Overcoming money worries in Singapore

[SINGAPORE] As Singaporeans grapple with escalating living costs, many are seeking effective ways to manage financial anxiety. Experts suggest a multifaceted approach, combining budgeting, emotional regulation, and seeking professional advice, to navigate these challenging times.

Recent data from the Department of Statistics Singapore (SingStat) highlights that core inflation rose by 3.1% year-on-year in early 2024, driven by higher costs in transportation, food, and healthcare. This upward trend has intensified financial pressures, particularly among middle- and lower-income households. Against this backdrop, adopting proactive financial management strategies becomes even more critical.

Financial anxiety, often stemming from concerns about income stability, rising expenses, and future uncertainties, is prevalent among Singaporeans. This anxiety can manifest as stress, avoidance behaviors, or even physical symptoms. Recognizing and addressing these feelings is crucial for mental and financial well-being.

A 2023 survey by the Institute of Mental Health revealed that nearly 40% of Singaporeans reported moderate to high levels of financial stress, with younger adults (aged 21-35) being particularly affected. The study also noted a correlation between financial anxiety and reduced productivity at work, underscoring the broader societal impact of this issue.

Establish a Realistic Budget: Creating a budget is fundamental in managing finances. The 50/30/20 rule is a widely recommended framework:This structure helps individuals prioritize essential expenses while ensuring savings and responsible spending. Regularly reviewing and adjusting the budget can accommodate changing circumstances and prevent overspending.

• 50% for necessities (e.g., housing, utilities, groceries)
• 30% for discretionary spending (e.g., dining out, entertainment)
• 20% for savings and debt repayment

For those struggling to stick to a budget, digital tools like budgeting apps (e.g., Seedly or Wallet by BudgetBakers) can provide real-time tracking and alerts. These platforms sync with bank accounts to categorize expenses automatically, making it easier to identify spending patterns and adjust habits accordingly.

Build an Emergency Fund: An emergency fund acts as a financial safety net, providing peace of mind during unforeseen events such as medical emergencies or job loss. Financial advisors recommend setting aside at least three to six months' worth of living expenses. This fund should be kept in a separate, easily accessible account to ensure liquidity when needed.

Address High-Interest Debts Promptly: High-interest debts, particularly from credit cards and personal loans, can quickly accumulate and exacerbate financial stress. Prioritizing the repayment of these debts is essential. Once cleared, redirecting those funds towards savings or investments can improve financial stability.

The Monetary Authority of Singapore (MAS) has cautioned against rising household debt levels, which reached 70% of GDP in 2023. To combat this, MAS has tightened lending criteria for unsecured loans, urging consumers to exercise caution and explore debt consolidation plans if necessary.

Seek Professional Financial Advice: Consulting with a certified financial planner can provide personalized strategies tailored to individual circumstances. These professionals can assist in creating comprehensive financial plans, optimizing investments, and navigating complex financial decisions. In Singapore, resources like MoneySense offer guidance and tools to enhance financial literacy.

Cultivate a Positive Money Mindset: Emotional regulation plays a significant role in financial well-being. Practices such as cognitive behavioral techniques can help individuals challenge negative thought patterns related to money. Additionally, surrounding oneself with supportive communities and limiting exposure to stress-inducing financial content on social media can foster a healthier relationship with money.

Leverage Government and Employer Support: Singaporeans can benefit from various government initiatives aimed at easing financial burdens. Programs like MediShield Life and CareShield Life provide healthcare and long-term care coverage. Employers may also offer benefits such as health insurance and financial wellness programs. Staying informed about these resources can provide additional support during challenging times.

In response to growing financial stress, community initiatives like free financial literacy workshops and peer support groups have gained traction. Organizations such as the National Council of Social Service (NCSS) have partnered with grassroots leaders to host these sessions, empowering residents with practical skills and a sense of solidarity.