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Summary : High income, low wealth: Over half of adults in Singapore don’t watch their spending

 December 19, 2023 / Leave a comment

BY: TAN OOI BOON
PUBLICATION: STO 12/02/2023
PAGE:
NO. OF WORDS: 1242

The article discusses the phenomenon of individuals dedicating significant time and effort to work-related projects while neglecting household budgeting. Key points include:

  1. Budgeting Neglect: Many individuals prioritize excelling in their jobs and earning a high income but often neglect the task of creating and adhering to a household budget. Only about half of working adults in Singapore set aside a monthly budget for expenses.
  2. Overspending as a Common Issue: Overspending is identified as the primary reason people face financial difficulties. The article suggests that overspending is a global issue, and a survey of about 10 countries by audience insights company GWI supports this finding.
  3. Common Money Myths Debunked: The article challenges three popular money myths:
  • High-income earners are money smart: Contrary to this belief, individuals with high incomes may lack financial literacy. The focus on career success might result in neglecting financial education and retirement planning.
  • Easy retirement for a good life: The article emphasizes that striking it rich and retiring early is not as easy as some may believe. Many young investors experience losses due to market uncertainties.
  1. Financial Literacy Challenges: The importance of financial literacy is highlighted, noting that financial education is not a compulsory subject in schools. Lack of financial literacy can make individuals vulnerable to scams and fraudulent schemes.
  2. Survey Findings on Financial Literacy in Singapore: According to a GWI survey, only 26% of Singaporeans are considered to have advanced financial literacy. The majority are categorized as amateurs (36%) or novices (38%) in managing various aspects of their finances.
  3. Importance of Budgeting: The article stresses the significance of budgeting as a crucial aspect of managing personal finances. It mentions the need for individuals to track their spending to avoid financial difficulties.
  4. Debunking the Myth of High-Income No Debt: Contrary to the belief that high-income earners have no debt, the article states that people often land in debt when they start making more money. High income, if spent recklessly, cannot cover all expenses.
  5. Debt and Spending Statistics: On average, around 30% of Singaporeans spend at least half or more of their income every month. Approximately 50% have built up enough savings to cover three to six months of expenses, and close to 50% have debts.
  6. Call for Better Financial Management: The article concludes by emphasizing the importance of managing money effectively for good financial health. It suggests that putting effort into financial management makes the hard work in one’s career worthwhile in the long run.

The overall message is to encourage individuals, regardless of income level, to prioritize financial literacy, budgeting, and responsible spending to achieve better financial health.

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