YOUR GUIDE TO NAVIGATING LIFE AFTER GRADUATION
To us, The Next Stop has become more than just a final-year project. Our own secret fears, uncertainties, ideals and aspirations formed the heart and soul of this campaign. We asked ourselves what we would like to know as fresh graduates stepping into adulthood, and thus this survival guide was born. We hope this survival guide will give you a good idea about what to expect in life after graduation. Letâ€™s look forward to our next stop in life with confidence. Best Wishes, Long Teng, Shawn, Agnes, Vinnie The Next Stop is a social campaign aiming to help young adults navigate the quarter-life crisis and prepare for life after graduation by tackling pertinent finance and career-related issues. With each otherâ€™s support, we can become stronger and more resilient adults.
NAVIGATION 03 05 15 18 22
Introduction Finance Career Quarter-Life Conversations Acknowledgements
What is a quarter-life crisis? Is it a period of not knowing what is your purpose in life? Perhaps it is less of an existential crisis, but more of a transitional stage in life that we all go through. As we inch ever closer to the end of our schooling days, many uncertainties and questions cloud our minds. We become inundated with concerns about finances, building a career and pursuing our passions. Furthermore, in our economy today — with so many possible paths before us — we face a paradox of choice. Will we make the right decisions? Will we be fulfilled and happy in the future? How do we cope with a quarter-life crisis? Dr Jeffrey Arnett of Clark University has described us as ‘emerging adults’, a term that eloquently describes the transitional phase in life we are going through. Emerging into adulthood doesn’t have to be stressful. In fact, it’s the best time to explore and to understand yourself even better. It’s the best opportunity for you to find direction and set priorities that help you achieve a fulfilling life for years to come.
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ARE YOU MOVING TO A NEW STAGE IN LIFE? MOVING TO A NEW STAGE IN LIFE YES
DO YOU KNOW WHAT YOU WANT TO DO AFTER GRADUATION?
NO FINANCIAL STABILITY HAVE YOU BEEN THINKING ABOUT THE FOLLOWING ISSUES?
NO OR DON’T KNOW
SUPPORTING YOUR FAMILY BUILDING A CAREER PURSUING YOUR PASSION
FOR ANOTHER 5 YEARS?
ARE YOU CURRENTLY A STUDENT AT A TERTIARY INSTITUTION?
CAN YOU SEE YOURSELF DOING THAT FOR THE NEXT 5 YEARS?
ARE YOU IN YOUR FINAL YEAR OF TERTIARY EDUCATION?
NO OR DON’T KNOW
SHOULD YOU? THIS MAKES YOU AN
NOT YET BURDENED BY RESPONSIBILITIES OF ADULTHOOD
STUDENT APPROACHING GRADUATION
MORE INDEPENDENT, FOCUSED AND DRIVEN
EMERGING ADULTHOOD EMERGING ADULTHOOD INCLUDES A PHASE OF UNCERTAINTY SIMILAR TO WHAT WE FACE UPON GRADUATION
45% FEEL LOST ABOUT LIFE AFTER GRADUATION
EMERGING ADULTS IS A TERM COINED BY AMERICAN PROFESSOR DR JEFFREY ARNETT
50% HAVE DIFFICULTY MAKING CHOICES ABOUT LIFE AFTER GRADUATION
67% ARE ANXIOUS ABOUT LIFE AFTER GRADUATION
BASED ON A SURVEY OF 390 UNIVERSITY AND POLYTECHNIC STUDENTS
ARE YOU AN EMERGING ADULT?
70% ARE AFRAID OF MAKING THE WRONG CHOICES
Pursuing further education isn’t cheap and some of us may have obtained a tuition fee loan to finance our studies. Upon graduation, we will have to repay that loan — plus interest. So how do we handle that debt?
Upon graduation, you will receive an interest commencement letter, which gives you the following options: Repaying in Full Repaying your loan in full at once saves you the most money as no interest is incurred. Repaying Partially If you are not able to repay the loan in full, you can choose to repay partially. But the amount cannot be less than S$500. Repay by Monthly Instalments Alternatively, you can set up a basic monthly instalment plan to help repay your loan with a minimum amount of S$100 a month. You can take up to 20 years to repay the loan, but remember, interest accumulates!
