We already know Singaporeans spend tons of money on homes, cars and tuition for their kids. That’s all well and good, because they at least intend for their money to go to those things.
But Singaporeans are also surprisingly careless with their cash. In fact, a recent report showed that the average Singaporean loses a whopping $2,600 a year to mystery spending—on things they didn’t intend to buy.
Whether it’s a plastic bag-full of snacks absent-mindedly bought at a 7-11 on the way back to the office after lunch or a quick coffee break at Starbucks, it all adds up. $2,600 is a huge amount to spend on something you’re barely aware of and can hardly remember.
Here’s what you could do with that $2,600 instead:
Take an overseas holiday or two
Singapore is surrounded by popular holiday destinations like Phuket and Bali that aren’t just close by but also way, way cheaper than our own overpriced country.
But with $2,600 you can go much, much further that Bangkok. And given how much Singaporeans whine about wanting to travel, it really makes sense to cut out unnecessary spending if it saves you this amount of money.
If you’re a budget traveller, you can go on a week-long holiday to Rome, London or Barcelona for under $1,600 (found out how here, here and here respectively). Follow us on Facebook for more travel tips on how to maximize your money on holiday!
If you can’t stand long-haul flights or just want to go on many short vacations rather than one or two long ones, you’ve got lots of affordable destinations to choose from.
That means not throwing away your $2,600 on useless crap can buy you not one but a few overseas holidays a year if you’re not the kind of traveller who throws a hissy fit if he’s not staying at the Ritz.
Make that $2,600 grow
You might be wasting $2,600 on mindless purchases like llaollao yoghurt, but if you had invested that amount, it wouldn’t have just been $2,600.
If you choose to invest that $2,600 instead at an interest rate of 5% per annum, in 10 years’ time the amount will have ballooned to $4,235.13. Give it 20 years, and your $2,600 has grown to $6,898.57.
I don’t know about you, but the thought of losing $6,898.57 thanks to idly shopping for new cellphone covers during lunchbreak makes me cringe.
If you can afford to spend that much on nothing at all, you can definitely afford to invest, especially now that you can buy shares on SGX in lots of 100, instead of the previous 1,000.
Get rid of debt
If you’ve been carrying a credit card balance for any amount of time, you know very well that shudder each time you receive any mail in an envelope with the bank’s logo printed on it.
You know how deflated you feel when you’re already broke at the end of the month, yet have to continue paying the bank to stop them from calling you up to hound you.
That $2,600 a year you’ve been spending on meaningless purchases like yet another tshirt from H&M can be used to pay off your debt, which also means you end up saving lots more money in interest payments and penalties.
Increase your insurance coverage
While insurance isn’t exactly the sexiest thing you could be spending your money on, some degree of insurance coverage is essential, particularly medical insurance coverage, unless you plan to risk bankruptcy in the event of a serious illness.
When we’re young and broke, we tend to buy less insurance than is wise and then hope that nothing happens to us. But with just a fraction of that $2,600, you could significantly increase your insurance coverage.
For instance, if you get your medical insurance through Prudential and are in your 30s, just paying $59 more a year will enable you to upgrade your plan from PRUshield A plus to PRUshield A premier. This allows you to claim a maximum of $632,700 per year rather than $379,700.
You might also want to consider other types of insurance. Some, like term life insurance, give you a lot of coverage for relatively low premiums—you end up paying much less than you’ll pay for those investment-linked life insurance policies, and your family still gets protected in case something happens to you.
Compare insurance quotes using MoneySmart’s Insurance Wizard.
Build up your emergency fund
If you’ve never ever maintained an emergency fund and all your money has been hitherto tied up with other things, either you’ve been supported by your parents until recently, or you’ve had to resort to using your credit cards when something unexpected happened.
Maybe your cat got hit by some ah beng’s electric bike and had to be rushed to the vet. Maybe your air con broke down, and you had to service it before everyone in your house died of perspiration.
Whatever the reason, building up an emergency fund ensures you won’t have to go into debt if something out of the ordinary happens. $2,600 might not be a large enough amount, but it’s a start.
How do you plan to curb unplanned spending? Tell us in the comments!