Cover image by Md.Ma Design Consultants
Managing finance has long been a staple challenge for couples today. With Singapore’s rising cost of living, managing one’s financial assets can be a challenge for many, especially for newly-wed couples.
One of the most perplexing problems newly-wed couples can encounter is finding the right method to manage and finance their home renovations.
A Common Ritual
Often bounded by familial obligations, newly-weds may receive a barrage of feedback and suggestions on how they should own, afford, and decorate their homes. There is a high chance these newly-weds have met with different agents, interior designers, and at times, fengshui masters. In many ways, it can even be said that this seemingly tiresome process, which in retrospect may prove to be healthy for the newly-wed, is a common ritual.
In Singapore, the average renovation for a 4-room HDB flat would cost around S$40,000, excluding fittings, fixtures, furniture and appliances. Given how there is a trend for couples to adopt a singular theme in their newly-purchased dwelling, a home is not a home until it is fully furnished. Which makes a good interior designing firm a good alternative for newly-weds to offset their workload.
However, this ideal solution would only be perfect if newly-weds are paying for the services and materials that they can afford. This means newly-weds do not relish in random exorbitant purchases and having a realistic expectation of their budget.
It is also wise to set aside enough money to cover unexpected costs (usually around 15% of the overall budget), and this saving would then also mean restricting money flow from other things, including daily expenses, insurances, or outstanding education loans.
There are two loan options available that couples can get to finance their home renovations: renovation loans and personal loans.
- Renovation loans charge lower interest rates (about 5% interest per annum), but they cannot be used to get furnishings and furniture
- Personal loans would allow couples to purchase most of the renovation and furnishing needs at a heftier interest loan (about 12% interest per annum)
So, let’s say newly-wed couples borrow S$30,000 from DBS renovation loan over a period of 3 years. The interest they have to pay is around S$2,500, which is about 8% of what was borrowed. Coupled with furniture and home furnishings, the entire cost of getting the dream home will keep increasing.
At this point, many couples have wondered: Is there a better solution to getting the dream home without the hefty fees?
The answer, yes. 🙋🙋
Instead of looking at the entire expenditure as a whole, it is wise to adopt an analytical approach and discern the things you need in your home according to its importance.
Rather than purchasing all the furniture and furnishing at the same time, couples can buy the essential first, preferably items in the bedroom followed by those of the living room.
Leveraging on interest-free installments
Rather than cutting down on lifestyle expenditure or reducing monthly savings, couplecan best manage their cash flow by leveraging on interest-free installments. That is to say, couples can choose to purchase their furniture and interior décor under interest-free loans to save more money!
In Singapore, some of the online furniture websites, like Mega Furniture, Castlery or Hipvan, offer exclusive, high-quality designer furniture with interest-free installments on either debit or credit cards.
At the end of the day, your renovation loans and the above mentioned installment solutions will work hand-in-hand together to help you afford the things you need.
The uncertainty of not knowing if the decisions that accompany this big market purchase are the right ones will never wane. Building a dream home together as a couple is nonetheless a therapeutic process.
Conquering little milestones along the way and celebrating life’s little accomplishments with new trinkets or furniture, not only gives meaning to these items, but also redefines the meaning of home in the process too.
And with interest-full payments made more readily available today, your journey to owning your dream home isn’t too arduous after all.