If you live from pay cheque to pay cheque – the way Clara How does – but your friends are buy­ing homes, putting aside cash for re­tire­ment, and just gen­er­ally adult­ing, read on. She’s on a mis­sion to change her spend­ing habits so she can put more pen­nies i

Herworld (Singapore) - - CONTENTS -

A writer who lives from pay cheque to pay cheque asks why it’s so hard to save money.

Eva* doesn’t know how much she spends every month. Or if she’s busted her bud­get. Or how much she’s got in her spend­ing ac­count. She de­pends on her bank state­ment to tell her. Out of the $3,600 salary she takes home every month, she reck­ons she saves $200$500 – but that fig­ure is down to chance rather than an ac­tive de­sire to save. Eva ad­mits she’s got “bad spend­ing habits” – she takes hol­i­days every two months, and loves to shop. “When­ever I’m bored or wait­ing for some­one, I kill time by shop­ping,” she con­fesses. “This ap­plies to on­line shop­ping too. It doesn’t help that I like lux­ury goods.”

I wish I could say that Eva’s at­ti­tude is for­eign to me. But even as I’m writ­ing this story, I’m buy­ing my­self a new Fit­bit. Do I need a Fit­bit? Not re­ally. So why have I bought one? Be­cause it’s pretty. And I work out, don’t I? So I’ll to­tally use it, which means it’s an in­vest­ment. This thought process sums up my at­ti­tude to­wards money.

The peren­nial prob­lem of sav­ing has never been more real. Just a lit­tle over a decade ago, when we wanted to shop, we had to go to an ac­tual shop and browse the racks. When we wanted to go on holiday, we vis­ited a travel agent to ar­range flights for us (gasp). To­day, on­line shop­ping makes it quick and easy to get stuff we like. Plus, credit cards, Pay­wave, and Ap­ple Pay all help dull the guilt that comes with reck­less spend­ing. “When it’s not tan­gi­ble, it feels like we’re part­ing with noth­ing to get some­thing we like,” says Tan Huey Min, gen­eral man­ager of Credit Coun­selling Sin­ga­pore. The point is, if I can barely keep track of my spend­ing, how do I even start sav­ing?

My ap­proach to sav­ing is that it’s a work in progress. At 30, and af­ter re­al­is­ing that my friends are in way bet­ter fi­nan­cial state than I am (able to af­ford their own homes, and in pos­ses­sion of sub­stan­tial nest eggs), this Peter Pan re­alised she had bet­ter get down to adult­ing. That means be­ing fi­nan­cially re­spon­si­ble. So I try to take charge: I start track­ing my ex­penses. I ask a good friend – Paul Wong of the Ad­vi­sors Al­liance Group – to take me on. I get my in­sur­ance sorted. I ac­tively try to start sav­ing. I know full well the im­por­tance of get­ting my act to­gether, but when I’m look­ing at how much I’m sav­ing (barely 10 per cent in a good month), I know that it’s not enough. Es­pe­cially con­sid­er­ing I’m still sin­gle and liv­ing with my par­ents, which means I don’t have to pay a mort­gage, and most of the bills are taken care of.


But I’m not alone in my strug­gles to put the pen­nies in my prover­bial piggy bank. A sur­vey done by HSBC last May, which polled 18,000 peo­ple in 16 coun­tries, found that 55 per cent out of 1,007 Sin­ga­pore­ans had started ac­tively look­ing for in­for­ma­tion to make bet­ter-in­formed fi­nan­cial de­ci­sions. And that 65 per cent of Sin­ga­pore mil­len­ni­als had started cut­ting back on ex­penses to save for re­tire­ment. The good news is, Sin­ga­pore­ans are look­ing to re­tire two years ear­lier than oth­ers sur­veyed, and the fig­ures aren’t dire – but they can al­ways be bet­ter. Af­ter all, shouldn’t we all be look­ing to re­duce our spend­ing and in­crease our fi­nan­cial knowl­edge?

So I reach out to Paul to see if he can shed light on the sit­u­a­tion. “Too many short-term he­do­nis­tic dis­trac­tions and no long-term per­spec­tive on what is re­ally needed for re­tire­ment,” is his short an­swer. It’s hardly sur­pris­ing, con­sid­er­ing the plethora of In­sta­grammable cafes (where av­o­cado toast costs $15), new lip­sticks, daily Grab rides and week­end trips to Bangkok that we in­dulge in. A caveat: There is noth­ing wrong with spend­ing on any of these things. But they all add up, and if you’re not con­scious of your cash flow, you could be spend­ing $200 a month just at Star­bucks alone.

