Saving money in Singapore can be challenging due to its high cost of living, compounded by inflation and rising expenses. While most Singaporeans maintain strong savings habits, recent data shows a 5.9% drop in personal savings in 2024, highlighting financial pressures.
Budgeting and cutting unnecessary expenses remain crucial for families and individuals. However, younger Singaporeans face unique challenges, with 27% of Gen Zs and millennials overspending to keep up socially. Amid these challenges, the Assurance Package will provide a one-off cash payout of up to S$600 in December 2024, offering some relief for households grappling with rising costs.
With this guide, you will learn how to budget, make smarter spending decisions, maximize government support, and discover low-cost family activities to live well and save more in Singapore.
Financial Planning Basics
Effective financial planning is the cornerstone of saving money, especially in a high-cost environment like Singapore. It starts with creating a clear budget and ensuring consistent savings through automation. Let’s dive into two essential strategies that will help you build a strong financial foundation.
Set Up a Budget
Have you heard of the 50-30-20 rule?
This is a smart money management method that will require you to divide your income based on your needs, wants, savings and debt repayment. So, what you need to do is divide 50% of your income for your needs and necessities, 30% for your wants, and 20% for savings.
For instance, if you earn $4,000 a month, you should allocate half of the amount ($2,000) for your necessities. This will include groceries, utility bills, and mortgage payments. The 30% of your monthly income will be for discretionary expenses or, in other words, your wants. Thus, $1,200 can be used to spend on your daily lifestyle; eating out with friends, or going bowling. The other 20% ($800), should be allocated for savings, investments or any kind of emergencies.
Tracking income and expenses is crucial to understanding your financial health. A structured budget helps you identify spending patterns and allocate funds to meet your goals. To help you stay on track, you can use money saving apps like YNAB, Planner Bee, or Spendee.
Automate Your Savings
The best and easiest way to improve your financial savings is by setting up automatic savings. Nowadays, there are many banks that offer automatic transfers to a separate bank account. This way you can automatically put away extra cash without having to worry about “accidentally” spending them on anything unnecessary. You have the option to decide how much money will go into your account; whether it is a fixed amount or based on a percentage.
If you have a full-time job and have a retirement planning Singapore, you can ask your employer to transfer a specific amount from your salary directly to your retirement or savings account. For further inquiries, you can ask your HR representative for more information.
Maximizing Your Spending
Making the most out of every dollar you spend is a powerful way to save money without compromising your lifestyle. With the right tools and strategies, you can earn rewards, enjoy discounts, and reduce unnecessary expenses.
Use Credit Card Rewards and Cashback Programs
Credit cards with high cashback rates or reward points are excellent for saving on everyday purchases. Options like the UOB One Card and DBS Live Fresh Card offer generous cashback on groceries, dining, and transportation. Some cards even provide exclusive discounts on travel and online shopping.
Here are a few tips to maximize these benefits:
- Plan your purchases and stick to your budget.
- Pay off your credit card bill in full each month to avoid interest charges.
- Track your spending to ensure you’re meeting cashback thresholds.
- Consider pairing cards with apps like DBS PayLah! to enjoy dining deals and offset bills with reward points.
Shop Smart with Online Platforms and Discounts
Singapore’s e-commerce platforms, such as Shopee and Lazada, offer frequent promo codes, flash sales, and cashback options. Look out for “mega sale” days like 11.11 and 12.12, where deals are even better. Use price comparison tools like ShopBack and PriceKaki to ensure you’re getting the lowest prices.
For groceries and dining, apps like Burpple, Chope, and Fave help you find one-for-one deals and meal discounts. If you prefer delivery, leverage cashback platforms to earn cash rebates on your orders. Planning ahead and using these tools can significantly lower your spending on essentials.
Pro tip: Combine credit card rewards with these discounts for maximum savings. For example, use a cashback credit card while shopping during a flash sale to double your benefits!
Cut down on unnecessary spendings
It might be ideal for you to look back, reflect, and identify your spendings on non-essentials. This can include the money you spend on entertainment, eating out or even online subscription services. Once you have identified these ‘wants’ rather than ‘needs’, it will be easier for you to cut back in the pursuit of saving money.
So, what can you do?
Although it may be hard terminating the automatic monthly subscriptions that you don’t regularly use might be the way to go. Online subscription services like Spotify, Netflix, Apple Music or Tidal will require you to pay based on auto monthly subscriptions. If you find yourself not having time to enjoy these services, you might want to consider terminating these monthly subscriptions.
You can also opt to dine out only once or twice a month. If you do feel like going out once in a while, try to look for cheaper alternatives where you do not have to fork out a huge amount of money just for a plate of food.
Family and Entertainment Savings
Finding budget-friendly ways to spend quality time with family is easier than you think. By exploring free or discounted activities and leveraging membership benefits, you can create memorable experiences without breaking the bank.
Opt for Free or Low-Cost Activities
Singapore offers numerous free or affordable options for family fun. Parks like East Coast Park and Singapore Botanic Gardens are perfect for outdoor activities like cycling and picnics. Additionally, museums such as the Asian Civilisations Museum often offer free entry on specific days.
