Self Employed Tutor: How I Manage My Finances | |
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When you are working for no one but yourself, it can be a rather "frightening and hairy" affair to contemplate and plan for the future, money-wise that is. A tutor who goes by the online moniker rejoin offers his take on this subject matter: | |
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"The following post express my views (and my views only). It's not meant to advise or counsel people. I'm a self-employed tutor in my early 30s. I have to be extra careful with my finances since I do not get employer contribution to my CPF, or the benefits of a secured job (i.e. like school teachers or some permanent employee). The following is how I handle my finances, in decreasing order of priority. 1. Health insurance/Hospitalization plans.
- I look through all the 5 major insurance companies and buy a private medical insurance (plan A). All plan A schemes are comparable to one another. I chose Great Eastern Life. I also purchased a full-rider. 2. Life insurance.
- This is for the benefit of my loved ones, should I pass away (young). When I'm old, this is for the benefit of my family and children. My total coverage is more than 300k (which is not a lot by today's standards). 3. Critical illness/Term insurance.
- I bought a CI plan, for some medium term coverage. /font> 4. Contribution to CPF
- I contribute to my OA, SA and Medisave account on a monthly basis. 5. Retirement planning.
- I have plans with various insurance companies for retirement plans. 6. Stock investing/Fixed deposits/Liquid Cash.
- I invest some of my liquid cash into short-term fixed deposits, or stocks. For high liquidity, I recommend OCBC360, as well as the current various promotions offered by UOB, POSB (up to 1.5% interest p.a.). As for how much I spend on them.
1. About 800/year.
2. Approximately 10% of my yearly income.
3. Approximately 5% of my yearly income.
4. Approximately 10% of my yearly income.
5. Approximately 10% of my yearly income.
6. The rest of my liquid cash, and available resources after expenditure. My belief in a financial planning is that you need a pyramid-like structure. The base of the pyramid has to contain the safest products (i.e. savings plans, retirement plans). The top of the pyramid will include slightly-risky products together with your liquid cash. These are the funds you can afford to lose." THANK YOU REJOIN FOR SHARING YOUR THOUGHTS HERE. The Czar (Site Founder) Dated 22 December 2014 YOU MAY WISH TO READ: 5 ways to commanding better tuition fee rates How Much Tax Does The Tutor Pay? Financial: 5 Key Things Tutors Must Be Mindful Of |
