Financial Thoughts
Savings Plan, Is It Really Beneficial?
Most young adults have a savings plan. Well that is what you are sold when you go to the bank with these statements: “I am looking to put my money aside” or “I want to open another bank account so I won’t overspend my money”
The reaction by the people at the bank is a good sale proposal in order for you to sign with them. And guess what, it is indeed what you did, you agree on paying an amount of money every month for the next decade.
Thinking that you have that money issue settled, it came to haunt you back in the near future when responsibilities kick in and you lacking in your cash flows. Then second-guessing yourself what did you really sign up for and having contemplations on whether you should continue with it or stop it completely. But then again you feel it’s a complete waste of the entire amount that you have paid previously, as you will definitely not get back the full amount.
There you go, is that what some of you are thinking? As a matter of fact, I was one of them.
Let’s make things clear, I am not blaming the people from the bank, neither I am blaming the plan itself. They did nothing wrong and not to say that it was a lousy plan either, as a matter of fact, they are all approved and regulated by MAS. Therefore, everything presented is proper and legal.
So what went wrong?
From my own experience, it is simply due to not understanding what I was getting into. Yes, the bank officer did explain here and there but I clearly didn’t understand what I was getting into.
I will say it is the lack of seeing it long term. Not having a plan and rushing into decisions has caused people to suffer certain losses. Be it big or small, it is still a loss. Thus it definitely can be prevented. Thinking it was an easy solution by getting a savings plan when actually you might need it for your first house, wedding or even day to day personal expenses in the near future.
What should be my next step?
What I would say, create a timeline of yourself and also understand what kind of plan you being presented. See and observe whether it is suitable for you.
Whether you want to continue or not with the plan is perfectly up to you. If you need help, do ask for an opinion from a third party. That will give you some confidence in what’s your next step should be.
On the other hand, for those who feel that is indeed a good savings plan, to maintain it and look out for the maturity period. It’s like a pot of gold after saving up for so long. It is a good step when you sign up for such a savings plan, that means that you want to take your financial plan seriously. Kudos to you!
Well, that’s the end of this article. Do share it if you think this is beneficial to your friends and family.
Disclaimer:
I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.
