According to the Economic Intelligence Unit’s Worldwide Cost of Living survey, Singapore was ranked as the most expensive city for expatriates to live in. But the Singapore government has said that the survey does not reflect the cost of living of Singaporean households, do you agree?
While we agree that you can definitely live frugally in Singapore, some components of spending remain pretty expensive, especially when it comes to housing, cars and perhaps, healthcare. It is no wonder the younger generation here may fret about their financial future, and the 5 points listed below probably tops the list of financial fears young Singaporeans have:
- Unable To Own A Roof Over Their Head
Let’s face it; gone are the days where you are able to find an affordable 3-room HDB flat for around $250,000. These days, you can even find public housing that sells for over a million dollars.
HDB prices have shot up substantially over the years, and it has finally come a point that the youths feel they may never have the money to afford their own home. This is especially true as well with the HDB housing arrangement where you’ll need to be married to get a BTO flat, or have limited choices after the age of 35. Well, we also know that people are getting married later and when you are at the age of 30, are you willing to wait a few more years for the completion of BTOs?
Perhaps we’ll reach a point where renting becomes the norm in Singapore in the next decade or at least young couples will be more willing to stay with parents initially to generate enough income in their CPF for the initial down payment.
Tip: Everyone negotiate with their bosses for CPF even part time or contract roles, that way you get an additional 17% from the employer which will go a long way in the long run for your housing. Employer CPF contribution
- Being Hit With An “Expensive” Medical Condition
It’s funny how one of the first things we think about when we’ve developed a medical condition that needs treatment is “how much it costs”. In Singapore, we do not have the luxury of fully-subsidised healthcare, and we know that your Medishield Life is not all-inclusive. Therefore, there’s often a fear that if we are not well-covered by insurance, an unfortunate illness may land us in financial hot soup, wiping out years of savings.
So perhaps the financial fear associated here is to not be adequately covered by our insurance. There’s so much jargon in insurance, so many different types of it and nothing so all-encompassing that you can spend hundreds of dollars a month in premium payment and still be under-insured. Scary isn’t it?
Tip: If you are male, make sure you check out the Mindef / Home Team group insurance by Aviva. The packages are affordable and you are able to get your dependents insured as well. Apart from that, there are riders that you can load up on. Check out the Aviva plans here
Also do ensure you select a good medisave integrated shield plans to maximize your insurance coverage. What is medisave integrated shield plans
- Being Retrenched
Being retrenched is a scary situation for everyone. Even if you are staying at home with your parents(of course that helps), there’s still fixed costs you’ll need to cover per month – insurance, credit card bills, utility bills, food costs and mobile phone bills. That’s worse if you haven’t got any emergency funds built up.
The situation can be stressful for those who has their own family – a dependent child or parent, hefty mortgage repayments or car loans to service.
It is thus important to have at least 6 months of emergency funds built up once your career is on a stable footing to meet crises like this.
- Not Sure How To Invest
The younger generation knows that saving is no longer the way to build wealth. While it might have worked in our parents’ or grandparents’ generation, the pathetic interest rates you get from your savings account will bring you nowhere with your money. And the way to go is to invest.
But how? Ask around and you’d see that some of your friends may read a bit about the possible ways to invest, probe around a little but amount to no action taken. Sad to say, we are a generation of book-smart and risk averse Singaporeans, making us the worst candidates for investing.With little motivation and fear of financial loss, we stick to the safety of bank deposits and losing value of our money over the years.
- Shouldering The Cost Of A Traditional Wedding
Wedding is a happy occasion, but for many Singaporeans, it is also an expensive occasion. It is both expensive for the newly-weds as well as the attendees! A typical Singaporean wedding with a banquet dinner typically costs between $30,000 to $50,000, and that’s excluding all that extravagant stuff of additional floral decors, having special performances during the wedding or hiring a photo booth.
In fact, it’s so well-known that weddings are expensive such that many couples are opting for something simpler or cutting cost through other ways – a buffet-styled wedding lunch, skipping the banquet altogether or having a smaller wedding with less than a hundred guests.
While we agree that the wedding is the celebration of the love between two people and shouldn’t become an unnecessary financial burden, others believe it’s an affair between two family. That’s where parents can sometimes add to the stress by demanding for a minimum number of banquet tables at none of their costs. Well, being filial sons and daughters, would you bear to deny them this once-in-a-lifetime opportunity to be proud of their children?
As a Singaporean, I am constantly engage in conversations like this with friends, are there more financial fears that we haven’t covered yet? Why not comment and share about it.