Money Journals: How I Saved S$100,000 by Age 30

This article is a real-life account of my dear friend, Calista Ng, who has kindly agreed to share her story of how she achieved this milestone. Everything in this is factual and no form of sensationalism or misrepresentation is added.

Living in one of the most expensive cities in the world and saving money is one of the hardest things to achieve. There’s always a swanky restaurant to check out or an overseas store that’s finally opening an outlet here.

As a teacher, while I was not paid as much as my friends in banking or consulting, I figured out other strategies for working towards my financial goals.

Before I share how I managed to reach this goal within 5 years of work, let me give some context on how it all started.

Back in 2015, I was given a book called 4 Hour Work Week by Tim Ferris. That exposed me to ideas like geographical arbitrage and financial freedom. I started going down this rabbit hole and became so inspired by the dream of financial freedom I decided to set a goal for myself – to save $100k before 30.

I was driven by two reasons: to build a financial buffer (for emergencies or if I decide to quit my job), and to accumulate capital to start investing.

How did I achieve this seemingly impossible goal?

To be frank there are only 3 factors you can manipulate:

Increase your income
Decrease your expenses
Grow your investments

Back then, I didn’t have such clarity, but instinctively I did what I felt was right.

I started to aggressively look at my budget and expenses. I also thought hard of ways to increase my income. I had a gameplan and I followed it.

At the start of 2019, I became more keenly aware that my ‘deadline’ was looming, and it was a make-or-break year. At that point, I had already saved about $80,000. That meant saving about 60% of my take-home pay to hit my target. It was like running a marathon and seeing the finishing line in the distance.

Finally, in Sep 2019, just one month shy of my 30th birthday, I saw my bank account add an extra digit for the first time.

I hit my first $100k!

It felt surreal staring at those numbers, as anyone who has been working towards a single goal relentlessly would tell you.

I have many strategies to share, but let’s start with my top 3 strategies that enabled me to reach my financial goal.

Strategy 1: Having a side hustle

From my university freshman year till 2019, I have been teaching tuition classes.

While an additional $500/month might not seem like much, when you compound it over the decade that I was doing this for, it significantly boosted my ability to save.

Saving $500/month = $6000/year = $60,000/ decade

Don’t underestimate the power of a side hustle. While I’m not certain that I did earn an extra year’s worth of income, my tuition income allowed me to still have a quality lifestyle (going out for dinner and drinks, being able to travel), while leaving extra money to squirrel away.

Strategy 2: Tracking expenses

I have been tracking my expenses for as long as I can remember. It used to be an extremely tedious pen and paper task, but now I use an expense tracking app on my phone.

Check out the Planner Bee app here

I track every single expense, even a $1.20 Kopi C.

This way, I know exactly where my money goes each month. That has allowed me to accurately pinpoint the major leaks in my cash flow, and make targeted decisions to limit expenses in a particular category.

It might seem like a no brainer, it is literally the bedrock of budgeting and financial planning. For example, you’re trying to lose weight. Two months in, despite your ‘best efforts’ you haven’t lost any weight. Your dietician advises you to keep a food diary, to find out what are the foods that are causing you to not be able to stick to your diet properly.

Same logic here with financial planning. Awareness is the first step to changing your lifestyle.

Strategy 3: Saving money on rent

At this point, my local readers will be like ‘huh I’m already doing this by living with my parents!’ And my expat readers might be wringing their hands in exasperation.

The reality is, whether you are a local or foreigner, we are actually more or less on the same level in terms of cash flow. Expat teachers I know here have a starting monthly pay of approximately $4500. In contrast, local MOE teachers have a starting monthly salary of approximately $3000.

For me, I started at approximately $2800 in 2014 as a trainee teacher, and my last drawn pay was only $4800 ($3840 after CPF). If we really do the math, expats still have it much better in terms of expendable income, and hence the ability to save.

However, one of the biggest traps I see many expats in Singapore fall into is to rent a beautiful condo apartment. While it might look and feel good, is it the best idea? If you are one of those blessed with a package that includes a housing allowance, lucky you! If not, splurging $2000-$3000/month on rent will not bring you closer to financial freedom.

Back to my point, by choosing to stay with my parents, I was able to save $700-$1000/month that would otherwise have been allocated to rent.

We should be spending no more than 30% of our income on rent.

While I was able to save that 20%, I could not escape the mandatory 20% contribution of my income to my CPF account. This brings me back to the same conclusion, how we choose to spend the remaining 80% of our take-home income determines our level of financial independence. By increasing my income, tracking my expenses, and,in-turn, reducing my expenses, I hit my goal of $100k by 30 in 5 years.

To be honest, this is an arbitrary number that should not be the end goal of our financial planning.

The bigger question is: Are you willing to sacrifice short-term gratification for long-term gain?

PS. I started off with about $10k in my bank account when I started work in 2014. This was money from CNY angbaos (which were only $300/year), money saved from tuition, and other part-time work during my university years.

PPS. While my monthly starting pay is lower than those in the private sector of teaching, we do get more bonuses. I received a $10k bonus at the end of 2018 which significantly contributed to my goal. I saved 90% and spent 10% on something I had been wanting to get for a while.