How to save $10k before ORD

As a NSF myself, I am always interested in reading articles about finances meant for NSF or youth in general. I recently chanced upon an article by The Woke Salaryman. In the article, he shares about the best things one can do for themself during NS. Among what is shared, saving $10k by ORD is one of them. This is something that some, including myself, hope to achieve by ORD.

Many would wonder how can an enlistee save $10k by the end of service? This is especially so if one is an Admin Support Assistant (ASA) or Supply Assistant (SA) by vocation. I agree that it might be impossible to achieve this target but some did.

It has been 1 year 3 months since I enlisted in the Army in July 2019 and I have saved close to $10k. I am neither a combatant nor a specialist or officer. I am an enlistee who is an ASA by vocation. With 7 more months till I ORD, I am here to share with you how I saved close to $10k before I ORD.

Basics: Allowance

We need to start off from the basics. 

Any calculations below are meant for Enlistees who are ASA or SA by vocation as they take longer time to promote compared to other enlistees.

Just this year, all NSFs and NSmen receive higher monthly NS allowance in recognition of contributions. This benefitted the most for personnel enlisted from April this year. 

Enlistees will stay as a Private for about 8 and be eligible to promote to Lance Corporal so long one has completed BMT and Vocationalised.

They will receive a $580 rank allowance and $50 vocation allowance for the first 11 months. This means $630 every month or $6930 for 11 months. Prior to this increase in allowance, a Recruit or Private only received $560 every month.

Enlistees will be a Lance Corporal for the next 8 months before able to promote to Corporal so long they meet the requirements. For the next 8 months or so, their rank allowance will increase by $20 and thus one will receive $650 every month or $5440 when they are a Lance Corporal. 

Take note that every serviceman will receive a 6.15% bonus on its allowance after serving for a year. For Lance Corporal pay, the bonus only accounts after 2 months into the rank. 

When enlistees become a Corporal until they ORD, they will receive $700 for the remaining months of service. Assuming that he serves 2 years, he will receive about $740 for the next 6 months and that will be $4440 after accounting for a 6.15% bonus for serving for a year.

An enlistee would have received about $16000 by the time he completed his national service. For one to save $10k, he will need to save at least $400 and spend the remaining $230 every month. Does one have a life outside camp with just $230 to spend on every month? 

In this article, you will hear first hand experience on how I managed to save $10,000 in 17 months and how I keep my expenses low.

#1 Start budgeting and spend within your means

Now that we have established the fact one has to save at least 62.5% every month in order to save $10k before ORD. For specialist and officers, they definitely can afford spending more to save the same amount.

We need to start doing budgeting. Budgeting is about how much we want to allocate into different purposes or buckets. If you refer to the image below, you will see that any inflow of cash for the month will be split into Savings, Expenses and Investment.

For the case of expenses, some will allocate even more on how much they would want to spend on transport, food or shopping. As I do not want to restrict myself in spending a certain amount on food for a month, I always keep my budgeting as simple as it is. 

It is not just about budgeting that will make you successful in managing your finances. I believe that having the discipline to spend within your means even if you do not have a budget to follow is the key to success. One must be conscious about how much he is spending for the month and try to resist the temptation to spend even more when the limit is about to hit.

I believe that spending within one’s means can be achieved by living as frugal as possible. There’s always something that you will need to sacrifice to achieve a goal. 

#2: Spend on needs, less on wants

Living frugally also means deciding on what needs to be spent and identifying the wants that we are willing to spend and within our budget. 

We need to eat food to keep ourselves going for the day, we also want to eat nice and good food that can be expensive. When living frugally, it is not that you cannot enjoy these foods you are craving for but you should do it in moderation so that your expenses can still be in check. 

When we are in camp, there is always cookhouse food that we can go for that is available for free. However, sometimes we want to eat food from the canteen or mess.  No matter how much you hate cookhouse food, you do not have a choice because you are trying to save money. 

Now that we have identified our needs and wants, we need to know that sometimes wants can become needs. 

We need to take one specific mode of transportation to travel from places to places, but we also want to travel comfortably and reach our destination fast. Sometimes needs can become wants. For example, taking Grab or cab instead of public transport when you are running late so that you can reach on time. 

#3 Sign up for High Interest Savings Account

I have shared about high interest rate savings accounts at great lengths here. In my 1 year NSF milestone article, I shared about how I started off with CIMB FastSaver when I was as young as 16 years old and earned a few dollars every month for the next 3 years before the Jumpstart account was introduced.

 A few dollars of interest are considered insignificant to many people as it does not cover at least a meal for the month. However, if you were to look at the bigger picture, it is literally every cents count. In this low interest rate environment, you are better off signing up for high interest rate savings accounts than keeping your money in POSB savings account earning 0.05% per year. 

You may refer to an article that I recently wrote on the best savings products which offer higher interest rate. The savings products mentioned in the article are different from the typical savings account that we know of. Some of them are cash management solutions like Stashaway Simple or  Endowus Cash Smart. Some are universal life plans such as Singlife, GIGANTIQ or Singtel Dash EasyEarn which offer savings and insurance benefits. 

