4 money habits to build financial success in 2025

This post was created in partnership with POSB. All views and opinions expressed in this article are Beansprout’s objective and professional opinions.

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What happened?

As we get to the end of 2024, I’ve been thinking about my financial journey so far this year. 

After all, this was a year where we saw fair sizeable shifts to the personal finance landscape in Singapore.

I have been sharing frequently on Singapore T-bills, and it is hard not to notice that the yield on the 6-month Singapore T-bill has fallen from its highs of above 4% late last year. 

We also saw the announcement of the CPF Special Account (SA) closure for those aged 55 and above in January 2025, which prompted many of us to re-evaluate our retirement planning. 

In the meantime, I’ve been watching my spending more closely as living expenses continue to climb.

This made me think – what are some good financial habits to adopt to enable us to stay financially prepared? 

How I’m building good money habits 

To me, being financially prepared isn’t about mastering complex investments or planning every detail down to the last cent.

What I’ve found most helpful are simple, actionable steps that can improve financial wellness.

That’s why when I came across the POSB Money Habits, I felt it was an effective way to stay on track with my financial goals.

• Save: Save regularly, build up cash reserves for emergencies
• Protect: Protect against large medical bills and loss of income
• Grow: Invest over time and diversify
• Retire: Generate passive income flows 

#1 – Save: Building a Financial Cushion 

Let’s be honest—every solid financial plan begins with having sufficient savings. That’s why I believe Save is the cornerstone of the POSB Money Habits.

To make sure I am staying on track, I regularly ask myself: 

• Do I have at least 3-6 months of emergency cash?
• Do I save at least 10% of my take-home pay?
• Do I prioritise savings over spending every month?

Once I have put aside 3-6 months’ worth of emergency cash and am able to consistently save at least 10% of my take-home pay each month, I started looking for ways to optimise my savings. 

One of the first things I did was to make sure that I am getting a good interest rate for my savings. Hence, I keep my emergency fund in a high-interest savings accounts like Multiplier, which offers up to 4.1% p.a. interest. I’ll share more tips on how you can unlock higher interest rates on your Multiplier account later in this article.

Next, I tried to find a convenient way to view all my savings, which were parked in various places. 

Thankfully, I was able to do it with digibank, which allows me to consolidate all my money, including my cash savings, funds in government accounts like CPF, investments in my CDP account and even savings and insurance from outside of DBS or POSB in my digibank—for a one-stop view. 

I can set a savings target, and the Plan tab in digibank allows me to stress-test my financial health against rising costs, inflation, and unexpected situations. 

It also offers me custom tips to boost my finances after identifying gaps in my financial planning.

#2 – Protect: Protect against large medical bills and loss of income 

After saving, I learnt that it is equally important to protect myself and my loved ones through insurance. 

As an investment professional, I must admit it can be quite intimidating when I was first introduced to the various types of insurance plans available. 

However, by asking myself a few key questions, I had more assurance that I have the right insurance coverage to safeguard myself from unexpected life events that may erode my financial stability. 

• Do I have a suitable medical plan?
• Do I have enough critical illness coverage?
• Do I have sufficient death and total permanent disability (TPD) coverage?
• Am I spending too much on insurance protection?

Firstly, I prioritise having a medical plan that fits my healthcare needs, budget, and offers lifetime coverage. 

I also ensure my critical illness insurance covers at least four times my annual income to protect against significant health expenses. 

Additionally, I maintain death and TPD coverage of nine times my annual income to provide peace of mind for my family.

I keep my insurance spending within 15% of my take-home pay to strike the right balance between protection and other financial priorities. 

To begin checking if I have sufficient insurance protection, I can consolidate and view all my insurance policies by linking them to digibank. This gives me a comprehensive overview of policy details, funds, and projected future policy values in one place.

Next, I can receive automatic, personalised insurance recommendations tailored to my needs and those of my dependents. If I identify any coverage gaps, I can easily plug them and purchase additional policies directly through digibank.

By aligning my healthcare preferences, budget, and insurance coverage, I ensure I’m well-prepared to protect both my wealth and my future.

