You will be able to name the events that should prompt a review outside the yearly date.
Darren accepts a new job in June. The offer is good, the start date is three weeks away, and he spends those weeks on handover notes and farewell lunches. He does not think about money at all until August, when he notices that his rent transfer bounced. His new employer pays on the 5th of each month, and his transfers still run on the 1st, four days before the salary lands.
His yearly review is not due until March. By then, a bounced transfer would be the least of it. Some changes in life cannot wait for the annual date, and this lesson names them, with a short checklist for each, so an extra review takes about an hour.
Marriage, divorce, a new child and a death in the family all change who relies on your money and who should receive it.
After a marriage, check your nominations and your will first. For non-Muslims, marriage cancels an existing CPF nomination, and under the Wills Act it generally cancels a will made before the wedding unless the will was made with that marriage in mind. Lessons 8.1 and 8.2 covered both. Then look at your life cover, because a spouse may now depend on your income or share a loan with you, and at your emergency fund, which may now cover two people's essential costs.
After a divorce, the opposite check matters. A CPF nomination is not cancelled by divorce, and insurance nominations stay as they are, so an ex-spouse can remain your nominee until you change it. Update your nominations, your will and the donees in your LPA, and redo your spending plan for one household.
After a new child, add a guardian to your will, review your life cover against the years the child will depend on you, and check your nominations. Your emergency fund target will rise with your essential spending.
After a death in the family, check whether anyone now depends on you who did not before, such as a surviving parent, and whether you were named in their documents as an executor or donee.
A new job, a job loss or a large change in pay affect four layers at once.
Cash flow: check the date your new salary lands and move your payday transfers to match, as Darren learned. Rework your spending plan with the new take-home figure, from lesson 2.2.
CPF: for the first two months at a new employer, check that contributions arrive, as in lesson 5.4. Missing months tend to happen around a job change.
Insurance: group cover from your old employer usually stops on your last day. Note what the new employer provides, and when it starts, and update your insurance map from lesson 4.4. If there is a gap between the two, decide how to cover it before you leave.
Buffer: after a job loss, the emergency fund is doing its job, so apply the rules from lesson 3.3. After a pay rise, decide where the extra money goes before it disappears into spending. After a pay cut, check whether the buffer target and the transfers still fit.
A home purchase changes the debt, CPF and protection layers together.
Add the home loan to your debt list and your net worth sheet. Record how much CPF you used, because you will refund it with accrued interest if you sell, as lesson 5.2 explained. Check whether the loan is covered by the Home Protection Scheme or by your own life cover, and whether the amount of cover still fits the loan. Your emergency fund may need to rise, because a mortgage is a large fixed cost.
A sale is the mirror image. Work out what reaches your bank account after the loan and the CPF refund, and decide in advance where the cash goes.
Check how the property is held as well, joint tenancy or tenancy in common, because that decides whether your share passes by will, as lesson 8.1 showed.
Here is the checklist Darren writes after his new job, with figures made up for the example.
First, he moves all his payday transfers and the rent from the 1st and 2nd to the 6th, the day after his new payday. Second, his take-home pay rises from S$4,200 to S$4,600, and he decides the extra S$400 goes half to his emergency fund and half to his home fund, so his day-to-day budget stays as it was. Third, he sets reminders for the next two months to check his CPF contributions. Fourth, he finds that his old employer's group life and hospital cover ended on his last day and the new employer's started on his first, with no gap, and he updates his insurance map with the new amounts.
Four checks, each a few minutes. The whole review takes him less than an hour, and it would have taken less than that in June.
Your own life will throw up different events. Think about the next five years and which of these changes are likely for you, and for each one, what you would want to look at first.
Write the three life events most likely for you in the next five years and the first thing you would check for each.
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