6 Things To Consider When Building Up A Solid Financial Plan

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Everyone needs a solid personal finance plan. As long as you are working and earning an income, it is vital to know how to save up, invest, and manage your spending. As important a life skill this is, regretfully, it is not something that schools teach us how to do.

So, here are some essential things to consider when drawing up your personal finance roadmap. For more detailed advice on how to manage and grow your savings, there are also plenty of financial consultants you can approach for help.

1. Budgeting

Step one of any financial plan is to draw up a budget. Your budget will determine how much you can spend, save, and invest each month. If you’d like, you can even go into further details, like how much you will allow yourself to spend on food, personal luxuries, and so on. Having a budget helps you keep track of where your salary is going, rather than leaving it to chance and then realising only too late that you have overspent.

2. Emergency fund

When it comes to budgeting your earnings, it’s important not to overlook setting aside an emergency fund. This is a buffer amount that is used for urgent and unexpected spending purposes, such as medical bills after an accident, or to recover lost or stolen property. Some people also sign up for insurance plans to help with covering such unexpected costs like illness, damage due to disasters, and so on.

3. Set goals

What’s the point of setting a budget if you don’t have a goal? Having a goal to work towards will help you determine how much you should save and invest. Your goals can be motivated by upcoming life milestones – for example, saving up for a wedding, home, or car. In the long-term, you should also have a goal for your retirement plan, taking into account the age you would like to retire, and the amount you wish to have by then. With your goals in sight, you will also feel more motivated to adhere to your plans.

4. Watch your credit score

Your credit score is affected by your credit card use, loan payment history, and the like. Making payments on time will favour your credit score, while defaulting on payments will be detrimental to your score. Your credit score is used by banks and other financial institutions like licensed moneylenders to approve loans, and set interest rates on these loans. That is why being aware of how to maintain a good credit score is so crucial.

5. Regular savings plan

A regular savings plan (RSP) or monthly investment plan is not actually a savings plan per se. Think of it as an automatic investment system, where a specific amount is used for investments each month. You can set the amount you wish to be invested each month, and the tool will help you decide how many units of the same asset to purchase. Using the dollar-cost-averaging principle, it will buy more units when the price is low, and fewer units when the price is high.

RSPs are brilliant starting points for those new to investing, as it is low-risk, flexible, and low-maintenance.

6. Manage your debts

Many of us enter the workforce already laden with debts – education loans are one of them! From housing loans to car loans, having some form of debts to pay off is quite normal. However, what matters is how you manage your debts. Allowing debts to hinder your savings plan is not ideal, but defaulting on your payments is not a good idea either.

If you have multiple credit card debts or have taken out instant cash loans as well, you will need to plan properly in order to clear your debts in time. In some cases where a large amount of debt is owed to multiple creditors, you can approach an approved debt consolidation company in Singapore for a consolidation loan.


Make personal finance planning a priority, and you can enjoy better stability in your life. Know when you should engage the help of a licensed moneylender, and where to implement prudent saving habits. For any urgent cash needs, or low-interest loans to pay off your other debts, Goldstar Credit will be your go-to moneylender in Singapore.


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