This article is inspired by recent conversations with several Millennials in Singapore aged 30-35 on how they are coping with changes in their lifestyles from career to family, some even divorced or have anxiety issues due to the high cost of living, stress and comparison with peers.
For those feeling overwhelmed navigating all these things at once, rest assured you are not alone. Here are 10 tips for mindful spending to save more of your income each month for a better personal financial future.
1. Create a Realistic Budget
Don’t compare cause it just doesn’t help. Everyone starts off from different footing and career choices, so the amount of savings will naturally differ greatly too. Some have started families and prioristing young children while some prefer couple/single life and travel many times a year or take care of many seniors at once. Some have chosen to freelance instead of the rat race. Others have progressed to higher management roles while some faced challenges in finding roles that they enjoy. Some are in high paying jobs while others are in tedious roles with low bonuses, this list is really never-ending.
Nevertheless, the first step towards saving more is understanding your financial situation. Start by tracking your income and expenses. Use budgeting apps or even a simple excel sheet to categorise your spending. Be honest about your expenditures, including small daily costs like coffee or transportation. Once you have a clear picture, set a budget that allows for savings. You can consider the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings or adjust it based on your individual situation.
2. Cut Down on Restaurants
Singapore’s food culture is vibrant, and there’s good food everywhere. We all know dining out is super expensive but looking at those social media posts by friends on cool meals and recommendations can be tempting. Consider reducing the number of meals you eat out and opt for hawker food more. Suggest to friends to meet up at coffee shops for local delights too. For those who enjoy cooking, it can be economical and allows you to make healthier food choices.
3. Take Advantage of Public Transportation
Owning a car in Singapore is expensive, with high costs associated with Certificates of Entitlement (COE), parking, fuel/EV charging, and maintenance. Public transportation in Singapore is efficient and affordable. Consider using the MRT, buses, or even cycling for your daily commute. If you need a car occasionally, consider car-sharing services like BlueSG or Gojek. Plan your travels in advance to avoid spending more on taxis or Grab.
4. Minimise Unnecessary Stuff
Subscription services can quickly add up, especially if you are subscribed to multiple platforms like Netflix, Spotify, or various online publications. Review your subscriptions regularly and cancel those you don’t use often. Consider sharing subscriptions with family or friends, which can reduce the cost for each person.
Reduce trips to the mall and supermarkets and you can avoid window shopping or impulse buys. Why not catch up at parks and take long walks in nature instead of meeting up at cafes with friends? Health is wealth too.
5. Embrace Minimalism
Minimalism isn’t just a trend; it’s a lifestyle that can lead to significant savings. By embracing minimalism, you focus on purchasing only what you truly need and value. This reduces impulse buying and clutter, both of which can strain your finances. Before making a purchase, ask yourself if it’s something you genuinely need or if it will add value to your life.
Under the beautiful surfaces of those carrying luxury bags and driving cars or wearing branded stuff, not everyone can really sustain that kind of lifestyle. Nobody truly cares if somebody else bought the latest watch or shoes because many people are juggling with just too many things in their lives. Consider high quality items instead to lower the average cost per use over a longer lifespan aka super worth it.
6. Invest in Your Future
Young millennials are actually not that young anymore having work likely 8 to 10 years. Saving earlier results in more funds for bigger spends (like a car and bigger home for those with children, the cash down payments can be crazy) and retirement in future.
Instead of keeping your savings in a traditional savings account, you should be investing a portion of your income. Investments in the Singapore T-bills, Savings Bonds (SSB), Exchange Traded Funds (ETFs), or the Central Provident Fund (CPF) can offer higher returns than regular savings accounts. However, ensure that you research and understand the risks involved before investing. Seek advice from professionals if necessary or simply attend talks first to increase your knowledge.
Learn new things constantly too. Linkedin, udemy and more have a lot of courses to learn online for free or at low cost. Otherwise, YouTube has tons of content or attend networking session to learn from others too.
7. Make Use of Cashback and Rewards Programs
Cashback programs and credit card rewards can provide savings on your regular expenditures. Many credit cards in Singapore offer cashback on groceries, dining, and even utility bills. Additionally, apps like ShopBack and Fave provide cashback and discounts for online and offline purchases. However, be cautious with credit card spending—only spend what you can afford to pay off in full each month to avoid late payment and interest charges.
8. Prioritise Paying Off High-Interest Debt
Debt can be a significant barrier to saving. Don’t assume that you will pay more debts when you earn more money in future cause it's still a possibility. Pay while earning will reduce stress and prioritise those with high-interest debt. Consider consolidating your debt or transferring your balance to a lower-interest option if possible.
9. Leverage Government Schemes and Grants
The Singapore government offers various schemes and grants that can ease financial burdens and help with savings. For instance, the CPF Lifelong Income For the Elderly (CPF LIFE) scheme can help you secure a steady income stream during retirement. Housing grants are available for first-time home buyers, which can significantly reduce the cost of purchase. On 19 August 2024, MND & HDB announced that the Loan-to-Value limit for HDB housing loans will be lowered from 80% to 75% though. Also, the Enhanced CPF Housing Grant quantum will be increased to improve affordability for lower-to-middle income first-time home buyers.
10. Automate Your Savings
One of the most effective ways to ensure you save consistently is to automate your savings. Set up a continuous transfer of a portion of your salary to a savings account or investment account every month. This way, you will be less tempted to spend it.
Saving money in a high-cost environment requires discipline, planning, and a willingness to make lifestyle adjustments. By creating a realistic budget, cutting unnecessary expenses, and making smart financial choices, you can achieve higher savings and secure your financial future. Remember, small changes in daily habits can lead to significant savings over time, helping you build a stronger foundation.
Master Your Finances Wisely,
Value Vaulter
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