Take advantage of resources like the National Library Board, where you can borrow books, attend storytelling sessions, or join educational workshops at no cost. Community centers also host free or low-cost events for families, making them a great place to engage in arts, fitness, or cultural programs.
Leverage Family Packages and Discounts
For popular attractions, consider family packages that offer discounted entrance fees. Sentosa and the Singapore Zoo provide annual passes that save money in the long run. Similarly, platforms like Klook and Fave often list deals on family-friendly activities, allowing you to explore more for less.
Membership cards such as the “PAssion Card” which offers excellent discounts on over 1,000 merchants for cheaper shopping. Another option is applying for an IKEA family card which is free and will entitle you to member prices.
Join Reward and Membership Programs
Boost your savings by joining rewards programs like Sentosa Islander Membership, which offers exclusive perks, discounts, and points for every dollar spent. Apps like ShopBack help you earn cashback on dining, retail, and activities, while yuu Rewards Club lets you collect points for daily expenses. Combine these programs with credit card rewards to multiply your benefits.
With these strategies, you can enjoy family entertainment while staying on budget.
Energy and Utilities: Cut Down on Monthly Bills
Reducing energy and utility costs is a smart way to free up your monthly budget. By making small changes to your habits and taking advantage of government initiatives, you can significantly lower your bills while being environmentally conscious.
Optimize Your Electricity Plan
Switching to an Open Electricity Market (OEM) provider can help you save on electricity rates compared to standard tariffs. Providers like Geneco and iSwitch often offer competitive rates with fixed-price or discount-off-tariff plans.
Here are a few tips for cutting down energy and utility bills
- Set your air-conditioner to 25°C: This optimal temperature reduces energy consumption while keeping your home cool.
- Use energy-efficient appliances: Look for high energy-efficiency ratings on refrigerators, washing machines, and air-conditioners.
- Unplug devices when not in use: Electronics on standby mode still consume power. Plug devices into a power strip to easily turn them off.
- Switch to LED lights: LED bulbs use up to 75% less energy than traditional bulbs and last significantly longer.
- Use timers or smart plugs: Automate appliances like water heaters or lights to switch off when not needed.
Additionally, you can claim e-vouchers for energy-saving appliances. From April 15, eligible HDB households can claim $300 worth of e-vouchers under the expanded Climate Friendly Households Programme to purchase appliances that save energy and water.
Save on Water and Internet Bills
Lowering water consumption is simple with water-saving habits like shorter showers and installing water-efficient devices, which can also be purchased using the government-issued e-vouchers.
Tips to reduce water bills
- Wash clothes with cold water: Heating water accounts for a significant portion of energy use in washing machines. Switch to cold water to save.
- Fix leaks promptly: A dripping tap can waste up to 15 liters of water per day, increasing your bill unnecessarily.
- Install water-efficient devices: Use dual-flush toilets and aerated showerheads to conserve water, and claim vouchers for these products if eligible.
Tips to reduce internet bills
- Reduce Wi-Fi dead zones: Invest in mesh Wi-Fi systems to optimize your internet speed and avoid paying for unnecessary bandwidth.
- Compare broadband plans: Check providers like Singtel and MyRepublic to find faster, cheaper plans.
- Bundle services: Combine your broadband and mobile plans to unlock discounts and added perks.
- Install solar window films: These films reduce heat and lessen your reliance on air-conditioning.
- Maximize natural lighting: Open curtains during the day to save on lighting costs.
- Track usage: Use smart meters or monitoring apps to track electricity and water usage, helping you identify areas for improvement.
Increasing Your Income
Saving $5,000 in a few months might seem challenging, but with the right strategies, it’s within your reach. By boosting your income through side gigs and making smart investments, you can accelerate your savings and achieve your financial goals faster.
Explore Part-Time Jobs and Freelancing
Taking on a side gig is an effective way to increase your monthly earnings. Here are some popular options in Singapore:
- Food Delivery: Join platforms like GrabFood or Deliveroo to earn extra income on a flexible schedule.
- Tutoring: Offer your expertise in subjects like math or languages through agencies like SmileTutor or ChampionTutor.
- Freelance Work: Provide services in writing, graphic design, or programming on platforms like Glints and Freelancer.sg.
- Selling Pre-loved Items: Use Carousell to declutter your home and make money from items you no longer need.
By dedicating a few hours each week, you could earn an additional $500 to $1,000 per month, helping you save $5,000 in just a few months.
Quick tip: Choose gigs that align with your skills and interests to make the experience enjoyable and sustainable.
Invest Smartly with CPF and Other Options
Investing wisely not only grows your wealth but also brings you closer to your savings target. Here’s how you can do it:
- CPF Investment Scheme (CPFIS): Invest a portion of your CPF Ordinary Account in stocks, ETFs, or REITs to potentially earn higher returns. This can accelerate your savings without affecting your cash flow.