DID YOU KNOW The interest for your loan is based on the prime rates of DBS, OCBC and UOB. The current rate is 4.75% per annum. Prime rates are revised every quarter. Interest, however, is accrued monthly and the commencement of interest rate calculation is determined by your university in most cases. Your parents may be using their CPF to pay for your studies instead of you getting a tuition fee loan. However, once you graduate you still have to repay your parents. And yes, this “loan” also carries its own interest rate!
ADVICE Plan ahead. Decide how many years you want to take to repay your loan and set aside an appropriate amount per month for repayment. Don’t put off your repayment! If you do not begin repayments in 2 years, you will be charged an additional 1% late fee.
CENTRAL PROVIDENT FUND
The CPF is a mandatory savings scheme for all Singaporeans. When you are employed, both you and your employer make monthly contributions to your CPF. There are 3 types of accounts in your CPF, and hereâ€™s a brief idea of what they can do for you:
You can use this account to buy a house and pay for further education or your own childrenâ€™s education in the future.
This account is meant to help you save up for old age, and you can use it to invest in retirement-related financial products.
This account can be used for hospitalisation expenses and approved medical insurance.
CONTRIBUTION BREAKDOWN Monthly Income
Based on the latest changes announced in Budget 2014, your employer contributes 17% of your monthly salary to your CPF, while you contribute 20%. 23%, 6% and 8% go into your Ordinary, Special and Medisave accounts respectively.
Employer: 17% O
How to read your CPF statement, MoneySENSE: http://bit.ly/1hF41p7
NOTE Not all medical expenses can be covered by Medisave. You cannot use Medisave for charges for medical reports, expenditure on equipment (e.g. wheelchairs) and ambulance fees. 7
Once you reach a certain level of income, you have to pay income tax. Singaporeâ€™s personal income tax rates are progressive, which means that the more you earn, the more you are taxed. If you are Singaporean or a permanent resident, you start being taxed when you earn a chargeable income of S$30,000 and above annually. Hereâ€™s a quick look at the current tax rates:
Chargeable Income (S$)
Gross Tax Payable (S$)
First 20,000 Next 10,000 Next 10,000 Next 40,000
None 2 3.5 7
None 200 200 + 350 550 + 2,800
Personal Income Tax Rates, Ministry of Finance: http://bit.ly/1fjo5M7
SO WHAT IS CHARGEABLE INCOME? Total Income
Reliefs and Rebates
Tax Deductions, Inland Revenue Authority of Singapore: http://bit.ly/1bWvH6Q
NOTE Tax filing is due April 15 of each year. IRAS will mail you the tax forms which you would have to file personally (or get someone to help you).
Credit cards are a form of borrowing that allows you to use money in advance. Any amount charged to your credit card is essentially how much you owe the issuing bank and any debt that is not paid within the stipulated grace period will incur interest.
If you are unable to pay off the debt within the grace period, payment of a minimum sum will suffice, but the outstanding balance will be subject to prevailing interest rates — and will continue to roll over if you do not pay them in full by the next payment date. The current rate imposed on outstanding credit card debt is 24% per annum. Interest Calculation, MoneySENSE: http://bit.ly/1laiwlf
DID YOU KNOW You need to have a minimum annual income of $30,000 to own a credit card. If you have one now, it is probably a micro-credit card or supplementary card with a monthly credit limit of $500.
ADVICE Pay cash. Don’t make purchases with credit cards unless you absolutely have to. Making a habit of paying by card only makes it easier for you to lose track of your expenses. Spend within your means. Make sure that you are able to pay your credit card bills in full by every payment date to avoid unnecessary interest charges and late payment fees. It’s not your money! Remember that your credit limit is not how much you can afford, but how much you can potentially owe the bank. If possible, consider getting a debit card instead. Credit Card Guide, Association of Banks in Singapore: http://bit.ly/1gZMq8x
Insurance offers you protection against circumstances that could cause you or your family members financial loss. When you sign up for an insurance policy, you make monthly payments (premiums) to the insurance company. If anything unprecedented occurs, the insurance company has to pay the amount agreed upon in your policy to cover some or all of your loss. The word ‘insurance’ often brings to mind pesky sales agents and confusing jargon, but fret not - here’s a quick look at the range of insurance policies that may be relevant to you:
Going for a graduation trip or just travelling in general?