When it comes to universal life plans mentioned, one aspect I will look at is liquidity. It is a known fact that it is very difficult to replicate the same liquidity a typical savings has to offer. Having used Singlife for more than half a year, I would recommend one to sign up for a Singlife account as it offers 2% (from 1 November) for the first $10k. For more information, you may refer to the article where I explain more about the plan.

When signing up for a Singlife account, you get to receive a $10 credit into your account. If interested, do contact me for more details.

#4 Pay with a debit card that offers high cashback

I believe that there are not a lot of debit cards that offer high cashback on any transaction. Many NSF should have a SAFRA DBS Debit Card when the staff from SAFRA came down during BMT to promote their packages. SAFRA DBS Debit Card offers up to 2% cash rebate in Safra$ where you can use it to offset purchases on the spot at 6 SAFRA Clubs or participating merchants within SAFRA Clubs. 

Do you know that other than SAFRA DBS Debit Card, MCO Visa Debit Card offers up to 8% cashback on all purchases and one can get 100% Spotify or Netflix rebate depending on different card tiers? 

I got myself a Ruby Steel MCO Visa Debit Card and have been using it for more than half a year. I did not regret taking the plunge in staking for MCO coins (now it is changed to CRO coins) to receive benefits such as 2% cashback on all transactions and 100% spotify rebate. 

You might have heard of Wirecard shutting down its operations in Singapore. As MCO Visa Debit Card was issued by Wirecard, I feel that (CDC) has managed the situation very well. When news broke out that Wirecard is shutting down its operations in Singapore, CDC immediately stopped credit/debit card top up to the card to prevent any further complications. Even though it has caused unnecessary inconvenience to many users, cashback and benefits were still working fine. It shows that CDC did not leave users in the lurch which is very respectable. 

CDC has successfully migrated its card issuer from Wirecard to PayrNet. With this successful migration, new users will now be able to sign up for a card when they stake at least 1000 CRO coins for 6 months. However, for the time being, there are some limitations which include only purchasing goods and services from merchants registered as a Singapore entity. This means that subscription for Spotify or Netflix will be affected until further notice.

Users will have to temporarily change the card to pay for those subscriptions. However, for existing users, CDC will continue to reimburse cardholders for active subscriptions that were being paid for with MCO Visa Card prior to 7 October 2020. Reimbursement will continue to be paid in CRO Tokens, to the CRO wallet in the App. Cardholders can expect to be reimbursed on or about the same day reimbursement was made the previous month. Reimbursement will begin on 19 October 2020. 

CDC is working with the new card issuer on resolving the outstanding issues. Judging from the fact that it only took 2 weeks to resume credit/debit top up after it got suspended on 2 October. I believe that it will not take long for these issues to be resolved. 

In addition, this will be the final month to receive US$25 when you apply for this card after you have successfully bought and staked 2500 CRO coins (valued at about $300). If you are getting the ruby steel card, the cost of getting it after referral bonus is $285. The card will be free after paying for a Spotify subscription for 19 months. 

Do not miss this chance to apply for this card as the referral bonus will be reduced to US$25 from 1 November 2020. Do contact me if you are interested in this card or have any doubts or enquiries.

#5 Use Cashback app for purchases

Besides using a debit card that offers high cashback, you can make your purchases through cashback apps such as ShopBack to earn extra cashback. ShopBack is indeed a godsend for many consumers as it offers a cashback rate ranging from 1% to 5% for major brands. In addition, you can withdraw those earned cashback to your bank account when it hits minimum $10. 

For example, when shopping for clothes at ASOS, I can shop through ShopBack and earn up to 6% cashback. As I am paying through my preferred debit card, I can earn extra 2% from using the card to pay. This means I will receive up to 8% discount off items if I use this method. 

ShopBack GO allows users to earn cashback and rewards when they spend at physical places like restaurants, retail stores and more. Users will just need to add their debit or credit card on the ShopBack app and pay using the card when transacting with a ShopBack merchant. I was surprised that I received a 3% cashback on ShopBack for dining at a gourmet burger restaurant and I saved 5% from using ShopBack Go and my preferred debit card to pay. 

Every cent counts no matter how small the purchase is, using cashback card and apps can help to offset some of our purchases and this is what we want to achieve at the end of the day.

Closing Thoughts

I hope that this article inspires you enlistee that it is possible to save $10k by ORD even though we are paid a meagre allowance.

To save $10k, it is not about how much you are paid from serving the nation but how much you spend each month. You can earn a 2LT allowance but you indulge in an expensive lifestyle like smoking, drinking and still not able to achieve the goal. On the other hand, you can earn a CPL allowance but when you keep your expenses very low because you scrimp and be frugal, you definitely can hit the goal easily.

62.5% saving rate is the magic number that we need to achieve every month. To be honest, one can still lead a comfortable life spending the remaining of their allowance.

In the later part of the article, I shared about tips to speed up your saving goal. Cashback has become essential part of many savers out there as it helps to offset some costs from our purchase. Remember every cents count.

When I got older, I realised that it is not all about saving money, one has to strike a balance between spending and saving. I have started to treat myself even more often than before.

For those who are spending way too much then the target percentage, I think it is time to evaluate whether what expenses can be cut.

For those who are saving hard, good job. But remember don’t make your life miserable so that you can save $10k.

Saving should be fun and enjoyable.

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