His other point about not hav­ing a long-term goal is also not an earth-shak­ing rev­e­la­tion to me. What my life will be like three decades on seems too dis­tant for me to give se­ri­ous thought to right now.

I know I want to be com­fort­able when I re­tire, but come on, don’t I have time to work my way there?

It’s ex­actly this “You can wait lah” mind­set that per­pet­u­ates the sav­ing (or lack thereof) prob­lem. When we get that pro­mo­tion or a pay rise, rather than think­ing “I can save more now”, it usu­ally ends up be­ing “I can spend more on the things that I want.” Paul chalks it up to a men­tal­ity of want­ing to treat our­selves. “In Sin­ga­pore, the ten­dency is that with greater pay comes greater stress. So we tend to spend more on ac­tiv­i­ties or ex­pe­ri­ences to un­wind, be­cause we think we’ve worked hard and we de­serve it,” he ex­plains. “Plus, we know we can spend more be­cause we know that the next pay cheque is com­ing.” Anna Haotanto, CEO and founder of fi­nan­cial advice plat­form The New Savvy, adds that social me­dia has a wider im­pact on our spend­ing than we re­alise. “Plat­forms like In­sta­gram en­cour­age peo­ple to want things. It’s as­pi­ra­tional and con­ve­nient.” In­sta­gram even has Shop Now but­tons that take you from a post to the prod­uct page. Talk about #FOMO (that’s “fear of miss­ing out” in mil­len­nial-speak).


I was re­cently on a group Skype call with my Bri­tish house­mates from univer­sity. One of them is look­ing to buy a house af­ter years of rent­ing, and was ex­cit­edly show­ing us pic­tures of po­ten­tial homes. When the con­ver­sa­tion turned to me, I told them I had no plans to move out yet. They didn’t say any­thing, but I could tell they were sur­prised that at 29, I was still liv­ing rent-free with Mum and Dad.

That’s one rea­son why we can’t save, says Paul. “Many of us don’t cul­ti­vate a gen­eral habit of sav­ing from a young age, be­cause there’s no in­her­ent need to put aside money for rent and bills un­til we are much older.” Ob­vi­ously, there are ex­cep­tions. Cassie*, 26, has been sav­ing since she was five, a habit her mother in­stilled in her. To­day, she saves 30 per cent of her in­come each month. But not ev­ery­one is like her. A large num­ber of Sin­ga­pore­ans rely on our par­ents un­til we are well past our 20s, at least for our ba­sic

needs like house­hold ex­pen­di­tures and pay­ing the mort­gage. “Money is also seen as a sen­si­tive thing to talk about in our Asian cul­ture,” com­ments Anna. We shy away from ask­ing how much things cost, or how much peo­ple earn. And be­cause many of us aren’t taught as chil­dren to be good at man­ag­ing our money, it’s harder for the habit to kick in when we be­come adults.

Un­for­tu­nately, both Paul and Anna have also no­ticed that some women still de­pend on their guys to sort out any­thing fi­nance-re­lated. “Women tend to take charge only when they have no choice, or cir­cum­stances change be­cause their part­ner has lost his job,” says Paul. While I’m still sin­gle, I do ad­mit that find­ing a fi­nan­cially savvy part­ner would be a big plus (be­cause at least one of us has to know how to di­vide up re­ceipts, right?). It’s a be­lief that needs chang­ing, stat. If we can claim own­er­ship over our bod­ies, jobs and de­ci­sions, why not our fi­nances?


The main prob­lem, Anna says, is that we see sav­ing as some­thing that we NEED to do rather than some­thing we WANT to do. When you think that way, sav­ing be­comes a chore, and we all know that no one likes those.

So what it comes down to is get­ting a wake-up call. Paul says the push fac­tors in­clude re­al­is­ing that you’re way behind all your friends in terms of get­ting your fi­nances to­gether (that’s me), reach­ing sig­nif­i­cant mile­stones in your life (buy­ing a house, get­ting mar­ried, hav­ing a child) or un­for­tu­nate cir­cum­stances that re­quire you to fork out a large sum of money (say some­one in your fam­ily needs to pay huge med­i­cal bills). It’s in these mo­ments when we re­alise that our ap­proach-tosav­ing sta­tus quo is not enough, and we need to do some­thing about it, how­ever re­luc­tantly.

