You might actually be surprised just where you stand on the island.
Text by Penny Hsieh
A recent study from Manulife Singapore will give you a nice peek into what you’re doing right with your money, and how you could be doing even better.
How much do we save anyway?
A survey conducted with middle to high income earners in Singapore above the age of 25 revealed that 97 per cent of these Singaporeans saved part of their income, with a majority saving between 30 per cent to up to 49 per cent of their salary. Males tend to set themselves higher savings targets with one in four expecting to save at least S$500,000 within a short to medium time frame, compared to females whosemedian was closer to S$180,000. Savings ambitions also grow with age, with people under 35 targeting to save up to S$50,000.
What are we saving for?
Out of their savings, 14 per cent goes towards retirement and 14 per cent to our emergency fund which definitely helps with future plans. That said, a good third of savings is not allocated to any purpose. Now is that a good or a bad thing? I won’t turn you off with a quote but many clever and successful people have said that having a purpose drives them forward, so if it’s good enough for life, it’s good enough for my bank account! Seriously though, it’ll help to keep you on the path of wealth generation so you’re less likely to slip up when you’ve had a hard day and a nice pair of shoes feels like just what you need.
Is there a right or wrong way to save?
Not really. But there is a way to save that makes your money work harder for you, but you will have to sign a couple of papers and keep an eye on your investments as you accumulate them. Two out of three Singaporeans surveyed regret that they didn’t plan their investments better, particularly their lack of proactivity in reviewing their portfolio and holding too much money in cash. Let’s try and improve that statistic, shall we?
Is this enough?
It really depends on what you’re saving for (hello again purpose!). Only slightly more than half of respondents set short to medium term savings targets and while we are great budget planners, many of us still carry quite a bit of debt. So once you’ve identified what you’re saving for it’s important to set a target with a timeframe and of course, minimise debt so you don’t just keep cancelling yourself out. Don’t join the current majority in regretting missed opportunities to make better choices in investment planning.
What more can be done?
Have an accurate view of what you’re saving for, how much it will cost you realistically and then work on the best financial products that will help you meet your appetite and goals. Keep at it and start early compounding interest is a magical thing so work out your sums, or better yet, get a professional financial advisor to help you get it done.