6 Personal Finance Myths Singaporeans Need To Stop Believing

singapore personal finance myth

When it comes to finance issues, we get wisdom from our parents, friends, lecturers, siblings, and our own experiences… But are they always accurate and trustworthy?

It’s tough enough having to pay and save up for so many things like our study loans, wedding, house, insurance. We don’t need false hearsay misleading our financial management decisions. Here’s a list of myths Singaporeans should really stop believing:


MYTH 1: Expensive = Better Quality

Whenever we see two of the same products and one is priced higher than the other, we’ll automatically assume the more expensive one is of “higher quality”. The reality is prices are not necessarily indicative of a product’s value. A cheaper item can be of higher quality than its higher-priced counterpart.

The reason for this is due to the company’s financial expenses. Some companies use lesser overheads while other companies spend millions marketing or outsourcing production, hence you get major price differences for exactly the same products. The best way to decide which has better quality is always to read credited online reviews (no not paid “influencer” posts but reviews by real people), and try them out yourself before buying.


MYTH 2: “I don’t earn enough, that’s why I can’t save”

Your payday just arrived not long ago and already, a fraction of your income for this month has diminished into thin air. Where did all that money go?

So you forget any plans you have for saving and just “wait till you’re earning more”. But how long do you intend to wait? 1 month, 2 months, 1 year, 5 years?

And even when you’ve managed to wait till your salary increases, what makes you think you won’t have an increased expenditure? No man, don’t go there.

At this rate, you and your partner will be wearing cheese rings and sleeping in huts in future. When it comes to saving, it’s important to start young. If you feel you don’t have enough disposable income to contribute, cut back on unnecessary evils like Grab and Gojek rides or $7 lattes so you can save at least a little every month.

Always keep an emergency fund on hand, in case of unforeseen situations. A good gauge of a sufficient emergency fund would be at least 2-3 months’ salary.


MYTH 3: “I save all my money in my bank account”

Sounds contradictory to the point I’ve mentioned before this. But what I’m trying to say here is that saving alone is not enough.

There is a fine difference between scrimping, and trying to accumulate money. While cutting back on things you do not need is good as a stepping stone to saving, you need to strategize how you spend and save. At this point in time, bank interest rates for savings accounts in Singapore are so low. If you’ve been monitoring our economic climate, you’ll know that chances are you’re losing out money if you keep it in the bank; the rate of inflation is often higher than the interest rates banks give you.

And even then, saving and being frugal only brings you so far. It’s critical you start investing in products that could help your money grow, such as regular savings plans, after you’ve built up a sufficient emergency fund that we mentioned earlier.

While frugality is encouraged, it isn’t all about being stingy with your money. If you need to spend that money to help build yourself up (no I’m not talking about plastic surgery) and increase your earning capability, then spend that money. Splurge on those coding lessons you’ve been meaning to learn, and save on that overpriced Starbucks.


MYTH 4: “Credit cards are bad for you”

Whenever we hear the word “credit card”, we picture heavy debts and busted credit limits. But credit cards aren’t BADDDD per se… You know what’s bad? The attitude you bring towards paying your bills! DON’T SPEND WHAT YOU CAN’T AFFORD TO PAY.

We humans get carried away living the high life because we don’t feel the immediate consequences. And when the bill gets back? We find out we’ve spent more than we can pay up. Whose fault is that? You gonna blame a piece of plastic for seducing you into spending?

Think about it. The credit card isn’t the problem. In fact, they give you more bang for your buck by giving you cashback rebates, air miles and reward points for things you do everyday like dining. Just check out our MoneySmart credit card comparison page to see all the benefits they have to offer. Eg: the Citi Cash Back Card lets you earn 8% cash back from buying groceries, pumping petrol, dining and even taking Grab rides. If you compare this to just plainly paying in cash, you wouldn’t even have earned that 8%.


MYTH 5: “I always fall sick, cannot qualify for insurance”

In the past, you may be considered uninsurable if you fell seriously ill early in life. This is because insurance companies would point to your medical history as a justification for not insuring you.

Thanks to Medishield Life, Singaporeans aren’t uninsurable anymore. The coverage has been extended to include those who already have pre-existing conditions. And although the premiums have increased, they’re still relatively reasonable, considering the higher level of coverage.

In fact, these days, insurance companies are coming up with insurance policies to target particular illnesses that you might be more susceptible to. For example, NTUC Income and AXA have come up with cancer protection policies. AIA came out with the AIA Diabetes Care critical illness (CI) coverage for Type 2, pre- and gestational diabetics, providing up to $250,000 worth of coverage for key diabetes-related conditions. So don’t give up hope yet, they might just come up with similar plans for other common ailments in the future.


MYTH 6: “I deserve a high-paying job after getting my degree”

I think we’ve seen enough of news articles talking about how increasingly tough it is for undergraduates these days to find a stable job. Some say it’s because of the poor economy. Others say graduates these days expect too much from their first job when they have nothing to offer employers besides a mere degree. To be completely honest… I’ve been there and I totally understand why!

It’s not easy to grow up with constant nagging from parents, like “Girl ah, must study hard know, or else next time you grow up mommy die already you dunno how to take care yourself no money to eat how?”, and “must study hard go to good school, go our local uni then next time can find a good job already”.

The whole concept of graduating from a local university and getting a high-paying job is almost drilled into us. It was our own happy ever after for so many years of hard work, studying. But here’s the sad part… NOBODY CARES IN THE CORPORATE WORLD.

Your employer only cares if you’re useful to their company. And unfortunately, until you’ve proven yourself, having just a piece of paper certifying your ability to pass examinations without any real world experience counts for shit. This is why you would have to come to a point where you tell yourself to suck up the shit pay and just focus on gaining that experience first before you start expecting things to magically happen. Sounds brutal I know but this is the real world homie, and expectations like this ain’t gonna fly. #justsaying


With all that’s been said, it’s important for us to do proper research on what is really happening in Singapore today. I know finance isn’t exactly the most interesting topic, but reading up would beat listening to a few parties’ unfounded opinions on what’s best. The lesson here? ALWAYS DO YOUR HOMEWORK. Because things change all the time.

What other finance myths have you heard? Share them with us.