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HOUSEHOLD FINANCE

HOUSEHOLD FINANCE

Lorna Tan Department of Finance

NUS Business School 1
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HOUSEHOLD FINANCE

OBJECTIVES
• Key aspects of holistic financial planning

• Empowered with tools & resources to

chart financial journey and achieve
financial objectives/financial freedom

• Assignments - Apply financial knowledge

Lorna Tan Department of Finance

NUS Business School 2
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HOUSEHOLD FINANCE TOPICS/SCHEDULE 2025
• Week 1 (17 Jan) - Personal Financial planning
• Week 2 (24 Jan) - Retirement planning & CPF (part 1)
• Week 3 (31 Jan) - Retirement planning & CPF (part 2)
• Week 4 (7 Feb) - Estate planning
• Week 5 (14 Feb) - Insurance planning
• Week 6 (21 Feb) - SA1: 2-240pm; SA2: 3-340pm) - Test 1
• Week 7 (7 Mar) - Investment planning
• Week 8 (14 Mar) - Credit management
• Week 9 (21 Mar) - Consumer protection/Class Presentations
• Week 10 (28 Mar) – Class Presentations
• Week 11 (4 Apr) – Class Presentations
• Week 12 (11 Apr) – SA1: 2-240pm; SA2: 3-340pm) - Test 2
• Week 13 (18 Apr) – Good Friday – no Lorna Tan Department of Finance
class NUS Business School
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HOUSEHOLD FINANCE

Final Grades

Your class grade will be calculated based

on the following weights:

• Class participation: 10%

• 2 Term tests: 30% each
(30 MCQs; no cheat sheet)
• Group assignment/project: 30%

Lorna Tan Department of Finance

NUS Business School 4
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Email: [email protected] and [email protected]

Plse use BOTH emails.

Lorna Tan Department of Finance

NUS Business School 5
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Recommended Readings & Resources
eg DBS Financial Planning, moneysense, dollarsandsense, seedly, etc

Grab a copy at good Available at all good

bookstores and bookstores and
stbooks.sg www.stpressbooks.sg

Lorna Tan Department of Finance

6
NUS Business School
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Personal
Financial
Planning

Lorna Tan Department of Finance

NUS Business School 7
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Money $$$$$$$$$
• What comes to mind?
• Is money sense common?
• Psychology of money/money attitudes/habits
• Issues relating to money/finance?
seams

ponline gambling
D Buy now
pay later
D
Crypto Crisis

& Inflation .

Lorna Tan Department of Finance

NUS Business School 8
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Personal Financial Planning

• Whose responsibility?

• When does it start?

• When does it end?

Lorna Tan Department of Finance

NUS Business School 9
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Benefits of Financial Planning

• Emphasises a structured approach to managing money
• Manage our expectations
• Balance spending and saving
• Use credit wisely
• Make prudent investment choices
• Manage financial risks
• Achieve financial freedom
• More confidence, peace of mind, enhance well-being
Lorna Tan Department of Finance
NUS Business School 10
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What is Financial Literacy

Ability (skills,
knowledge &
confidence)
Financial
Literacy
to make
informed KNOWLEDGE
decisions
and take
effective ACTION
actions

in managing
their finances
Lorna Tan Department of Finance
NUS Business School 11
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Financial independence

Financial Freedom

YOLO vs FIRE ?
A I
you only live
Financial independence
once Retire Early :)
squander money start
early investing
Enjoy life
Might miss on some live
momments.
PBS Took it as
financial independence
retire
early

Lorna Tan Department of Finance

NUS Business School 12
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Learning about Financial Planning

1) Acquire knowledge
• Avoid fallacies, mis-selling, misguided thinking or practices
• Make informed decisions based on understanding of
a) Laws and regulations eg CPF, taxation, housing
b) Characteristics of investment products
c) Financial trade-offs
eg present versus future consumption, risk versus returns
d) Proper use of financial planning tools

2) Be aware of behavioural biases

Lorna Tan Department of Finance
NUS Business School 13
 Buyers's sellers : Engage in transactions , exchange fin asset.
facilitate buying and
FIN3719 financial intermediaries who

>
Brokers Act as
:
selling
.
HOUSEHOLD FINANCE Dealers : Act as principals in transactions, buying and selling
securities for their own alc.
Exchangers :
where securities/commodities/derivatives are

Markets and Institutions clearing houses

traded .

