Saving with ease: 3 steps to getting started
Having a proper savings plan may not be all that hard for parents of young children. Proper planning combined with the right products for your needs can make all the difference for your future plans.
One of my earliest memories as a child was having a small coin box in the shape of a unicorn.
Every day, I’d look forward to my dad coming home from work and giving me his loose change to fill it up. The moment the coin box was full, I’d be allowed to empty it and spend the coins on a treat of my choice, be it an ice-cream cone, a new story book, or a toy.
Moving into the next phase of life as a young working adult with more spending power (and not that much responsibilities yet), the concept remained the same; although the small indulgences turned into larger ones like a year-end holiday and swanky new gadgets.
I thought that I had done enough by saving a portion of my income each month, but the fact was that, I was not paying enough attention to necessary long term expenses. Reality only started to creep in when faced with big-ticket purchases like a house and wedding expenses – and that’s when I wished my little unicorn coin box could have lasted me all the way until adulthood.
If you are still at the young adult stage or just starting life as a young married couple, I’m sorry to tell you that money matters will only get more complicated in the future. Once the kids arrive, it will seem as if our bank accounts have a leak that just cannot be plugged in!
Don’t get me wrong; while I’m pretty sure that every parent would agree that children can fill us with joy and other unquantifiable emotions, they are the opposite of money-makers. But all is not lost. If anything, the earlier chapter in my financial logbook has taught me that savings, whether short, mid or long term, should be made a priority from the start.
Expenses like the children’s tertiary education or our own retirement should be planned as early as possible to reduce the financial strain of rushing to save only when you need it.
However, with so many confusing financial products out there, and with even more things on our minds, it’s no wonder that we, parents, prefer not to think too much about it and just let the spare cash in the bank count as our ‘savings’.
But the truth is, if smart financial decisions aren’t made, inflation can cause the value of our hard earned money to disappear into thin air.
Don’t despair mums and dads, there are simpler ways to make the money work in our favour. Here are 3 simple steps to getting started:
1) Think about your goals and future needs.
Rather than just setting aside money for an arbitrary rainy day, set clear goals.
Think about important life events that would require a huge sum of money like retirement and your child’s tertiary education, but also be sure to set aside money for things that excite you, like travelling in your silver years.
As far away as that seems, it’s definitely necessary, if not good to have, sooner rather than later.
2) Locate a good plan that won’t tie you down.
There are plenty of savings plans in the market, but don’t get too overwhelmed by all that jargon and financial terms.
Zero in on one that is easy to grasp and that serves your needs. For example Etiqa, the insurance arm of Maybank, has a range of products that are simple to understand – some can even be purchased directly from their website!
Product features are clearly explained with simple language and illustrations of how their plans can meet your needs. Their brochures and product contracts are also available for those who want more details.
3) Commit to the plan until you reach your goal but be sure that your money is there when you need it.
As a parent myself, I understand the concern of locking up spare cash, thinking that it will be a hassle to take it out when you really need it.
Selected Etiqa products like eSAVE flexi (5pay10) presto or the eSAVE flexi that allow you to experience liquidity in the form of guaranteed cash payouts from the end of second year onwards, and will reward you with an attractive total return once you hold your plan to maturity. You are ensured that your capital is fully guaranteed upon maturity as well.
In addition, the eSAVE flexi also gives you the choice of protection in the form of several additional waivers like the eXTRA secure waiver ( which allows policy continuation without paying premiums if the insured is diagnosed with a critical illness) and the eXTRA accident cover (the insured will receive an extra cash payment if the insured suffers an injury or death due to an accident), which should make you heave a sigh of relief, because not only does the plan encourage you to commit to your goal, it protects your loved ones if unforeseen event was to happen.
Etiqa, the insurance arm of Maybank, has a wide variety of plans, one of which will definitely suit the needs of your family. They span from straightforward insurance plans like travel and motor insurance, to more sophisticated life protection, savings and retirement plans to meet your needs.
Some products are available online and do not require you to go for a medical check up to qualify, definitely one less worry for parents with already so many things on our minds and schedules!
In addition, with the range of savings plans that Etiqa offers, there's definitely no reason to procrastinate!
If you need added push to start contributing to a plan regularly, you might want to look into the eSAVE enhance. Apart from ensuring that inflation doesn't erode the value of your savings, there is an additional perk that comes in the form of a maturity benefit at the end of the policy term. You can opt for a flexible policy term of 10 to 25 years with the former or go for a shorter premium of 5 years and mature in 10 years with the latter.
If you are concerned about your ability to save as your kids grow older, the eSAVE assure presto might be the plan for you. You only contribute the premiums for 7 years but the plan continues for 12 years, allowing you to reap the rewards without contributing premiums for 5 years! At the end of year 12, you have the option of receiving the benefit either in a lump sum or in yearly payments of 10 or 15 years.
Read more about Etiqa's range of savings plans here.
Concerned about retirement instead?
If building your nest's eggs is another concern of yours, Etiqa also has an option for you. Their eFUTURE pay presto retirement plan, ensures that you have guaranteed monthly payouts for 10 years with your choice of retirement age at 55, 60, or 65, this in addition to a non-guaranteed lump sum benefit when your policy reaches maturity. You also have the flexibility of selecting your premium commitment period (either a 5 or 10 year premium term) based on your needs.
Enjoy the peace of mind that comes with saving early.
Parenthood comes with laughter, tears, a whole lot of responsibilities and the occasional headache. Doing your sums and planning your finances early is always the best choice as it gives you more options in the future.
Whether it is planning for your own silver age, or giving your children a head start in life, look for a plan that meets your needs and start as early as possible. Your child, and your future self will definitely thank you for it.