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Half of your income should cover all your expenses, including essential needs like housing, transportation, and groceries, as well as non-essential wants such as dining out, entertainment, and shopping. This allocation ensures that your basic lifestyle is sustainable without overspending.
2. 30% for Investing and Wealth Building
The next 30% should go toward investing — a crucial step in growing your wealth over time. For individuals in Singapore, this typically means savings after CPF (Central Provident Fund) deductions. Whether it’s contributing to a retirement fund, stocks, or other investment avenues, this portion helps you build a financial cushion for the future.