Singapore markets closed
  • Straits Times Index

    -6.15 (-0.19%)
  • Nikkei

    -329.83 (-0.85%)
  • Hang Seng

    -39.35 (-0.20%)
  • FTSE 100

    -43.32 (-0.51%)
  • Bitcoin USD

    -1,132.98 (-1.60%)
  • CMC Crypto 200

    -57.75 (-3.78%)
  • S&P 500

    +13.28 (+0.25%)
  • Dow

    +66.22 (+0.17%)
  • Nasdaq

    +37.75 (+0.22%)
  • Gold

    -5.60 (-0.23%)
  • Crude Oil

    -1.22 (-1.55%)
  • 10-Yr Bond

    -0.0230 (-0.52%)
  • FTSE Bursa Malaysia

    -5.41 (-0.33%)
  • Jakarta Composite Index

    +47.23 (+0.66%)
  • PSE Index

    -26.44 (-0.40%)

Why Most Singaporeans Are in Debt

The current starting median pay for polytechnic graduates is $2,000, while for University graduates it is about $2,700. The median salary per month for Singaporeans in 2011 is $2,710. I really wonder how Singaporeans can stay out of debt if they continue to spend.

An example of a typical Singaporean couple

Take for example a Singaporean couple who falls in love and decide to settle down. The man is in his thirties and woman in her twenties. They have a combined income of about $8,000. The man buys a proposal ring that costs $7,000 (Larry’s brand as girlfriend likes it). The couple also buy a pair of engagement rings that costs $6,000 (Cartier due to peer pressure). The wedding photo package costs $6,000, wedding dinner costs $7,000, honeymoon to Korea $3,000. They then decide to apply for a DBSS flat after countless tries with HDB’s BTO without success and have to cough up $350,000 (by taking up an HDB loan and wiping out their CPF and savings). They then spend $20,000 on minor renovation and furniture.

The man decides to upgrade his car as he could not resist the latest continental car design and coughs up $100,000 (by taking a car loan). The man likes to collect watches, saw the latest Rolex and could not resist it. He has no cash but buys it for $12,000 with an interest free 24 month installment since it is so cheap per month.


Then the man tells himself that if he loses his job, he is finished. He is stuck in a rat race and saves on food, entertainment and transport cost. He does not drive his continental car to areas with ERP and instead takes the MRT there. The wife is in the finance industry, and with many banks doing cost cutting, she is very concerned now as she realizes she has nothing much to do during office hours.

The above is a real life story.

The only way the couple could afford all that is if they belong to the high earners group, if they have financial assistance from their parents or if they are born rich. Unfortunately, they are not.

We have not even talked about Singaporeans with lower earnings.

How Singaporeans get themselves in debt

Most Singaporeans will be in debt if they do the following:

1) Earn less than what they spend
2) Have no savings
3) Lose their jobs
4) Stay in a company for too long without promotion and their company pay them pathetic bonuses
5) Spend on liabilities
6) Do not delay gratification
7) Marries somebody that likes Cartier or Larry’s
8 ) Do not invest

To avoid racking up debt and getting stuck in the rat race, don’t do any of the above!

By Kelvin Ng, who has been investing since 2007 and blogs at Personal Finance Master. Posted via, your guide on how to make more money, save smarter, invest intelligently, and enjoy your money like a pro. Click here to get our free report on what you must know about financial freedom.

Related Articles

Why Most Financial Product Purchases End Up Badly (at

How to Control Your Spending (at

The Downside of Free Financial Advice (at