: Trades are settled.

by
Mitigate counterparty
the performance of
risk

guarenteeing
transactions .

• What are the entities? What do they do?

and supervises financial
Regulates
institutions and implements monetary
• Role of MAS? policy-promote a sound financial
sector and sustainable economic growth. collect , use 3 disclose into

↓ relevant to the assessment

• What does Credit Bureau Singapore do? of the credit worthiness from
banks and other financial
their
Affordable 3Alternative institutions which are

- dispute -> encourage and members .

• What is role of FiDrec? assist in the resolution
of disputes bow consumers
TOASA/MACPEIS/CPFLi.
• How are the various CPF schemes?
financial
• Local banks: DBS OCBC UOB
manage Policy owner's
protection life fund?
• What is the role of SDIC?
- policy's owner's protection
general fund

• What is SGFinDex? A centrally managed online

consent system to enable individuals
fin
into
to access through applications
across different FIs .

Lorna Tan Department of Finance

NUS Business School 14
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SURVEY HIGHLIGHTS

Lorna Tan Department of Finance

NUS Business School 15
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What are Millennials worried about? (OCBC 2023 survey)

Lorna Tan Department of Finance

NUS Business School 16
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OCBC 2023 survey – Key findings

• Derailed desire to retire
More have started on their retirement
plans this year, but fewer people are on
track to achieve their goals.

 Figures indicate the change in percentage points from 2021

Lorna Tan Department of Finance
NUS Business School
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Retirement survey 2024 (Etiqa)

Lorna Tan Department of Finance

NUS Business School 18
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Retirement Survey 2024 (Etiqa)

Lorna Tan Department of Finance

NUS Business School 19
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Impact of High Inflation on Financial Wellness

Double whammy:

Ballooning expenses

Sluggish income growth

Lorna Tan Department of Finance

NUS Business School 20
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Impact of Inflation on financial wellness (DBS report-July 2023)

• Research paper “Between a rock and a hard place” is the 5th instalment in the DBS NAV
Financial Health Series that analysed aggregated and anonymised data insights from 1.2 million
DBS retail customers in May 2023 relative to May 2022
• Income is not keeping up with inflation for 40% of 1.2 m DBS retail customers; Their income
grew < than Spore’s average CPI inflation of 5.2% in 2022
• Expenses growth has outpaced that of income
• 3 key drivers of inflation are food, transportation, and housing and utilities, account for around
63% of overall CPI basket
• Gig workers, boomers, low- and middle-income earners find their cashflows getting tighter
and/or squeezed by higher debt payment like mortgages, due to higher interest rates
• Gig workers are the most financially stretched and their incomes were insufficient to cover their
spending

Lorna Tan Department of Finance

NUS Business School 21
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Impact of Inflation on financial wellness

Inflation-proofing tips ????

Lorna Tan Department of Finance

NUS Business School 22
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Impact of Inflation on financial wellness

Inflation-proofing tips:

1. Reduce discretionary spend

2. Shop wisely
3. Save smartly
4. Invest
5. Stress-test your finances
6. Insurance

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NUS Business School 23
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Reality
What is the average life
expectancy of Singaporeans?
A.77
B.81
C.85
D.None of the above

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NUS Business School 24
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Reality

Source: Blackrock Global Impulse Survey 2017

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NUS Business School 25
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Reality

• Life expectancy at birth 84.8

• Males 83

• Females 88

Source: Dept of Statistics

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NUS Business School 26
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Reality

Q. How many Singapore residents are at

least 100 years old?
1500
* G will become a superaged society , more than one in 5
are aged 65 and above
than guys .
- women live longer spay a higher premium

Lorna Tan Department of Finance

NUS Business School 27
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Why does it matter?

• Average age that parents started to plan for retirement: 36

• Expected retirement age: 63

• 67% expect to outlive their savings

• Only 6% confident of maintaining lifestyle

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NUS Business School 28
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Q. To retire for the next 20 years and live on $36,000 annually,

you need $xx ?? Assume no inflation and money not invested.
36000x20 = 720000

Answer: ? $720
00
Ans :

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-income
What is the most important financial asset?
Slow Down
Retire / Children’s Education

Nest Egg
INCOME

Current
Assets

Now 65 85

Income – Expenses = Surplus or deficit?

