Managing Cost of Living To help Singaporeans cope with cost-of-living
A more representative indicator of cost of living in Singapore is the Consumer
Previously, I shared some smart ways to manage your budget amid rising food prices.
However, food isn''t the only thing that''s gotten more costly. Everyday goods and services are becoming more expensive too – from property rentals to fuel, weekly groceries, public transport and school fees.
Case in point: I just paid S$200 to service my one-year-old air-conditioner''s four fan coil units, and it stung. According to the Goods & Services Inflation Calculator, this is about S$26 more than what I would''ve paid in 2012! Add this to other price hikes in our day-to-day life, and it''s easy to feel like it''s becoming too expensive to just live.
Inflation causes the value of money to decrease which means you can buy fewer things and services with it or you have to spend more on them, i.e. your purchasing power shrinks. A higher cost of living usually means less money left over for your savings goals and discretionary, or non-essential, spending.
Adding to cost-of-living concerns is the goods and services tax (GST) rate which inched up to 9% on 1 January 2024.
How can you stop Singapore''s rising cost of living from weighing you down?
Try my inflation hacks to cope with rising costs in Singapore, save more (yes, I kid not!) and stay on track to achieving your financial goals. (Incidentally, if you feel life is wearing you out, you might like some tips for coping with stress.)
Inflation hack #1: Grow your income as much as possible
Flexi work arrangements and the gig economy are compatible partners when it comes to boosting your income. I''m not saying you shouldn''t take your regular job seriously – in fact, it should continue to be your focus and you should still strive for that promotion or pay increase, which is one way to tackle rising cost pressures.
Don''t fret if you can''t smell a promotion or pay raise. As long as it doesn''t conflict with your day job, part-time side gigs like event hosting, food deliveries and web design in your spare time offer unlimited potential to earn extra cash. This is turn can help you offset increasing childcare fees, petrol and other costs – and maybe even keep to or exceed your monthly savings targets.
Inflation hack #2: Invest your earnings for passive income
Earning more is key to beating rising cost pressures – so is what you do with your income. After you''ve set aside your monthly budget for essentials, insurance protection and non-discretionary expenses, the general rule of thumb is to save the rest. Instead of leaving your money in a next-to-zero-interest savings account, consider investing for potentially higher returns.
Investing more of your savings could mean working fewer years to reach your retirement goal i.e. retiring earlier than planned!
Investing comes with risks as this Grow Me the Money article explains, though, so pick a product that matches your risk appetite and financial profile. For instance, Singapore Savings Bonds (SSB), insurance endowment plans, blue chips, gold, ETFs and so on, all come with different risk levels and investment periods so exercise due diligence when choosing an investment product or get expert help from a trusted financial adviser.
TIP: You don''t have to wait till you''ve accumulated a few thousand dollars to invest. With SSB, for instance, you just need a minimum of S$500 to start. Invest small amounts regularly to spread out your risks and generate a passive income stream.
Inflation hack #3: Cut your expenses
Cut out all the money suckers in your life – you know what they are! If you live in an area well served by public transport, give up your car and rent one only when you really need it. Moving to a less expensive neighbourhood or sharing your apartment with a roommate could also help reduce your costs.
Don''t forget to maximise your company''s employee benefits such as annual health check-up allowances as well as medical, hospitalisation and personal accident coverage, so you needn''t touch your own savings for things like consulting a medical specialist.
Inflation hack #4: Use water efficiently and milk discounts on utility bills
By April 2025, most households will pay S$4 to S$9 more, before GST, for their monthly water bill due to rising water costs. The good news is that middle- and lower-income households will get help from the government to cope with this.
Using water more efficiently can bring down your bill further. Here''s how:
Monthly phone, mobile data, electricity and gas bills can also add up. Evaluate your respective plans and downsize or switch to plans that better suit your usage patterns.
Another thing that works for me is bundling several services. For instance, parking your residential phone, mobile phone, internet and streaming subscriptions under a single provider could qualify you for greater discounts on your monthly bill. Loyalty saves you money!
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