Everyone can be Financially savvy

Changing the way you  pay for your expenses can add up to extra savings. Get more out of your every dollar.

While Singapore’s year-on-year inflation eased to 1.5 per cent in December, many people still worry about the cost of living. Moderate inflation is considered to be a sign that a country’s economy is healthy, as this means that there is a steady demand for goods and services. This does, however, mean that household expenditure —  which includes items such as housing costs, food, recreational activities, transportation and healthcare — has increased over the years. The most recent report on the Household Expenditure Survey, published by the Ministry of Trade and Industry’s Department of Statistics in 2009, showed that Singaporean households spent a monthly average of S$3,764. This is estimated to be about S$4,358 today based on an average inflation rate of about 3.1 per cent per year from 2009 to 2013, also according to figures released by the Department of Statistics.

PLAN EARLY, PLAN AHEAD

Keeping these increasing costs in mind, it is important to start saving early. Most financial experts suggest putting aside at least 10 per cent of your gross monthly income.  

At the same time, your total debt re-payments, which include personal, education, car and housing loans, should not be more than 35 per cent of your monthly salary, according to MoneySENSE. While it may sound tough, saving money does not have to be a painful task. 

One way you can stretch your dollar is to cut down on unnecessary expenses like frequent restaurant meals or splurging on expensive items.

This is the 14th story in a 19-part collaboration between TODAY and POSB