Do you know how much you spent every month, every quarter and every year? By knowing how much you spent, you can choose to decide whether to scale back some expenses so that your total expenses do not exceed your income every month. You would want to set aside some sum of money for savings every month. You may not want to rely on credit from the banks or credit card issuers which charge high interest when compared with what you can earn if you place your money in savings account.
If you are planning to retire, you would want to know whether your retirement fund can support your monthly expenses.
The expenses will change over time and need to be reviewed when there is a change of circumstances, e.g. having your first child or your child has started work.
The following provides a list of possible expenses. They are not exhaustive.
Family & Personal Expenses and outflow (both revenue expenses and capital expenditures)
Housing (TC & S&C Charges or Management Fee & Sinking Fund; Property Tax)
Utilities (water, gas, electricity)
Groceries and Eating out
Other Household expenses (e.g. TV Licence; Newspaper)
Public Transportation (Bus; MRT)
Car (petrol; repairs; insurance; road tax; radio licence; car wash; ERP)
Telephone and Internet (fixed line; broadband)
Fees and Interest on Credit Cards
Loans (Housing Loan repayment covered by CPF or otherwise; monthly hire purchase installment for car; others)
Insurance premium (life; term, endowment, medical)
Education (school fees & miscellaneous fees; books; stationery)
Allowance for children
Allowance for parents
Personal Expenses (haircut; clothes)
Entertainment (movies; pubs)
Other (e.g. pets’ expenses)
From the list, you estimate the monthly/quarterly/yearly outflow for each item and then convert to Total Annual Expenses. Divide this annual figure by 12 to arrive at estimated monthly outflow.
The above do not cover capital expenditure like buying a computer, TV, household appliances, etc. Some money will need to be saved to able to buy these items.
Written on 10/23/2006 9:54 AM
Copyright © 2006, the author known as LKT in Singapore.
The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.