4 Planning to buy big-ticket items

If you anticipate some big expenditure soon, such as home renovations or a family holiday, Mr Lam suggests that you save the bulk of your bonus for it.

5 Job stability

Providend chief executive Christopher Tan reckons that if you are a government or statutory board worker, you are unlikely to lose your job.

'With job stability, going for a holiday, albeit a not extravagant one, may not be too much to ask for. Buying a gift for someone very dear to you is fine, too,' he says.

6 Top-up schemes

There are several schemes in Singapore which allow you to qualify for tax relief and/or save for your retirement, such as the Supplementary Retirement Scheme.

Another possibility is topping up your children's Children Development Account (CDA).

This is how it works: If you have not exhausted the government matching contribution limits under the Children Development Co-savings (Baby Bonus) Scheme, it ensures you get 'double the money' for your children's education expenditure, says Mr Lam.

The CDA is a special savings account that you open at any OCBC Bank or Standard Chartered Bank branch for your child if he is eligible for CDA. You can save in the CDA any time until Dec 31 in the year your child turns six.

The savings will be matched up to a cap of $6,000 each for the first and second child, $12,000 each for the third and fourth child, and $18,000 each for the fifth and subsequent child. The Government will match your savings in the following month.

Other schemes include Central Provident Fund top-ups for family members.

<< Setting aside emergency funds

This article was first published in The Straits Times.