5 Singapore Life Essentials You Absolutely MUST Save Money For

Jeff Cuellar



If you rely on your monthly Central Provident Fund (CPF) account as your sole means of “saving” for the future – you’re in for a rude awakening. A LOT can happen between now and when you hit the “retirement age.”  And if you need access to “your” CPF money for an emergency – you probably won’t get it (unless it’s for a housing purchase or healthcare expense).

If you have little or no savings right now, you’ve got a lot of catching up to do. Whether you have very little in savings because you spend like a drunken U.S. sailor at Orchard Tower every payday or just have bad luck… it doesn’t matter.

What matters is building up your savings as soon as possible. And the first thing you must do is get control of your finances by figuring out why you can’t save and making a budget.

Building up your savings is incredibly important because you’ll NEED that cash down the road to cover these 5 Singapore life essentials:


1. When You Need to Survive Unemployment

Unemployment can happen to anyone. You can have a degree from the National University of Singapore (NUS) and be competent at your job – but if your boss wants to cut your salary so he can hire two or three foreigners for the same price, what’s to stop him?

Pop Quiz: Do you know how much money you should have saved up to “survive” a period of unemployment?

The Answer: Three to six months.

Having that much saved up will keep you from resorting to calling up your friendly neighborhood Ah Long or selling your prized to comic book collection just to survive. If you want to find out more about how you can apply more structure to your savings, follow us on Facebook.


2. When You Need to Pay Off Debt

According to the Credit Bureau Singapore (CBS), about 20% of all credit card holders in our lovely city-state have rollover debt.

The bad thing about rollover debt is that it takes years to pay off, or worse, it can pick up momentum and keep growing out of control.

But if you have the discipline to build up your savings, you will have much more leeway to start paying off credit card debt, or even better, pay eliminate credit card debt before it happens by paying the full balance each month.


3. When You Need to Retire

Just because it’s mandatory for you put 20% of your monthly salary (and your employer to put in another 16%) into your CPF account doesn’t mean it’ll be enough for you to retire on.

That’s because it’s a well that you’ll draw on for other things – namely any health-related expenses and of course, when purchasing a home.

Of course, just putting your savings into a savings account isn’t going to cut it because the interest rate is pathetic and won’t be the rate of inflation. Instead, you’ll want to try your hand at investing to build up your returns.

Additionally, you can also supplement your “retirement” savings by finding ways to generate more income.


4. When You Need to Buy an HDB Flat/Condominium

Whether you’re buying an HDB flat or a condominium, it’s extremely important to have good savings for two key reasons:

  1. Because you’ll need your savings to pay for the down payment.
  2. Because having savings and good credit will help you get a home loan.

You’ll need to make a 20% down payment on a home, but the amount of CPF and cash (savings) required depends on the loan type:

  • HDB Loan:  If you take out an HDB loan, that 20% down payment can be all in CPF (ex. for a $350,000 HDB flat, you must have at least $70,000 in your CPF account to make the down payment).
  • Bank Loan: If you take out a bank loan, at least 5% of the 20% down payment must be cash with the rest coming from CPF (ex. for a $650,000 condominium, you must pay $32,500 in cash and $97,500 from your CPF account).

If you’ve saved well and have enough to think about buying a home but aren’t sure what you can afford, you can check out this TDSR Calculator to find out in minutes.

Alternately, you can always use our free home loan wizard so you can find the home loan interest rate that’ll save you the most money.


5. When You Need to Care for Your Parents

Building up your savings won’t always be about accumulating money for your own needs. There will be times when you’ll need to use some of your hard-earned savings selflessly, not selfishly.

One of those big selfless moments involves helping those who invested countless hours and dollars in your personal development – your parents.

If your parents are in a dangerous financial or medical situation, the last thing you want to say to them is, “sorry Mom and Dad, I can’t help you.”

Generally speaking, most parents would help their children in the event that they needed financial help with living expenses or medical bills. But by accumulating your savings, you can avoid the painful and embarrassing situation of not being able to do the same for your parents.


Are there any other items that are worth saving up for? Share your thoughts with us on Facebook! For even more useful information on everything personal finance, visit MoneySmart today! Also, don’t forget to sign up for our newsletter to get weekly updates!


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Jeff Cuellar

I'm known by many titles: copywriter, published author, literary connoisseur, ex- U.S. Army intelligence analyst, and Champion of Capua.