Anne Lester’s book, Your Best Financial Life: Save Smart Now for the Future You Want, offers practical recent financial advice, particularly for Millennials and Gen Zers, focusing on retirement savings and investing. Lester provides a step-by-step blueprint to overcome saving challenges, manage money anxiety, and build a secure financial future.
The STASH Program: Lester’s five-step plan for financial planning:
- Save for Emergencies (S in STASH)
- Build an emergency fund with 3–6 months’ salary to cover unexpected expenses like job loss.
- Use high-yield savings accounts.
- CPF OA earns a guaranteed 2.5% p.a. interest, providing a safe place for part of your emergency fund. However, keep some funds liquid outside CPF for quick access.
- Calculate your monthly expenses (e.g., $3,000/month = $9,000–$18,000 emergency fund). Set up a separate savings account and automate monthly transfers to build this fund within 1–2 years.
- Take advantage of tax-advantaged accounts (T in STASH).
- The CPF Special Account (SA) and Retirement Account (RA) earn 4.08% p.a. (as of 2025), higher than most savings accounts. Maximize voluntary top-ups to your SA (up to the CPF Annual Limit of $37,740) for tax relief and higher interest.
- SRS accounts allow voluntary contributions (up to $15,300/year for Singaporeans/PRs, $35,700 for foreigners) with tax relief. Funds can be invested in stocks, ETFs, or bonds, offering flexibility for retirement planning.
- Align Saving and Debt Repayment (A in STASH).
- Balance saving for retirement with paying off high-interest debt to avoid financial strain.
- Focus on clearing credit card debt or personal loans before aggressive investing.
- Stay the Course During Volatility (S in STASH)
- Avoid panic-selling during market downturns and maintain a diversified portfolio.
- Use CPF OA or SA funds to invest in approved instruments like ETFs, bonds, or unit trusts for higher returns (though with risk).
- Handle Large Purchases Wisely (H in STASH)
- Choose financial tools based on the time horizon for large purchases (e.g high-interest savings for short-term, bonds for mid-term).
- Short-Term Goals (<3 years): Use high-yield savings accounts or fixed deposits
- Mid-Term Goals (3-10 years): Invest in Singapore Government Securities (SGS) bonds or Singapore Savings Bonds (SSB), which offer 2–3% p.a. with low risk. SSB allows early redemption, making it flexible.
- Long-Term Goals (<10 years): Use CPFIS or SRS to invest in ETFs or stocks
Lester emphasizes budgeting, cutting wasteful spending, and leveraging small savings to grow wealth (e.g., turning $100 into $1,000 through consistent investing).