Recently, I came across this interesting little tidbit on the internet. The Business Times conducted an experiment by asking their interns to track their spending for a month. And while those guys seemed a little surprised at the results, to be frank most Singaporeans would have been able to predict all that.
While the experiment was limited to a very small sample size, it was pretty accurate in exposing some truths about millennial spending in Singapore. Here they are and what we think Singaporeans :
Family background matters a whole lot
There’s already been a lot of talk about how kids from wealthy families start out with a big advantage in life. In Singapore, where income tax is low and consumption tax (GST and COE, for example) is relatively high, the rich get richer and the poor get poorer. The lower your income, the more of it you’re likely to spend consuming stuff, and so the more of it gets eaten up by consumption tax.
In addition, people aren’t taxed on their investments, and there is no estate duty unlike in most developed countries, meaning a guy who inherits a ton of wealth from his parents does not get taxed on his inheritance. That’s why being born into a wealthy family is an even bigger boon in Singapore than it is in other developed countries.
But that’s not all. Many wealthy Singaporean parents love to spoil their kids—one of the interns in the aforementioned study had received an Audi he couldn’t even drive because he didn’t have his licence yet.
To make matters worse, because there is no pension system in Singapore, those who are not born into wealthy families are usually expected to financially support their parents—one of the interns was already expected to contribute to his family’s car loan despite still being a student and taking home only $550 to $800 a month from his internship. The need to provide parents with financial support further widens the gap between those who’re from wealthy families and those who aren’t.
What we can learn from this: The easy way out is to say, “Oh, I was born into a poor family, there’s nothing much I can do about it.” But the fact is, despite the steeper climb up the career ladder, those not as financially well-to-do simply have to be more resourceful. Look for scholarship or education grant opportunities, start planning for careers that will be fueled by passion, and maybe, just maybe, you can close the gap with those who were born into privilege.
Millennials spend a lot of money going out
The millennials in the above study stated that their biggest expenses were food, transport and entertainment, no matter what their budget.
Singaporeans may not realise it, but going out does cost young people quite a bit here. Singapore is a small country, but as a city it’s quite large, and people can find themselves commuting fairly long distances to get to poly or uni, and to the city centre to meet friends.
In addition, food and entertainment are a lot more expensive than they used to be, and unless students are content with eating only at hawker centres and food courts, they have to be prepared to spend quite a bit on a drink at a cafe or a meal at, say, Pastamania.
This could be because Singaporeans generally do not invite their friends home due to a lack of space and, for some, parental interference.
In addition, young people seldom hang out in parks or other outdoor areas, so eating, drinking and other indoor activities, which generally cost money, tend to be the past-times of choice.
What we can learn from this: This one is simple, really. Budget. Set aside a fixed amount that you plan to spend. It can be a monthly limit, or even a daily limit, if you’re desperate enough. And then stick to it. But more importantly, make sure you save and invest the money you’ve set aside. Because if there’s one thing you as millennials have an advantage over, it’s time. And thanks to compound interest, we know time is money.
Millennials aren’t as careful with their spending as they should be
All of the millennials in the study admitted they did not usually track their spending and most had no idea how much they spent each month. After the experiment ended, none continued to monitor their spending.
This isn’t surprising. No matter how broke you are as a student, chances are you aren’t thinking about things like investing and retirement. The money you earn is just cash you spend from day to day.
The problem is that this attitude towards money isn’t as acceptable in adulthood. People’s lives get ruined because of this. Various surveys have claimed that anywhere between 36% and 80% of young Singaporeans aged between 20 to 35 have no savings, which clearly shows there is a need for greater financial awareness.
What we can learn from this: You’d be surprised that this is not just a millennial problem. People of all ages are living paycheck to paycheck in Singapore. But that doesn’t mean you have to. In fact, learning the value of money as early as possible means you have more time to make the most of it. Don’t know where to start? Our Learning Centre, which has tips on Careers, investment, and credit cards is one good place.
Are you a millennial? If so, does the above accurately describe you? Tell us in the comments!
Keep updated with all the news!
Get the latest personal finance tips and tricks delivered to your inbox!
We promise never to spam you!