Increase Income and Reduce expenses
Have a budget

Lorna Tan Department of Finance

9-Jan-25 NUS Business School 32
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What can cause your plan to fail?

Insufficient returns

Future Asset
$1.17M
Current Income
Assets

10 Prime Years 55/60 30 Golden Years 85

Lorna Tan Department of Finance

9-Jan-25 NUS Business School 33
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When our life journey ends…..

What is your Exit Plan?

• Leave a legacy, don’t leave a mess

• Make sure our loved ones have enough

• Make sure it goes to the intended beneficiaries

Lorna Tan Department of Finance

9-Jan-25 NUS Business School 34
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Financial Concepts
• Time Value of Money

• Value of Compounding

• Risk & Returns

• Dollar cost averaging (DCA)

• Rule of 72

• Sequence of Returns (SOR) risk

• Passive income

• Behavioural Biases Lorna Tan Department of Finance

NUS Business School 35
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Time value of Money – Example 1

Suppose you are 60, have a retirement fund of $500,000, and have retired.
Your monthly spending is $3,500 after retirement.
Assume interest rate is 2% pa and zero inflation.
How many years does it take to drain your retirement fund?
Answer:
PV = , PMT = ,i=
N= months ( ≈ years)
By then you will only be years old!

Lorna Tan Department of Finance

NUS Business School 36
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Calculation:
PV = 500000
PMT = -3500
i=2 > -
ment and
N = ? mths paypounding edit a

(use Begin mode)

Answer:
-

162 98 months
.
3 Age
163 months
73 .

74 ,
(13 .
6 years
when funds are drained
.

Lorna Tan Department of Finance

NUS Business School 37
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Time value of Money – Example 2

• With inflation, the fund will run out even faster
• Assume: Retirement at 60 with $500,000; monthly spend of $3,500;
Inflation 3%; interest rate 1%

Lorna Tan Department of Finance

NUS Business School 38
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Calculation:
PV = 500000
PMT = -3500
% Ginterest
inflation
i = -2
rate -

>
-

N = ? mths
(use Begin mode)

Answer:
128 23 months -
.
Fage 70-71 when funds are drained .

Lorna Tan Department of Finance

NUS Business School 39
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Time value of Money – Example 3

Retirement at 60 with $500,000; Monthly spending: $3,500;
How to make your money harder
What is the optimal interest rate to sustain your lifestyle for the next 25 years?

Lorna Tan Department of Finance

NUS Business School 40
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Calculation:
PV = 500000
PMT = -3500
N = 300 mths
i=?
(use Begin mode)
7%
-
Answer: 58x12 = 6 .

96 %
0
.

Lorna Tan Department of Finance

NUS Business School 41
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Value of compounding $43,219

Compound interest:
$26,532
Interest calculated on the initial principal, which
also includes all of the accumulated interest of
previous periods of a deposit or loan. $16,288

Simple interest: $10,000

Compounded Interest
Interest calculated only on the principal amount

2020 2030 2040 2050

The “Interest On Interest” approach Assuming an interest rate of 5%, an investment of

of compound interest enables $10,000 would accrue over $30,000 in compounded
investments to grow faster over time. interest over 30 years .

Lorna Tan Department of Finance

NUS Business School
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HOUSEHOLD FINANCE

Value of Compounding (example)

• The earlier you start, the harder your money can work for you
40X12
N =

• Even the difference of just 10 years can be significant &

=
R

• Let’s assume you are age 25 and invest S$500 in an investment

that earns 8%, and can top-up S$50 a month. 1$186 , 687 08)
.

• At age 65, the investment would have grown to about S$ ?. 5) 186700

• If you wait until you’re 35, however, and do the same thing,
you’ll have less than half as much at age 65, or about S$ ?. $80 000 ,

($79 , 985 84) .

