My financial baseline

Before I started deciding to grow wealth for my future, I had to protect my present first. Without protecting the present, you are exposing yourself to very high risk in case anything unfortunate happens. All of these burdens of being poor is lessen knowing that your present is protected. Especially so if you are taking a gamble on money that could be lost.

These are my baseline before I started thinking about growing wealth:

Getting covered with insurance

I had hospital insurance plan, but not a life plan. I knew at 25 years old, I wanted to be adequately protected. I was constantly having anxiety attacks because who is going to take care of my dad, mom or sister if I passed? However, it was only 2 years later that I earned enough to afford a whole life insurance. Next step, on my to-do list is getting a will.

Opening a high-yield bank account

I made the painful decision to close my POSB account that I had since I was young. It was costing me $2 every single month. At that time1, I did not have $500 to keep the minimum balance. This high-yield bank account is where I do all my transactions just to hit the highest percentage that I could hit. Every single percent matters if I’m poor.

Setting aside 6 months worth of take-home pay

The rule of thumb is 6 months worth of your expenses. However, I don’t want to risk it by saving that low. There are a lot of people in my family depending on my salary. Imagine if my sister needs a new laptop for school, boom! that’s like a chunk out of my savings gone. Or my grandmother decided to switch out the 3rd maid in a year! I wouldn’t have enough money to pay for the maid’s loan.

Getting a cashback credit card

Getting a credit card was not part of my baseline, however I thought it was important to (1) establish a good credit score, (2) stretch my money as much as I can. That is why I got a cashback credit card instead of a miles card. At that time, I just bought a house FOR my mother and was shouldering all the renovations and furniture cost. The cashback I got from my credit card was significant, it was as though I got a free fridge and a washing machine!

Establish a financial habit

I’m not disciplined in tracking where my money goes. However, I think it is important to do it for at least a month – to have a rough number on how you spend/save. It is especially useful when you’re relooking into your financial goals. Other habits that I have was to constantly update my financial obligation sheets, look at my bank statements often, paying my bills on time2, and much more. These habits further amplify my belief that every single dollar counts and my drive to get out of this poverty circle.

So yup! These are my financial baseline before I started investing. I hope whomever is reading this have at least some financial baseline before they start thinking about growing wealth.

  1. Which was just a few years ago []
  2. I always had late fees charged to me – the cost of procrastination []

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