Many people would not bother to think about finances in their late teens and early 20s. Ironically, the earlier you start, the easier it will be for you. If nothing, you have time on your side.

But, thrilled with the prospect of throwing off the shackles of exams for the first time in more than a decade, most young adults would not be calm enough to contemplate what their financial goals in life would be, much less how to reach them.

“Let me enjoy life first! I still have my whole life ahead of me!” would be the likely motto.

It is never too early to start, though.

Form a habit of saving consistently and the power of compounding interest will give your nest egg a hefty boost years down the road.

Bone up on investing fundamentals and you will have plenty of time and space to recover even if you falter in the beginning.

We could go on, but maybe it will be even better hearing from your peers! We chatted recently with three of our friends from the Citi-SMU Financial Literacy Student Club, who have gone around schools to share their tips on personal finance and investing. Take it away, Mr Yeo Boon Peng, 29; Mr Muhammad Alif Mohammad Hafidz, 26; and Ms Reshma Ishwarya Dogiparthy, 19!

Tell us a little about yourselves and what got you interested in financial literacy so early?

Boon Peng: I just graduated from the Singapore Management University in 2019, at the age of 29, older compared with many others. It’s because I went through Normal (Academic Stream), then ITE.

Some of my friends my age are already earning attractive salaries, but I’m just starting out and I have very little savings now because I used almost all my salary in the first few months, to pay off my school loans as quickly as possible.

Reshma: I’m doing a double degree in business and accounting in SMU now. I do not come from a high-income family. So what I did was to just save. I did not know the concepts of separating needs and wants, or how I should be budgeting or saving.

I just thought the only way you could manage your finances was to save. And I did not know how to save; I just put my money into a piggy bank. It was quite bad, as I wasn’t allowing myself to spend, even for my needs, and it was a very bad way of saving because of time value of money.

I really wanted to get better, so I joined the Citi-SMU programme and have since learnt much more.

If you are able to make the change yourself and then tell others how they can do the same, they will be able to relate to you. Instead of giving them an article and say, ‘Oh, you can become a millionaire like this.’ It is very hard to relate to that.  I thought the programme catered to my needs as a student too.

“More income does not equate to more savings, it can also lead to more spending.

— Mr Muhammad Alif Mohammad Hafidz, 26

Alif: I’m a business student, majoring in finance and marketing. For me, the importance of financial literacy was obvious to me, as I came from an average family, where my parents did not really share about why saving regularly was important. In fact, sometimes they don’t even save because they have to buy certain things for my siblings and me, from time to time.

Bit by bit over the years, I realised that saving is important if you want to buy the things that you want, and to do the things that you want, such as going travelling and sightseeing.

I bought a laptop for $2,200 with my savings when I graduated from Secondary 4. At that point in time, it was a huge amount of money to me. It was also a sense of fulfilment.

In polytechnic, I started working part-time and I knew how painful and hard it is to earn money. I knew I needed to do something about my personal finances but I just didn’t know what.

What are some financial literacy pointers that you have personally found useful?

Reshma: I have always wanted to improve my financial situation, become financially independent and be able to live without having to constantly worry about my finances.

Initially, I thought just saving alone would help me achieve this. But eventually I realised that it is not just about saving or merely wishing for more money. If I have $1000 more, will I be happier, will I settle?

What really hit me was that wishing for more would never solve the problem. It is about being able to manage with what you have now – that would be the long-term solution. Stop wishing for more, but think about the maximum you can do with what you have now.

For example, I work part-time jobs, and if I work this many hours, I’ll get this much. If I work more, I’ll get more. If I want to get more money, I’ll just have to keep working longer.

The smarter thing to do is just to take the money I have now, and do something that gives me more in the future. It’s the smarter way of managing what you have to get more.

“You can have big plans, but ultimately, discipline is the single most important factor.

— Mr Yeo Boon Peng, 29

Alif: Many of my friends did not do a budget when they started working, so they ended up splurging on big-ticket items, they were not able to pay off their student loans, and they ended up in more debt. Some of them even took up credit lines to pay off their debts and things spiraled.

Money management is an important life skill. I think this is something that can be taught more in school.

Many people don’t realise that if they earn more, naturally their expenses will increase. When your purchasing power increases, there is a tendency for you to spend more.

More income does not equate to more savings, it can also lead to more spending.

Boon Peng: In the Citi-SMU programme, they encourage you to start investing or do something about your money instead of putting it in the bank.

If I ask them to invest but I do not invest, it does not make sense. So I walked the talk. The concept of starting early is a key point I always bring out to students.

In my first few months of work, I used almost all of my salary to pay off my study loan. I did this to avoid paying the interest. If you look at my $35,000 loan, compound at 5% per annum, it is a huge sum of money.

Because I graduated later, if my loan snowballs, it would affect my longer-term plans, such as marriage, buying a house, and so on.

Information is so freely available nowadays. What do you think is the reason youths cannot pick up financial literacy content themselves?

Reshma: The inertia is huge. We barely have time for ourselves as students. I would have loved to have known all the financial concepts but these just were not my priority back then.

It might also be that we do not know where to start. It’s just so daunting and you don’t want to take a wrong step. But the important point is to start, because once you do, you will see that it is actually okay, you try to make more time for it and get involved, and things will get easier.

Alif: If you were to go online and look for information, there is literally a lot, and you will not know what to read or learn, or where to start. There is a lot of noise. Guidance is important.

What are some things you wish your friends knew about financial literacy?

“The small changes matter the most. Try not to always compare with others.

— Ms Reshma Ishwarya Dogiparthy, 19

Reshma: Take the first step to make the most of your finances. The first step is always the hardest step, but once you get through that, it will be a lot easier. It’s ok to not know everything, you are always learning.

The small changes matter the most. You do not have to start investing thousands of dollars today. Maybe it could be like budgeting, you know, this month I could plan my finances to not exceed my expenditure.

And try not to always compare yourself to others, as everybody is different. It is about you, your circumstances, what is best for you, and not about how you compare with friends or others.

Alif: First thing would be budgeting. You need to know where your money is going or you won’t know how much you are spending, how much you could save, and stuff. And learn to differentiate between your needs and your wants.

To me, this is very important because most of the time people do not realise that what they are buying are their wants and not needs. I know of friends who buy bubble tea almost every single day. That’s spending unnecessarily.

It’s also important to set financial goal.

For example, I want to semi-retire by the age of 50 so I know, ‘I need to have this much savings, these investments, so this is something I have to work towards every single day’.

Only when you know where you are heading would you be able to take the necessary steps. And financial goals does not have to be big ticket items – saving for a trip overseas is also a financial goal.

Boon Peng: Everyone is different, and has different experiences, so I don’t really have a set of ‘correct’ ideas I can give to my friends. I have similar views as Alif. Ultimately, it boils down to discipline, and it is difficult to be disciplined.

For example, your friend asks you today, ‘Want to buy bubble tea?’ Rejecting is difficult. And if you were to reject your friend, what impression would you create?

When we start working and start getting salary, it’s hard to manage the situation because it is our first time seeing a huge paycheck, compared to getting allowance from your parents. If I do not know how to manage, then I will end up with no savings.

In fact, many of my friends have been spending quite excessively; they just spend on products, like big-ticket items, and end up with little or no savings, or even to the point of having credit card debt.

Of course, you can have big plans, but ultimately, discipline is the single most important factor.