Singapore is almost always in the top 3 when there is a list of most expensive cities.  At first glance this sounds scary but as a matter of fact the low tax rates (compared to major cities around the world) provide a massive advantage when it comes to savings.  As David Bach put it brilliantly: “what determines your wealth is not how much you make but how much you keep of what you make”.  So you are at the right place.  In a sentence, “the right place” is generally followed by “the right time” – is 2020 the right time you may wonder… with all that is going on, markets tumbling, constant bad news circulating and a general darkness hanging over us.

We would like to assure you that there is never a bad time to look into your finances.  With all the circuit breaker measures it may even be the best time.  As boring as it may be we all have to admit the circuit breaker has given us quite a bit of spare time, why not use it to have a long chat with your better half and do some spring cleaning for your finances.

Here are a few steps to get you started:

1. Define your needs and wants

Needs are the essentials of life. These are things you can’t live without, like food or utilities. 

Wants are the things you desire. They could be more expensive (but not necessarily better) substitutes for your needs or just non-essential items, like a new pair of shoes to add to your collection.

2. Where is your money going?

Print out your credit card statement and go over the items (no judging each other).  You will be surprised at how many online subscriptions you have that you may not even be aware of! Go ahead and cancel them. Take a look at your Grab and Gojek spending, consider replacing them with public transport, the short walks for this change would be good for burning off a few calories too!  Also check out your eating out and delivery habits, you could save serious amounts if you cancel just one home delivery and switch to a family home cooking activity. 

3. Creating a “Budget” is stressful so opt for a “Spending Plan”

A budget sounds stressful and maybe too big so go for a spending plan.  After steps 1 & 2 you will have a better understanding of your position.  So put down your income sources and follow that by the expenses.  Define expenses in two parts, fixed expenses such as housing (rent/mortgage), utilities, insurance, commute to work (have we said try public transport?), schooling, groceries, memberships etc. and flexible expenses such as hobbies, toys, hairdresser, dining out, ordering in, shopping for non-essentials etc.

This spending plan will give you control. Your plan will clearly show how much money you have coming in, what you’re spending it on and how much you can save.

4. Never be condescending of yourself

When it comes to saving no amount is too little.  And once you start and feel the joy these little actions bring, you will want to do more. Never underestimate your capacity, even saving 100$ per month will give you 1.200$ at the end of the year – imagine pulling that number up to 1.000$ a month.

We hereby promise you will feel much better once you have taken the steps above. Now time for a brutal fact – Nobody becomes a millionaire by saving. So why have we been going on about saving?

The truth is it will make you feel better.  And you can become a millionaire, savings are needed for this but you also have to invest these savings!

Saved money sitting in a bank will not grow – we are lucky with the inflation in Singapore, so it will not shrink either but there are many alternatives to growing your savings, especially if you are an expat.