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  • William Seah

Can You Embark on Financial Planning Without Any Money?

Earlier this year, I was invited to Catholic Junior College to share with the students on financial planning. This was an interesting challenge: What can I share about financial planning with an audience that has no income, and likely, no interest in such a topic (mainly because they have no income)?

I gamely took on the challenge and proposed to the students that one can embark on financial planning without any income on hand. All they need to do is to master these 3 things: Cashflow (telling money where to go), Investment (telling money how to grow) and Insurance (protecting your money!)

  1. Start with Cashflow

Cashflow is something that everyone knows, needs to be managed. However, this is something we don’t spend enough time uncovering how to manage money well. We think that budgeting means “living within your means”, but it is far more than that. If you earn $10,000 a month and spend $9,999, are you living within your means? Conversely, if you earn $3,000 a month but spend $1,500, won’t we all agree that that is a much better situation?

Save before you spend. When your salary or allowance comes in, set aside money for fixed expenses (insurance, tithing, charity, parents etc.) and savings (set a target that is fair). Prioritise these two, before spending on other things. By doing so, you have prioritised saving, and as a result, you will naturally spend less. I would further propose separating a savings account from a spending account; the less you see in the bank the less you will be inclined to spend.

Of course, the ability to save comes with many caveats, including situational caveats. The individual earning $10,000 a month could be taking care of aged parents who have high medical costs. The individual earning $3,000 could be living rent-free, food-free, at his parents' place. Such situational issues change the outcome. But barring such outliers, most of us will agree that we should save. The issue is how, and how much.

I reminded the students that they too can start to budget, by managing their allowance. A budget can be designed to ensure that the money goes to the right places. Students may have fixed expenses (e.g. their handphone bills/ transportation fares) and may want to set aside money for saving. But just like adults, situations may differ and each should work out their own budget.

  1. Invest

The second focus should be on investment. That’s something that everyone loves, because it gives an idea of accumulating wealth, and is sometimes marketed as a get-rich scheme. But what sort of investment can students without income go into? In fact, can students even invest? After all, investment triggers the idea of setting money aside into an asset and letting it grow in value.

I state with a resounding YES that students can invest, and furthermore, this investment returns a high profit. Invest in yourself. Much has been spoken about investing and how to invest (in this blog). But less is spoken about investing in oneself. Students, and adults, should invest in themselves. Read. Attend courses. Upgrade yourself. Investment invariably means growth, and we need to decide what growth we would like to pursue. Not all investment requires money, but all types of investment require effort. The books that I read are all from the library, which gives me a wealth of selection, all at the low, low price of $0 (but a high, high price of time). From time to time, I find a book that is outstanding, and I buy the book, but the privilege of being a Singaporean is getting access to a treasure trove of information without paying the price. There are also free courses at the different community centres, and if you’d want something specific, I believe there will always be a course somewhere.

Invest in yourself; that is an asset class that is truly evergreen.

  1. Insure

Finally, insurance. How can someone without an income buy insurance? In an ideal world, parents would have bought insurance for their child. But even if parents had not bought insurance for the child, everyone can start an insurance plan i.e. we can ‘self-insure’.

By saving a pot of money marked out for event X, we have effectively insured ourselves against crisis. We have money to pull us through, and that puts us in the best position to succeed. The number one requirement of success is to survive. Black swans happen, and they can derail our lives. To be able to succeed, we need to survive. What can help us survive is sometimes just a pot of money.

Final Thoughts

How much should we set aside? Experts suggest between 3-6 months, but my personal advice is to consider your personal situation. If you are a sole breadwinner and happen to be self-employed, or in a very niche industry where jobs are hard to come by, perhaps setting aside more money is a wiser choice. Realistically, one year is probably the maximum. This way when a crisis hits and you need money for a rainy day, it is available.

These are the three areas that are important. Manage your money by setting out a budget. Invest in yourself. Save to self-insure. These are habits that even young children can start on.

I write on topics related to financial habits and decisions. Do explore my other articles at if the ideas intrigue you. Drop me an email at or text me at 9673 1523 if you’d like to chat over coffee or whisky.

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