Lorna Tan Department of Finance

NUS Business School 43
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Risk and Return

• Investment products – risk-reward spectrum
(r/p between the return gained on an investment and the amt of risk
undertaken)

• Risk profile

• Average preferred investment period

• Minimum level of desired return for investments

Lorna Tan Department of Finance

NUS Business School 44
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Dollar Cost Averaging (DCA)

• Investment strategy where you invest a fixed amount every
month over a long period of time
• Investing a fixed amount into a particular stock, unit trust or
mutual fund over time at periodic intervals
• As such, you will buy more units of the shares or unit trust when
the price comes down and fewer units when the price is higher
• Low-cost strategy that avoids the pitfalls of timing the market
• Eg: DBS Invest-Saver (min S$100/mth)

Lorna Tan Department of Finance

NUS Business School 45
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Rule of 72
• Determines how long an investment will take to double, given a
fixed annual rate of interest.

• Divide 72 by the annual rate of return to get a rough estimate of

how many years it will take for the initial investment to double.

Lorna Tan Department of Finance

NUS Business School 46
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Rule of 72
Q: What is the number of years for $100 to double if it is invested
at 10% return?

70 %
Answer: 7 5
.

Q: An initial investment of $250,000 will grow to $1 million in x

years’ time if invested at 12% return? X2

Answer: 12 years .

Lorna Tan Department of Finance

NUS Business School 47
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Messentiallynegative downa
nextslide

Sequence of Returns (SOR) Risk

• During retirement, you need to sell investments periodically to support
your cash flow needs

• If the negative returns occur first, you end up selling some holdings, and
so you reduce the shares you own that are available to participate in the
later-occurring positive returns

• If a high proportion of negative returns occur in the beginning years of

your retirement, it will have a lasting negative effect and reduce the
amount of income you can withdraw over your lifetime

Lorna Tan Department of Finance

NUS Business School 48
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Sequence of Returns (SOR) Risk
* To mitigate :

Buy T bills .

withdraw 5 % Diversify
&
-

X withdraw/d withdrawal amount

↓
Bad ↓
mkt Good Lorna Tan Department of Finance
first mkt
first NUS Business School 49
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Passive Income
As Congrety
• Egs: CPF LIFE, annuities, insurance payouts, rental monies, dividends,
bond coupon payouts etc
nee
yellow
gives
-
a
we
• How sustainable are they?

• When do you start building these sources?

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NUS Business School 50
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Behavioural Biases
• Loss Aversion - prefer avoiding losses to acquiring equivalent gains eg it is better to not
lose $5 than to find $5
• Overconfidence - person's subjective confidence in his judgements is greater than the
objective accuracy of those judgements
• Home bias - tendency to invest bulk of portfolio in domestic equities
• Herding - propensity to follow the crowd without taking into consideration their own
judgement
• Anchoring – tendency to rely too heavily on an initial piece of information to make
subsequent judgements eg the initial price offered for a used car sets the standard for the
rest of the negotiations, so that prices < the initial price may seem more reasonable even
if they are still higher than what the car is really worth

Lorna Tan Department of Finance

NUS Business School 51
 Ourcost
She
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Lorna Tan Department of Finance

NUS Business School 52
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Behavioural Biases
• Free lunch?
- Free insurance for one year (auto renewal) - >onlyforfirsa
- Promotional interest rate for fresh fund in FD
- Two years' promotional interest rate for mortgage loan
- Annual fee waiver for the first year of a credit card
- Super attractive returns with no track record might>
- risky be .

Lorna Tan Department of Finance

NUS Business School 53
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Financial Planning

through Life Stages

Lorna Tan Department of Finance

NUS Business School 54
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Just starting out

(Age 20 to 30)

Graduating from school

and joining the workforce

C
Experiencing the freedom of
having your first credit card

Enjoying the financial benefits

that come with your pay cheque

Lorna Tan Department of Finance

NUS Business School 55
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HOUSEHOLD FINANCE What to do

Start Saving Protect & Invest Your Savings Explore Investment Products
• Start tracking your expenses • Upgrade your financial literacy • Map your short and long-term
and savings and set up a financial plan goals
• Pay yourself first each month • Ensure adequate insurance eg • Understand the basics of
• Ensure you have 3-6 months hospitalisation, critical illness. investing (risk appetite, available
of emergency cash before Personal accident, etc products and potential pitfalls)
investing (or 12 months, if you • Consider investing some of your
have dependants or are in the savings on a regular basis to
gig economy) benefit from the power of
compounding

