Alfred and Emily* lived in a 3-room HDB flat in Clementi. It was the flat they moved into as soon as they got married. While they were happy in their Clementi flat, their plan had always been to upgrade to a private apartment within five years, after which they would start a family.

But they were keen to put down a good-sized deposit on any private apartment they bought so that their finances would not be strained by payments on any mortgage they took.

Both were in their late 20s when they married and reasonably established and experienced in their jobs. Alfred worked as a media executive while Emily was an officer in the compliance department of a local brokerage house.

With diligent financial planning and saving, Alfred and Emily managed to put down a 20% deposit on a $700,000 2-bedroom condominium unit in the Sunset Way area.

How did Alfred and Emily do it?

The most important aspect about Emily and Alfred's plan to buy a private apartment was that it was clear in their minds that they wanted to save enough money to pay a substantial deposit.

Thus, saving for their home dictated the rest of their actions over the five-year period before they had saved enough to put in a deposit.

While Emily and Alfred were disciplined about adhering to a strict household budget, they were certainly not misers. They spent when they had to, though this was usually followed by a frugal period during which both Emily and Alfred did simple things to save money like taking a lunch packet from home to work or getting up early enough to take a train to work rather than taking taxis.

They also didn’t take an overseas holiday for three of the five years, saving some extra money in the process. Neither did they own a car, which they saw as an unnecessary expense as this stage of their lives.

In addition, Alfred and Emily decided to set up a bank account linked to a mortgage to manage their home loan instalments. An example of such an account would be the Citibank Home Saver - a home loan that is linked to a checking account with an interest adjustment offset feature. The salaries they both put into this account, together with their careful spending habits, enabled Alfred and Emily to pay off their home loan faster.

Emily and Alfred found that it was easy to get used to a routine of careful spending when there is a long-term goal that they are both aiming for. It also helped that both Alfred and Emily were in steady jobs which had good career advancement and promotion prospects. Thus, both their salaries also steadily rose during the five-year period, which helped them achieve their goal of buying a private apartment.


* Names are fictitious