But reach­ing the decision to ac­tively save is one thing; the more dif­fi­cult task is stick­ing to a plan. Temp­ta­tion to spend lurks ev­ery­where, and the thing about cut­ting ex­pen­di­tures is that it con­sti­tutes a lifestyle change. This is some­thing that Tay­lor*, 28, can re­late to. She only saves $200 a month out of a $6,000 salary, thanks to pri­ori­tis­ing ex­pen­sive salad bars for lunch, and pricey gym mem­ber­ships at con­ve­nient lo­ca­tions. “It’s hard to save and have an ac­tive social life at the same time.” When we’re ac­cus­tomed to lit­tle lux­u­ries, no one likes hav­ing to form new habits that are less com­fort­able.

“While the cat­a­lyst to change is usu­ally event-driven, we shouldn’t de­pend on ex­ter­nal fac­tors to push us to save,” says Anna. “Just as we plan for our ca­reers and per­sonal lives, we should plan our fi­nances with in­ten­tion.” She sug­gests find­ing a fi­nan­cial goal that ac­tu­ally means some­thing to you, rather than a goal you should have or that your friends are work­ing on.

Huey Min agrees. “Sav­ing is a habit, and you need pur­pose and a mo­ti­va­tion to keep up with it,” she says. So when com­ing up with a smart goal, get as spe­cific as pos­si­ble. “It’s not enough to say you want to be com­fort­able when you re­tire. What does com­fort­able mean? Does it mean you take a holiday every three months? Or that you’re okay with work­ing part-time even in your old age?”

Once you’ve got that es­tab­lished, work back­wards to fig­ure out the sums you’ll need to get there. When Anna was 21, she knew she wanted to own her own prop­erty be­fore she was 30. This dream drove her to cre­ate spread­sheets show­ing how much she needed to save to get there, and she found that be­cause the de­sire for a home was so strong, com­pro­mise didn’t feel like a drag. By the time she was 28, she handed her house keys to her par­ents, and is now a selfmade millionaire. It may seem like an

un­usual com­par­i­son, but she likens the dis­ci­pline to save to hav­ing a boyfriend. “If you love your boyfriend, it’s easy not to cheat on him,” she says. “So if you’re work­ing to­wards some­thing you re­ally want, it’ll be eas­ier not to get tempted to go off track.”


Okay, con­fes­sion time – af­ter speak­ing to Paul, Anna, and women who have strug­gled and suc­ceeded in sav­ing, I still don’t quite get my Eureka mo­ment. I haven’t been sud­denly re­formed, or in­spired to give up my $10 lunches – that wouldn’t be re­al­is­tic or sus­tain­able. What I have gained is greater aware­ness, and con­scious­ness, about where my money is go­ing and what I need to do. I’ve never had so many in­depth con­ver­sa­tions about money and my dif­fi­cul­ties, and shar­ing my woes and hear­ing other per­spec­tives makes me ask ques­tions about what I want to do with my in­come.

So con­sider me schooled. I now have more dis­cus­sions with my friends about sav­ing, and they’ve started keep­ing me on track. I’ve down­loaded the CPF app on my phone. I’ve slowly started cut­ting back on my vari­able ex­penses (one way is to space out my meet-ups with friends so I’m not eat­ing out every night).

As for a longterm fi­nan­cial goal, I’m still work­ing on iden­ti­fy­ing one that re­ally means some­thing to me. In the mean­time, I’ve started to em­ploy Paul’s rec­om­mended sav­ings rule of thumb: 40-30-20-10. This means putting 40 per cent to­wards fixed ex­penses (since I don’t have rent, this would in­clude bills like those for petrol), 30 per cent to­wards vari­able ex­penses, 20 per cent to­wards in­sur­ance, wealth man­age­ment or re­tire­ment funds, and 10 per cent to­wards an emer­gency fund.

These are baby steps, but the point is to set your­self achiev­able tar­gets that you know you can hit. My pre­vi­ous in­er­tia was down to me think­ing that fi­nance was this big, scary monster that was too com­plex to un­der­stand. And if some­one else – my par­ents or a fi­nan­cial ad­viser – could help me deal with it, all the bet­ter. But look­ing at this now with a fresh per­spec­tive, that idea seems ridicu­lous. If other peo­ple have slain this monster, why can’t I? If I pride my­self on be­ing in­de­pen­dent, hav­ing con­trol over my ca­reer, and de­mand­ing gen­der equal­ity, the least I can do is re­mem­ber where my last $10 went to. And if you must know, it went to sup­per at a ko­pi­tiam.

*Names have been changed.

If I don’t start sort­ing out my fi­nances, I’m re­ally gonna be in the dog­house.

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