For people who live in such a safe country, Singaporeans are a pretty kiasee bunch. We’re terrified of a whole bunch of things, and sad to say, most of these things are related to money. We’re afraid we will never be able to retire, that we’ll go bankrupt after a big illness and that we’ll be the most down-and-out relative at the next Chinese New Year gathering. One huge reason Singaporeans are so darned fearful is the fact that many feel they have no control over their lives, always at the mercy of the government/school/workplace/system. Here are three common money fears Singaporeans have, and how to deal with them.
1. Not being able to retire
Every single day, Singaporeans are greeted by the very unpleasant realisation that they might be working till the day they’re on their deathbeds when they see wizened old people who can barely stand wiping hawker centre tables and cleaning toilets. We are reminded that inflation and the high cost of living might deal us the same hand of cards when we get to that age.
Yet, despite the fear of not being able to retire, many Singaporeans continue to neglect retirement planning and fail to prioritise saving. I know many PMETs in their twenties and thirties who have little to no savings, but who still open bottles at clubs, buy designer goods and take their entire family on lavish ski trips each year.
What you can do: It’s never too early to make a retirement plan. Figure out how much you’ll need to retire and adjust for inflation. Then work out how much you need to save and invest to reach your goals. Getting started is as easy as having a plan. Conversely, if you don’t have a plan, unless you’re a compulsive saver and investor you’re going to find it hard to make any progress.
2. Drowning in debt
Don’t be fooled by the GDP statistics. While Singaporeans tend to look good on paper, they tend to be asset-rich and cash-poor. This means they spend all their money on property and end up not having enough cash to spare for their daily needs.
Overstretching yourself in order to afford that fancy condo or flashy car can lead to a scary level of debt—Singaporeans already have disturbingly high and rising household debt. Credit card debt is also a problem for many, and I have many friends who are having trouble paying their credit card bills and forced to roll their balance from month to month. This is scary because you absolutely can’t afford to lose your job or take a sabbatical due to burnout. Your job could be the only thing keeping you from going bankrupt or losing your home within a few months.
What you can do: If you can’t take the psychological burden of being saddled by high levels of debt, you need to try to pay off yours as early as possible. It might make sense to go into intensive debt-paying mode for a couple of years before relaxing with the knowledge that you’ve paid off most or not all of it. By taking on a side job or drastically cutting your spending in order to pay off your debt fast, you feel more in control—rather than letting the debt control you and struggling to play catch-up each month, you now get to decide how fast you want to pay it off.
3. Not being able to keep up with rising costs
The worrying thing about Singapore isn’t just that it’s an expensive—it’s that it just keeps getting more and more expensive. While ten years ago you had a reasonable hope of being able to afford a home of your own when you grew up, you have now resigned yourself to a fate of living with your parents forever.
To make matters worse, the ageism of Singapore employers has been well-documented, and the older you get the higher your risk of becoming unemployable or taking a big paycut should you get retrenched or lose your job. This is bad news when you factor in the rising medical bills you’ll have to foot as you get older.
What you can do: If you want to beat the system, you’ll need to eschew conventional wisdom and do things your way. Just because everyone says you need to buy a car when you’ve reached a certain stage in life doesn’t mean you have to—buy a scooter, take taxis or use public transport instead. Instead of getting a condo or five room flat, get a smaller flat and maximise bedroom space with loft beds. Look at what everyone else is doing, and then come up with ideas to keep your costs lower than theirs.
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