money in case bad things happen seems silly. But when Life throws you any one of several financially burdensome—and frighteningly common—emergencies, you’ll wish you had those few extra grand handy. 

The alternative would be to dip into your savings, possibly throwing your other plans off track. Or you might have to turn to a credit card, which puts you in an undesirable situation (see above).

You don’t have to commit your entire S$10,000 into your emergency sum if you don’t want to. The important thing is to get one started. 

Don’t be too timid or stingy here—a minor or inconsequential amount may not provide the draw that is needed to stay the course. 

Instead, you’ll want to seed your emergency fund with a meaningful sum, one that is large enough to motivate you to reach the recommended amount, i.e., six months of your barebones expenses.

Start an investment portfolio

You’ve worked hard for your money. Now it’s time for your money to work for you—by putting it into an investment portfolio. 

There are many different investing theories, methods and channels, ranging from the basic to the complicated. But since this is your first S$10,000, it’s a good idea to start things off with some easy, low-effort choices.

One of the easiest and most convenient ways to invest is to use a robo-adviser. These are online platforms that utilise algorithms to comprehensively manage your funds. They can also make recommendations on portfolio strategy, according to your preferences and risk tolerance level. 

And in case you’re worried you’ll be stuck dealing with a chatbot, know that there are also human finance professionals around to keep an eye on things. You may also request one-to-one advice and support should you need it.

If you prefer a more hands-on approach, you can try investing in the stock market through an online brokerage. Be warned though, there’s quite a lot to learn about stock market investing, given the vast range of investment products available. You should take the time to study the products you’re interested in, and test the waters with small amounts before going in fully. 

One very important thing to note is you should learn the difference between trading and investing. The former is focused on making short-term moves to generate profits, while the latter takes a long-term approach, concentrating on capturing gains while preserving capital. 

You may be wondering if you should call up that financial adviser that you met a couple of months ago outside the bus interchange to draw up an investment portfolio. Well, there’s no harm listening to their advice, but don’t be hasty in signing up for the plans they will invariably recommend. 

Insurance is great for financial protection, but it’s effectiveness as an investment vehicle is less clear. Educate yourself on the pros and cons of insurance policies that claim to offer both protection and investment in one before signing up.

Invest in yourself

Another advantageous thing you can do with your savings is to invest some of it back into yourself. 

The idea is to improve your skills and knowledge, which will expand your career options. Completing a course or earning a certification may qualify you to lead important projects, leading to greater recognition and rewards. Having special qualifications may also enable you to transfer over to different business units, giving you a precious opportunity to deepen your knowledge of the industry. 

You can also invest in yourself in other, non-work related ways, such as by picking up hobbies and recreational activities. These are important in helping you manage stress and maintain good mental health. Fitness is also another important area to invest in, as a healthy body is your best tool for enjoying a thriving and rewarding life.  

Reward yourself

Saving up S$10,000 is no mean feat, so you should recognise and celebrate your achievement by treating yourself to a small reward.

Upgrade your mobile phone, buy that gaming laptop, book a spa day, go for a staycay at that swanky new hotel… You get the idea. 

It’s indulgent, yes, but it’s about creating a virtuous feedback loop. Treating yourself allows you to feel powerful positive feelings, which can be used as potent motivation towards bigger achievements. 

As you bask in your reward, make a pact to aim even higher for how much you want to save next. Rinse, repeat, and profit.  

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