Usually offered at a low cost by airlines and travel agencies, it’s worth getting travel insurance to protect yourself from lost baggages to accidents and other inconveniences.
Stepping into the working world with your first job?
A Whole Life insurance covers you for life, but at the cost of higher premiums. This is useful if you have dependents (e.g. elderly parents or children) and you need to account for their financial security. A Term Life insurance only covers you for a specific period of time (e.g. 30 years).
finance Stepping into the working world with your first job?
Buying a new home?
DID YOU KNOW While all Singaporeans are insured under a government healthcare scheme called Medishield Life, it does not cover certain categories of treatment, such as congenital anomalies, cosmetic surgery, delivery charges, mental illness and personality disorders.
It’s good to purchase health insurance early, because premiums are cheap for young people, who are considered “low-risk.”
Home Protection Scheme
Compulsory for those who wish to purchase HDB flats and use their CPF to finance the home loan. It covers any outstanding home loans in the event that you are unable to.
Mortgage Term Insurance
More relevant to those who wish to buy condominiums or even landed property. This insurance plan covers your home loan in the event that you lose your income.
ADVICE Read the fine print. Some life insurance policies accumulate cash value over time. If you terminate such policies before it expires, you’ll make a loss as the cash payout you receive will be lesser than the premiums you paid over time. You can change your mind. From when you first receive your new policy, you get a 14-day free look period. If you change your mind and decide to cancel during this period, the insurance company has to refund your premiums (excluding expenses already incurred). Be truthful and careful! Do not withold any information required in the insurance application form, and make sure that it is properly completed. Inaccurate or missing information can void a policy. Insurance Guides, MoneySENSE: http://bit.ly/1jYyY80
BUYING A CAR
We all appreciate the convenience of owning a car - but this can be a rather an expensive uptake in Singapore. A car can cost anywhere between S$116,000 to S$600,000 â€” excluding COE. How much does it cost exactly to own a car in Singapore?
TOTAL COST OF A CAR Open Market Value (OMV) Assessed by the Singapore Customs, this includes purchase price, freight, insurance and other charges for the sale and delivery of a car from its country of manufacture.
Certificate of Entitlement (COE) Price of COE differs across its 5 categories. Prices in each category are further affected by prospective car-owners through bidding exercises every fortnight. Excise Duty 20% of OMV
Registration Fees Additional Costs Overhead costs such as road tax, In-Vehicle Unit fee and vehicle number plate fee will add to the cost of your car as well.
Additional Registration Fees (ARF) ARF is calculated based on the OMV of your car. The total ARF payable always exceeds the OMV.
DID YOU KNOW Rebates of up to S$20,000 are given to cars with low carbon emissions. Similarly, surcharges are imposed on cars with high carbon emissions! It is illegal to drive a car without valid car insurance. A good policy can not only cover injuries to yourself and others, but also costs incurred should you damage someone elseâ€™s property in an accident. 12
GST 7% of OMV + Excise Duty
ARF Calculation, Land Transport Authority: http://bit.ly/1mB5tuW
ADVICE Do you really need a car? Yes, you can take out a loan to finance a car. But if you have to, can you really afford it? Consider an off-peak car. Registering your new car under the Revised OffPeak Car Scheme makes you eligible for rebates on COE and ARF. You also get discounts on annual road tax.
BUYING A HOUSE
Home ownership is probably the costliest expense you will face in Singapore. While the large numbers can be daunting, don’t get too stressed out! Here’s a brief idea on what it’s like: You can use your CPF to pay for your house, be it an HDB flat or private property. Your Ordinary Account can be used to pay the initial 10% downpayment, the balance of the purchase price and also monthly instalment repayments of a bank loan. Note that you are only eligible to buy a first-hand HDB flat if you and your partner have a combined monthly salary of less than S$10,000. If you’re buying a house with a bank loan, only 30% of your monthly salary can be used to finance the home loan each month.
