Wednesday, November 14, 2012

More than 100,000 Singaporeans earn less than $1,000 per month

It was reported in a recent Straits Times article that more than 100,000 Singaporeans earn less than $1,000 per month. When I read this, I am quite surprised as it seems to many that Singapore is a prosperous and wealthy nation with approximately 400,000 Singaporeans having a net worth of US $1 million in liquidity excluding property.

In our Singapore society where prices of everything are rising, it is hard to fathom how an average Singaporean can survive with just $1,000 in taking-home each month, especially if the earner has a family to feed. However, I believe while it may be hard to survive with $1,000 a month, it is possible: it is a matter of how one manages his money and scales down his expectation.

For someone earning $1,000 a month, probably he has to lower expectations of meals, e.g. he may not be able to indulge in too frequent a restaurant meal while having bills and loans to pay. He may also need to spend monies on his needs rather than wants like having a holiday overseas, buying branded goods and clothing, reduce consumption of electricity, gas and water and may even need some subsidies (e.g. cash and food voucher). This will result in not much savings.

On the other hand, even when someone earns $10,000 per month but spends his money unwisely such that his monthly expenditure is close to or over $10,000, in actual fact his overall savings and financial status may be close to someone who can only save a little with an earnings of $1,000 per month.

Savings and good investments are keys to beating the high inflation rates in Singapore these days.

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