- Fixed-Income Assets: Join the increasing number of Singaporeans – now 88%, according to OCBC’s 2024 Financial Wellness Index– who are investing in stable options like Treasury Bills (T-bills).
- Top-Up Your CPF: Make voluntary contributions to your CPF account. This not only boosts your retirement savings but may also offer tax reliefs.
Pro tip: Even small, regular investments—like $200 per month—can compound over time, significantly increasing your savings.
Government Schemes and Benefits
The Singapore government offers a variety of schemes and benefits to support citizens in managing their finances and planning for the future. These initiatives cover retirement savings, healthcare, housing, and tax reliefs, ensuring greater financial security for individuals and families.
Overview of CPF Schemes
The Central Provident Fund (CPF) is a comprehensive social security system designed to provide for retirement, housing, and healthcare needs. A key feature is CPF Life, a lifelong annuity plan that ensures regular payouts during retirement.
Meanwhile, MediSave allows Singaporeans to save for future healthcare expenses, such as hospitalization and approved medical treatments. Together, these schemes form a robust safety net for Singaporeans, helping them secure their financial future.
Tax Reliefs and Subsidies
The Singapore government offers various tax reliefs and subsidies aimed at easing the financial burdens for both families and individuals. Here’s a comprehensive list of key schemes that can help you save more money:
Working Mother’s Child Relief (WMCR)
Provides tax relief for working mothers with Singaporean children to encourage both family formation and female workforce participation. This scheme reduces taxable income by up to 100% of the mother’s earned income, depending on the number of children.
- First child: 15% of earned income
- Second child: 20% of earned income
- Third child and beyond: 25% of earned income
This is available for Singapore tax residents who are working mothers with biological or legally adopted children.
CPF Relief
Offers tax relief to incentivize individuals to contribute to their Central Provident Fund (CPF) accounts, promoting long-term savings for retirement. This scheme helps lower taxable income while securing future retirement savings.
Types of CPF Relief:
- CPF Employee Contribution Relief: Available for mandatory employee contributions up to the annual CPF salary ceiling.
- Voluntary CPF Cash Top-Up Relief: Tax relief for voluntary top-ups to CPF Special Account (for individuals) and MediSave Account.
Community Health Assist Scheme (CHAS)
This is a healthcare subsidy program that provides discounts on medical and dental services at participating clinics. It offers significant savings on GP consultations, dental care, and chronic illness treatments.
Singapore citizens with subsidies based on household income are eligible to apply. CHAS Blue and Orange tiers offer different levels of benefits, while the CHAS Green tier focuses on chronic disease management.
HDB Housing Grants
These are grants provided by the Housing & Development Board (HDB) to make home ownership more affordable for first-time buyers.
Types of Grants:
- Enhanced CPF Housing Grant (EHG): Up to SGD 80,000, based on household income.
- Family Grant: Up to SGD 50,000 for families purchasing resale flats.
- Proximity Housing Grant: Up to SGD 30,000 for families living near or with their parents.
You can learn more about the eligibility conditions for each housing grant here.
Resources for Further Exploration
Here are key resources to help you explore and maximize the government schemes and benefits available in Singapore:
- Central Provident Fund (CPF) Website: Official portal for CPF-related information, including retirement planning, CPF Life, MediSave, and investment schemes. Visit: CPF Website
- IRAS Tax Reliefs Page: Comprehensive details on tax reliefs like the Working Mother’s Child Relief (WMCR), CPF Relief, and others to reduce taxable income. Visit: IRAS Tax Reliefs
- CHAS (Community Health Assist Scheme): Information on healthcare subsidies available to Singaporean families, including eligibility and application. Visit: CHAS Portal
- HDB Grants and Housing Support: Detailed breakdown of housing grants, eligibility criteria, and application steps for BTO, resale, and EC flats. Visit: HDB Housing Grants
- SkillsFuture Singapore: Explore courses, credits, and programs to upskill or reskill while receiving government funding. Visit: SkillsFuture
- MediShield Life and CareShield Life: Information on national healthcare insurance schemes and support for long-term care. MediShield and CareShield
- Workfare Income Supplement (WIS) Scheme: Aimed at lower-income workers to provide cash supplements and CPF contributions. Learn more here: CPFB WIS Scheme
- Assurance Package for Cost of Living: Learn about cash payouts and support to ease cost-of-living pressures. Visit: Assurance Package Details
Conclusion
By applying these money saving tips, you can reduce the cost of living in Singapore and enjoy significant savings. Whether it’s optimizing your spending, boosting your income, or leveraging government benefits, every step contributes to building a stronger financial future. Start today and see how small, consistent efforts can lead to significant savings in Singapore.
Key takeaways:
- Create a budget using tools like the 50/30/20 rule and automate savings to stay consistent and avoid overspending.
- Leverage cashback credit cards, promo codes, and government schemes like CPF top-ups and housing grants to save more effectively.
- Explore side gigs like tutoring or freelancing and invest in fixed-income options or CPFIS for long-term growth.
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