DID YOU KNOW Queuing for Built-to-Order flats? MoneySmart.sg has a wonderful guide on the process: http://bit.ly/1h0xM0P You can also get a housing loan from HDB, but they only grant it upon you using up your CPF Ordinary Account towards the payment of your HDB flat.
ADVICE Have an emergency fund. You should have an immediately accessible pool of money (up to 6 months of your income) set aside as an emergency fund. As home loans in Singapore do not have fixed interest rates, fluctuations can quickly add thousands of dollars in repayments. Clear your debts. Your income level and existing debt play an important role in determining how much a bank can loan you. So clear your debts before applying for a bank loan in order to gain a higher loan approval. Don’t take out a second loan. Make sure you can afford the downpayment of your new home. Don’t take out a personal loan to pay for it. If you do that, you will end up paying two sources of interest for one house — your housing loan and your personal loan. 13
PLANNING A WEDDING
Ready for the next major milestone with your partner but not sure where to start? Weddings can be an expensive affair, but you shouldn’t have to break the bank. It is important to know what you are in for before jumping right into it.
Keeping a Budget
A Possible Budget Breakdown
Knowing how much you and your partner want to spend is very important. Have a plan and budget for your wedding, and spend within your means — you don’t want to overspend and bury yourself in debt.
Bridal Package 15%
Budget Wedding Range: S$11,249 - S$27,249
Traditional Wedding Range: S$28,249 - S$55,249
Extravagant Wedding Range: S$56,249 - S$134,984
Classic wedding gown, silver wedding bands, 20-table lunch reception.
Sweetheart wedding gown, gold wedding bands, 30-table dinner banquet.
Princess cut wedding gown, wedding bands with embossed diamonds, 60-table gala dinner at 6 star hotel.
Memorable Honeymoon Range: S$1,125 - S$5,125
Royalty Honeymoon Range: S$5,625 - S$11,125
Legendary Honeymoon Range: S$11,625 - S$16,873
8-day trip in Asia, free local cuisine and cultural tours.
2 weeks in the Maldives. Private chartered boats, local luxury home-stays.
1-month Western and Eastern Europe fantasy. Chartered limousine, exclusive royal and Vatican tours.
STAYING SANE DURING THE HUNT
Some people start hunting for jobs months before they graduate, some start later and some even take some time off for themselves after graduation before diving into the hunt. But the process of looking, applying and interviewing for a job can be daunting, exhausting and stressful. Nobody said it would be easy! It’s rare to find the perfect fit on the first go and you might even be getting a number of rejections along the way, but it is important to remain resilient. To remind yourself what you really want and to push forward. The Health Promotion Board has some friendly advice on how to develop mental resilience:
Have a support group. At this stage of your life, having family or a close group of friends to talk to can help ease stress. Sharing your concerns about an upcoming interview or even rehearsing interview questions with them can help you feel less nervous and more confident.
Look on the bright side. Cliché? Yes, but being positive doesn’t mean ignoring the problem. Being positive is about acknowledging the difficulties in adverse situations and working towards overcoming them. Bad things only remain bad when we do nothing about them.
Have faith in yourself. Positive selfimage and confidence are key traits that will land you the job you desire. Have faith in your abilities and understand that sometimes it is not because of your lack of skills that you didn’t land that job.
Look for meaning in experiences. Yes, even not getting that job. Find out why you didn’t get that job and do something about it. Not getting hired by your dream company only means “I’m not cut out for this industry” if you let it.
Learn to manage your feelings. It’s not uncommon to experience strong negative emotions such as frustration, helplessness and anger in this stage of life. It is important to not let them overwhelm you. When you feel them starting to take over, take a step back and breathe.