Lorna Tan Department of Finance

NUS Business School 56
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Building up
(Age 30 to 45)

Advancing in your career and

starting a family

Going through a financially

challenging period (especially for
those in the sandwich generation
caring for both children and
ageing parents

Lorna Tan Department of Finance

NUS Business School 57
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HOUSEHOLD FINANCE What to do

Review Insurance Coverage Set up an Estate Plan Continue Saving & Investing
• Be adequately insured so the
family can carry on with their • Tools: Will, CPF Nomination, • Continue to save and invest,
lifestyle even if you are no Lasting Power of Attorney, Trust, especially when you have
longer around etc pay increments and bonuses
• Ensure coverage for
hospitalisation, critical illness,
home loan, car, kids’ edn etc

Lorna Tan Department of Finance

NUS Business School 58
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Consolidating
(Age 45 to 60)
Planning for your ideal
retirement lifestyle

Managing financial obligations

(children’s education, home
mortgages, caring for parents)

Enjoying more financial flexibility

than in early life stage

Managing new financial concerns

(retirement, passive income sources for
the future, children’s education, estate
planning)
Lorna Tan Department of Finance
NUS Business School 59
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HOUSEHOLD FINANCE What to do

Accumulate Wealth Preserve Wealth Continue To Invest Manage Risks

• Accumulate wealth while • Be aware of growing • Invest with excess cash • Manage insurance to
time is on your side to wealth preservation if available ensure adequate
invest or allow for needs as you age • Be aware of high coverage
compounding investment costs and (hospitalisation, critical
• Avoid being victims of illness, home loan, etc)
• Optimise CPF savings first financial scams reduced risk tolerance
via top-ups, etc • Review estate planning
needs

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Winding Down
(Age 60 to 70)

Looking forward to smelling the

roses and more relaxation

Stepping down a notch if you

are still working

Managing health issues which

might surface, adding to your
list of concerns

Lorna Tan Department of Finance

NUS Business School 61
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HOUSEHOLD FINANCE What to do

Plan For The Future Keep Track of Investments Maintain An Active Lifestyle
• Monitor your nest egg and • Pay extra attention to • Engage in activities that
passive income sources to investments as it will be an mentally stimulate you
ensure that they are sufficient uphill task recouping
for your retirement & estate financial losses with age • Set up an exercise routine
plans and continue to watch what
• Reduce equity exposure as you eat
• Consider rejoining the you get older
workforce full-or part time if
they are inadequate
• Reduce outstanding debts

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Golden Years
(Age 70 and above)
Enjoying leisurely pursuits like travelling,
building new bonds with the
community or other social/purpose-
filled activities

Managing new concerns over health

and adequacy of financial resources for
the years ahead (especially with rising
life expectancies)

Lorna Tan Department of Finance

NUS Business School 63
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HOUSEHOLD FINANCE What to do

Manage Income & Spending Tap Into Existing Resources Choose Low Risk Investments

• Be prepared to spend more • Take advantage of benefit • Consider lower-risk

while you are physically able schemes like the Pioneer investments that generate a
(e.g. for travelling, giving treats and Merdeka Generation regular income and are easy
to grandchildren, etc) packages to liquidate (e.g the
• Understand and track your • Consider monetizing your Singapore Savings Bonds)
savings, investments and home and/or downsizing if • Avoid being a victim of
passive income flows your children have moved financial scams
• Fine-tune your estate plan out

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64
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HOUSEHOLD FINANCE Ascertain
Getting Started financial situation

Define
financial goals

Financial
Review and revise
plans or goals Planning
Process

Develop
financial plans

Implement
plans
Lorna Tan Department of Finance
6
NUS Business School 5
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STEP 1

Ascertain your financial situation

Personal financial statement

• Balance sheet
• Income and expenditure statement

Personal financial ratios

Budgeting

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NUS Business School 66
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Personal Balance Sheet
Balance sheet of Mr. Lim as at 31 December 2021
Assets ($) Liabilities and net worth ($)
Liquid assets Current liabilities
Cash 3,000 Credit card balance 2,000
Savings deposits 21,000 Utility bills 200
Investments Insurance Premium 2,000
Fixed deposits 20,000 Tax payable 1,000
CPF balance 24,000 Long-term liabilities
Bonds 20,000 Housing loan 188,000
Stocks 33,000 Car loan 48,000
Real properties Total liabilities 241,200
HDB flat 360,000
Personal properties
Car 69,000 Net worth 358,800
Club membership 33,000
Jewellery 8,000 Assets – Liabilities = Net Worth
Furniture/appliances 9,000
Total assets 600,000 Total liabilities and net worth 600,000

