Unless your boss is the devil incarnate, you’ve probably received news of your salary increment for 2016… although let’s admit it, there’s a good chance your increment barely keeps pace with inflation. (In fact, Eunice, managing consultant at recruitment firm Jade Clover Pte Ltd, says these low increments are precisely the reason she advises many of her candidates not to stay in the same job for more than three years.)
Still, that hasn’t stopped many Singaporeans from using their bonuses and increments as an excuse to party like it’s 1999, conveniently forgetting that in 1999, the cost of living was way lower. Whatever you do, avoid at all costs the following.
Splurging on something stupid
Now, we’re by no means telling you to live a completely spartan lifestyle, and we’re not going to burn you at the stake for treating yourself a little to celebrate your salary increment.
But “treating yourself a little” does not mean spending $10,000 on a new home entertainment system to celebrate a $100 a month increment, nor does it mean you get to buy a $5,000 Chanel bag when your salary has gone from $2,500 to $2,600.
Signing up for more financial commitments
Few people in Singapore seem to know how liberating it is to be free from financial commitments. Instead, it seems like we can’t wait to get into debt over cars and even things like LASIK surgery, furniture and home renovations.
Now, a raise or a bonus should give you the opportunity to get out of debt, and to release yourself from your financial commitments, whether they be repaying student loans or getting out of credit card debt. Don’t make the mistake of signing up for even more financial commitments on a whim, thinking that you can now afford them.
Inflating your lifestyle
Just because you’re now earning more doesn’t mean you now “deserve” to feast on foie gras at every meal or hire a personal masseuse instead of going to those foot reflexology uncles.
When you keep inflating your lifestyle each time your income rises, you get caught in a cycle that keeps you firmly on the hamster wheel, working harder and harder to maintain an increasingly extravagant lifestyle.
That’s how Singaporean PMETs earning well above the median income get themselves into debt—by living wannabe-luxurious lifestyles they can’t afford.
Telling the whole world
It’s rather unfortunate that many Singaporeans still have the third world mentality that when you’ve got money (heck, even if you haven’t), it’s your duty to flaunt it.
Thanks to social media, it’s now easier than ever to show off, whether by putting up photos of your sweet new ride on Instagram or congratulating yourself for “killing it” at work this year on Facebook.
If you’re smart, you’ll want to keep any money-related successes at work, whether they be raises or big fat bonuses, to yourself. Nothing good can come out of telling the world. Opportunistic people might try to borrow money from you, while buay hiao bai freeloaders may ask, “Where’s my treat”? On the flip side, people who are jealous or just sick of your bragging might start distancing themselves from you.
If you’re going to tell everyone, don’t be surprised when you open that table at the fancy club only to have everyone run off to the toilet when the waiter comes with the bill.
Spending it only on “fun” things
Sure, personal finance doesn’t exactly sound like the most exciting thing in the world, but you know what’s exciting to me? Being able to take a few months’ break from work or retire altogether without worrying about debt collectors knocking on the door.. And unless you’ve got a trust fund somewhere, attaining that kind of freedom only comes with careful saving and investing—the “boring” stuff.
So by all means congratulate yourself on receiving a juicy bonus or snagging a generous salary increment. But don’t spend the extra money in your account only on “fun” stuff like restaurant meals and new clothes. Put at least a portion aside to pay down debt, save and invest.
Have your money habits changed in any way since receiving your last pay increment? Tell us in the comments!