Newly married and planning to have a child: Questions.

Is there anyone here who might be in a similar situation as this reader?

Hi AK,

Happy weekend to you. I see that you have recently posted quite a lot on saving and contribution to SA for retirement. This has really set me into thinking, seeing the benefits of compound interest. 

However, as I only started to work for 2.5 years and juz got married and got a house, my situation may not be favourable for making huge moves in my savings. Below are some pointers that I may need your input.

1) I did think of volunteering to contribute to CPF thru cash but as I juz started a family, cash flow could be very important especially we are planning to have a kid next year. Would you advise us to still bite the bullet (like seriously) and still contribute or wait till we are more comfortable before we start contributing? We both own some small portfolio of reits.

2) As we find it hard to contribute cash to CPF, how about transfer in from OA to SA lump sum when we get our bonuses to exploit the higher Interest rates? Alternatively we can opt to pay down our house with the lump sum, which lower our loan and perhaps it more worth it as the small monthly payments we are paying now in the initial phase mostly go towards interest. :( What would you do if you are us? Haha

Thanks AK. As usual, look forward to your enlightening reply. :)

Regards,
B

My reply:

Hi B,

Yes, the blog posts are meant to set people thinking. They are not meant to be advice. OK, this is where I talk to myself. ;p

1. Get my priorities right. Now, I have a family and planning to have a child next year. Need money. Budget. Make sure that the money needed for this has been or is being put aside.

2. Do I have an emergency fund? Is the emergency fund able to cover 12 months of regular personal, household and other routine expenses? This would include the necessary insurance coverage.

3. Before I do an OA to SA transfer, check whether there is enough funds in the OA to pay the monthly mortgage for at least 12 months? If there is, the balance, I could think of transferring to the SA.

4. What is the interest rate on my housing loan now? Am I able to get better returns by investing my funds instead of paying down the housing loan? However, ask am I risk averse? Would paying down the housing loan give me peace of mind (which is priceless)?

I hope these questions will help you find the answers you are looking for. :)

Best wishes,
AK

If you have any ideas or relevant experience to share, please leave a comment for us here. Thank you very much.

Related posts:
1. Achieving level 1 financial security.
2. Options for CPF-OA with a new flat on the way.
3. PM Lee Hsien Loong on retirement adequacy.

What to do when you have a hole in your backside?

Last evening, when I was walking back to my car after meeting a friend for dinner, I was stopped by a stranger who told me with a smile:

"Excuse me, you have a hole in your backside."






OMG! I was taken aback!

I looked at him and I didn't know what to say to that.

I mean, how would you react if you were in my shoes?

Black hole?

Of course, I have hole in my backside.

All of us do, don't we?






I wondered if he was trying to be funny.

Anyway, I must have stared at him long enough for him to feel uncomfortable after that.

He gave a weak smile and pointed at the back of my pants.






I turned to look and found a big tear in the seat of my pants!

So, that was what he meant.

I smiled and thanked him for telling me.

It must have happened very recently as I didn't see the tear when I did the laundry over the weekend.






I have had this pair of pants for almost 10 years.

I knew it was getting a bit threadbare and even ratty looking in some parts but this particular tear makes it (possibly) indecent to wear out from now on.

Looks like I will have to part ways with another old friend.






Feeling a bit sad but what to do?

Related post:
Parting with an old friend.