Lorna Tan Department of Finance

NUS Business School
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HOUSEHOLD FINANCE
Who is truly wealthy? 3lookat Y Julie

Debt
$0.2 m

Debt
Net Net $1.8 m
Asset Worth Asset Worth Asset
$2 m $2 m $2 m $1.8 m $2 m

Net Net
Asset
Worth Worth
$0.2 m
$0.2 m $0.2 m

Jolie Jessie Peter David

Lorna Tan Department of Finance

NUS Business School
FIN3719
HOUSEHOLD FINANCE Income and Expenditure Statement
Mr. Lim's Income and Expenditure Statement for 2021
Income ($) Expenditures ($)
Salary 50,000 Housing
Bonuses 5,000 Housing Loan (cash portion) 6,996
Interest 600 Conservation charge 500
Gross income 55,600 Utilities 2,000
Less CPF contributions (11,000) Transport
Take home income 44,600 Car loan 10,800
Petrol 2,500
Maintenance 500
Food
Marketing expenses 5,000
Dining Out 500
Medical 100
Recreation
Vacations 3,000
Country club membership 600
Taxes
Income Tax 3,000
Property Tax 1,000
Road Tax 1,400
Total Expenses 37,896
Savings = Take home income -
total expenses Savings (Cash surplus) 6,704
Lorna Tan Department of Finance
NUS Business School
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Personal
HOUSEHOLD FINANCE

Financial Ratios

Lorna Tan Department of Finance

7
NUS Business School 0
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HOUSEHOLD FINANCE
Liquidity Ratio

fixed bonds (notrily) /one month waiting time)

S FD/money must

Cash & Cash Equivalents (Liquid Assets)

Liquidity Ratio =
Monthly Expenses
13 to 6 months)

As a guide, you should hold basic emergency cash equivalent

to 3 - 6 months of liquid assets

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Savings Ratio

Savings
Savings Ratio =
Gross Income

A ratio of 10% or higher is recommended

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Total Debt Service Ratio

Total Debt Total Debt Payment

Service Ratio =
Total Gross Income

(55%)
debt ratio
0% 35% 45% nomeloan
Normal is 45 % 100%
&

Healthy Moderate Excessive

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73
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Non-Mortgage Debt Service Ratio

Total Non-Mortgage Total Non-Mortgage Debt Payment

Debt Service Ratio Total Gross Income

healthy
15
below

& Above go excessive

0% 15% 20% 100%

Healthy Moderate Excessive

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74
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Invested Asset To Net Worth Ratio

Net = Total Total Invested Asset Total Invested Assets

Worth Assets - Liabilities to Net Worth =
Ratio Net Worth

A ratio of at least 50% is healthy to make your money work harder

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Case Study 1

CONCLUSION
T xinvestingought
>
- Too much cashat
financial
>
- healthy
status

Basic Liquidity Savings Total Debt Non-Mortgage

Ratio Ratio Service Ratio Debt Service Ratio ??
24 mths 35% 30% 15%

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Case Study 2

CONCLUSION
> Debt
- level too high , and
income is likely too low
relative to deb+

- should & income , pay

off debt with highest
interest rate first

Basic Liquidity Savings Total Debt Non-Mortgage

Ratio Ratio Service Ratio Debt Service Ratio ??
30 mths 20% 50% 20%

Lorna Tan Department of Finance

NUS Business School 77
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HOUSEHOLD FINANCE
Budget to strengthen your financial position

Targeted Savings Break Down Expenses

Estimate Total Income (Pay yourself first) Estimate
(Fixed & variable expenses)
Expenses

Lorna Tan Department of Finance

NUS Business School 78
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HOUSEHOLD FINANCE
STEP 2

Define Financial Goals

GOAL SETTING CASE STUDY

Steven
25 years old
Monthly salary of $3,500

Be Specific Be Realistic
Financial Goals:
Annual Vacation: $10,000

Purchase condo: Further education fund: Debt Retirement:

$1m $30,000 Free $?
Set Target Dates Know Your Priorities
Age 30 Age 35 Age 55
Lorna Tan Department of Finance
NUS Business School 79
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HOUSEHOLD FINANCE
STEP 3

Develop Systematic Plans

can
go
ck
Y ounger
↓ you
hig

• Map your goals 50% 25% 25% 50% 25% 25%

on a timeline Stocks Cash Bonds Bonds Cash Stocks

• Create a plan House

using the time Set up
rainy day Down-
Withdrawal
needed
value of money fund payment

Start saving
& investing

Age Age Age Age Age

22-25 27 29 35
Lorna Tan 60Department of Finance
(Now) NUS Business School 80
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HOUSEHOLD FINANCE STEPS 4 & 5
Implement and Review Plans
Can I afford a car?

Should I repay my What happens if I

loans earlier? am retrenched?

How much and how many How much are my

years should my housing children’s education
loan be? costs?

How much to spend How much do i

on my wedding? need for retirement?

Keep track of financial ratios Track short and long-term goals regularly

Lorna Tan Department of Finance

NUS Business School 81
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HOUSEHOLD FINANCE

Components of Holistic Financial Planning

Credit
Management

Estate
Insurance
Planning

Holistic
Financial
Retirement
Plan Investment

Home

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NUS Business School 2
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HOUSEHOLD FINANCE

Digital Tools
Plan tab (digibanking) – consolidated view (SGFinDex)
Other banks, MoneySense

Fin Lit websites

DBS Financial Planning
MoneySense
Institute of Financial Literacy
dollarsandsense
Seedly
Lorna Tan Department of Finance
NUS Business School 83
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HOUSEHOLD FINANCE

Have a complete view

of your finances

SGFinDex • Enables consumers to consolidate Plan & Invest • Connects to SGFinDex so your
(Singapore different bank accounts and financial Digital financial financial information can be pulled
info from CPF, HDB, IRAS, CDP and and retirement onto NAV Planner (with consent)
Financial Data insurers into 1 platform for greater advisory tool
Exchange) financial clarity • Uses data to provide comprehensive
Launched in Dec insights on your finances
2020 • Information from banks include
account & FD balances, unit • Helps identify and close budgeting,
trusts/SRS/CPFIS holdings, and insurance, investment and
unsecured loan outstanding balances. retirement gaps by projecting cash
& investment flows and mapping
your future

Lorna Tan Department of Finance

NUS Business School
FIN3719

Plan tab
HOUSEHOLD FINANCE

(DBS digibanking)
Key indicators of financial wellness E.g. of holdings that can be
• Savings included in SGFinDex retrieval
• Protect • External Bank Holdings
• Government Accounts –
• Invest CPF,HDB, IRAS, CDP
• Retire (Map Your Money)
Key components to build a robust plan
• Budgeting & Cashflow
• Assets and Liabilities
• Actionable Insights (Ideas for you)

For a comprehensive view of your finances and

to build a robust plan log in to digibank online
and click Plan & Invest tab to access the tool.

Lorna Tan Department of Finance

NUS Business School
FIN3719
HOUSEHOLD FINANCE TOPICS/SCHEDULE 2025
• Week 1 (17 Jan) - Personal Financial planning
• Week 2 (24 Jan) - Retirement planning & CPF (part 1)
• Week 3 (31 Jan) - Retirement planning & CPF (part 2)
• Week 4 (7 Feb) - Estate planning
• Week 5 (14 Feb) - Insurance planning
• Week 6 (21 Feb) - SA1: 2-240pm; SA2: 3-340pm) - Test 1
• Week 7 (7 Mar) - Investment planning
• Week 8 (14 Mar) - Credit management
• Week 9 (21 Mar) - Consumer protection/Class Presentations
• Week 10 (28 Mar) – Class Presentations
• Week 11 (4 Apr) – Class Presentations
• Week 12 (11 Apr) – SA1: 2-240pm; SA2: 3-340pm) - Test 2
• Week 13 (18 Apr) – Good Friday – no Lorna Tan Department of Finance
class NUS Business School
FIN3719

Thank You
HOUSEHOLD FINANCE

Lorna Tan Department of Finance

NUS Business School 87