#3 – Grow: Invest over time and diversify

Another key focus for me is growing my wealth through investing to achieve retirement adequacy. 

Here are the key questions I ask myself to stay on track:

• Do I invest at least 10% of my take-home pay?
• Do I invest at least 50% of my net worth?

I make it a priority to invest at least 10% of my take-home pay every month, ensuring my money is working for me. This habit not only grows my retirement nest egg but also reinforces the discipline of consistently setting aside funds for the future.

To optimise returns while managing risks, I aim to have at least 50% of my net worth invested across multiple asset classes.

Since I have a fairly long time horizon to my planned retirement, I focus on stocks, ETFs and bonds to seek higher potential returns and build my retirement income.

This is where an investment platform with numerous investment options available, such as Plan on digibank, allows me the flexibility to diversify my portfolio. 

If I prefer a hands-off approach, digiPortfolio offers a variety of ready-made portfolios to suit my needs. 

To help me invest regularly, POSB Invest-Saver provides an easy way to build wealth through ETFs or unit trusts via a regular savings plan.

For a more active strategy, I can select individual stocks through the DBS Vickers platform. With access to fractional shares trading in the US market, I can also own a share of the world’s largest companies such as Nvidia and Tesla for as little as US$5.

Alternatively, if I want to grow my portfolio with stable returns, SavvyEndowment 19 offers peace of mind, especially in a declining interest rate environment.

The good news is that when I make an investment or insurance purchase through DBS and POSB, it can help me earn a higher interest rate on my Multiplier account too.

This strategic approach helps me steadily build wealth, providing a financial buffer for retirement while offsetting the impact of inflation and declining yields from safer investments.

#4 – Retire: Planning for a Comfortable Future

I often emphasise the importance of asking ourselves what we’re truly building our financial plan for.

To me, it is to gain financial freedom and ensure I have a comfortable retirement. While retirement may seem distant for now, we can start planning for it by answering the following:

• How much do I need for basic expenses in retirement?
• How much do I need for lifestyle expenses in retirement?
• Have I met the current CPF Full Retirement Sum (FRS)?
• How many passive income streams do I have?

I first determine the amount needed to cover my basic expenses and lifestyle costs. 

Meeting the CPF Full Retirement Sum (FRS) is key for me, as it ensures a basic monthly payout for life. To enhance my financial flexibility, I plan to supplement CPF LIFE with other investments.

I also strive to build multiple passive income streams, giving me more freedom and security in retirement.

One way to build passive income streams is by investing through the ready-made portfolios on digiPortfolio.

For a more conservative option, I can start with the SaveUp Portfolio, which focuses on fixed income funds and is designed to generate higher potential returns than regular cash deposit rates.

If I decide to invest in familiar sectors like REITs, Asian equities, and bonds, the Income Portfolio offers a mix of equity and bond unit trusts and targets quarterly payouts of 4% p.a.

To simplify portfolio management over time, the Retirement digiPortfolio helps us to automatically adjust our investments based on our life stage. It focuses on growth assets like equities during wealth accumulation years and gradually shifts toward stable fixed income funds to ensure a smoother transition into retirement.

What would Beansprout do? 

Improving my financial wellness has been a top priority this year, and it will remain so in the coming year. 

I’m starting this journey by assessing my financial fitness with the POSB Money Habits Tracker, which only takes a few minutes to complete.

Next, I’ll look for ways to integrate POSB’s Money Habits—Save, Protect, Grow, and Retire—to strengthen my financial foundation and stay on track for a comfortable retirement.

The good news is that with digibank’s financial planning tools and support from DBS/POSB Wealth Planning Managers, managing your finances becomes much easier.

By combining these habits, tools, and expert advice, I hope you’ll also feel more prepared to manage your finances effectively—from your first paycheck to a secure retirement.

Learn more about the POSB Money Habits here.

Deposit Insurance Scheme

Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$100,000 in aggregate per depositor per Scheme member by law. Monies and deposits denominated in Singapore dollars under the CPF Investment Scheme and CPF Retirement Sum Scheme are aggregated and separately insured up to S$100,000 for each depositor per Scheme member. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.

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