Laugh. Laughter is indeed the best medicine. Take some time off the job hunt and spend some time with people you truly enjoy being around and have a good laugh. It takes the edge off of things! Positive Mental Well-Being, Health Promotion Board: http://bit.ly/1mHi7bK
FROM THE INSIDE
Transitioning into a full-time working environment after years of formal education can be stressful as well. Here’s what some professionals have to say about adjusting to working life.
“The world is changing drastically. In such volatile environments, newcomers to the workforce must go beyond being competent and competitive. Fresh graduates must also be creative, cultivable, dependable and be able to persevere. Develop the flexibility to adapt to changing environments.” Andy Wong Director & Chief Operating Officer Singapore Raffles Music College
“Always seek clarity on the job function during interviews. Set targets and goals together with your superior at the start of the job and always let your superior know what you’re looking for in the job, so that both of you are on the same page in terms of expectations. Finally, be realistic.” Bryan Yap Investment Analyst Changi Airports International
“When I first stepped into the workforce, I felt intimidated by all the unspoken rules and having to learn a social construct from scratch. Because we are the sum of our life experiences, from our childhood till who we are today. We learned the basic rules at school, but transitioning to a working environment called for a different way of doing things. It’s very important to really humble yourself and be open to anything. Also, you must learn to laugh at yourself and not take yourself too seriously. It will take time to find your identity in a corporate setting, but don’t lose heart! Review your development once in a while to see whether your job is satisfying you in certain areas.” Grace Koh Management Associate Sentosa Leisure Group
WE ARE IN THIS TOGETHER
We are in this together. Find out what these people and many others feel about the quarter-life crisis at www.thenextstop.sg/tagged/people 19
SOME WISE WORDS
If you focus on comparing with other people, are you really doing something you want? Are you satisfying their expectations or are you pursuing something for yourself ? I think this boils down to the point that you need to know very clearly what you want for yourself, and that you want to live without regrets and not just compare with others.
Poh Jin Yu, 25 Player Events
Work harder and work smarter. Open yourself up so that you’re in the game with many different sets of skills. Some precious lessons I learnt were from my travels. Travel humbles you, because it reminds you that there’s so much out there. When you’re standing in front of a mountain, or when you’re helping to cook a meal for a group of kids, these things really remind you of what you want and value in life. And it makes your quarter-life crisis problems just seem so small. Jean Loo, 29 Logue
Let travel broaden your perspectives. On a personal level, it reminds that you’re just a small part of something so big.
When you are young, after you graduate, there are many uncertainties but it’s also the best time to fail. It’s like failing forward — I mean so what if you fail? You can just move on. After you graduate it’s the time when you have the least family and financial burdens.
Adeline Ong, 28 Little Red Ants Creative Studio
quarter-life conversations Expect that things are going to be different when you graduate. But once you figure it out, you’ll be able to navigate it. I don’t see the point in complaining — we should deal with the situation in the best way possible. Knowing what you want to do helps a lot — but discovering what you don’t like to do is also quite something. Change your direction to what you want and like to do, and always be open to what is out there.
Grace Auyong, 27 Zeno Group
Staying in a place of self-doubt can be destructive. I think what’s most important is to know what you really want, and to prioritize your time right. Then it’s just a simple matter of doing your best for what you believe in.
Mervyn Lim, 21 National University of Singapore
Everybody recommended us to take the safer route. You have a degree, just do something that is related to your degree.
Chen Weiyan, 25
But we know that if we take that route, we might become so comfortable that we might not want to step out again after. We knew that there were a lot of things that could stop us eventually, so this was a now-or-never thing.
In Merry Motion
Think big, start small, and scale fast. Keep moving forward. When you experience self-doubt, overcome your doubt by doing more and thinking less. Speak to a mentor. Chances are, they have walked your path and would happy to share their wisdom.
Veronica Neo, 23 CircleConnected
SOURCES MoneySENSE Ministry of Finance
Health Promotion Board Association of Banks in Singapore
Land Transport Authority
Inland Revenue Authority of Singapore Central Provident Fund Board MoneySmart.sg
And Mr Stuart Tan of the Institute of Motivational Coaching