Discretionary spending: People walk along the river next to the financial business district in Singapore. A survey reveals shifting priorities as young adults in the city-state balance lifestyle aspirations with inflation, property ambitions and global volatility. — AFP
SINAGPORE: Rennes Lee considers a S$40,000 home renovation a “splurge”, even though those around her tell her it is not.
Lee, 30, renovated her four-room build-to-order (BTO) flat in July. She said the money went towards interior design and renovation, as well as buying electrical appliances and furniture for her flat.
This amount is considered relatively small for home renovation, said the full-time senior brand manager.
But to her, it is an extravagance to spend more than S$10,000 on it.
“Although my renovation is considered affordable by many, it is still something that my husband and I consider a splurge because there are ways to get individual contractors to do the renovation at a lower cost,” she said.
“However, between balancing work and renovation, we realised that the renovation required a lot of operational availability (being present on site and following up with multiple vendors), so it did not make sense for us to handle that on our own.”
Apart from her home renovation costs, Lee’s typical monthly expenditure of about S$2,000 is not an unusual amount for full-time employees, according to a survey of around 1,000 young people aged 18 to 30 commissioned by The Straits Times and carried out by market research firm Kantar in May.
It is also comparable to the average monthly household expenditure per household member of S$1,986 in 2023, according to the latest government data.
On average, a young adult spends about S$1,486 a month, but a full-time employee tends to spend more.
Lee Ci En, 28, an advertising strategist, spends about S$1,000 to S$1,200 a month, including bills and transport.
He estimates this amount to be less than or equal to the monthly expenditure of his peers who also work full time.
“In general, it seems like most of us are tightening our belts and spending less,” he said.
This might be a trend because of the uncertain macroeconomic environment, with global volatility around tariffs and geopolitical tensions.
“I see myself spending about the same amount in the future as the cost of living is high and because of the macroeconomic conditions. Maybe I should consider how I can spend even less.”
He added that he wants to invest and save up to buy a condominium unit.
“Eating out at a fancy restaurant that costs around S$100 per head with drinks is a splurge,” he said.
“I find that a splurge because you can get a lot more and way better food overseas for the same amount or less.”
He ranks transport, food and insurance as his top expenditure categories. In general, he said he eats mainly at hawker centres and coffee shops, and occasionally at cafes and restaurants.
His greatest splurge in the previous year was a vacation in Japan that cost him around S$2,500 to S$3,000.
Meanwhile, Syrius Liu, 31, spends about S$2,500 a month. The freelance life coach said her top expenses are insurance – including an investment plan – an allowance to her parents and education, such as courses, self-development programmes and lessons for hobbies like singing.
In line with these priorities, she splurged on a graduate diploma, which cost about S$4,000.
Meanwhile, she also considers it a splurge to pay more than S$100 for a meal.
“I don’t usually splurge as I budget amounts for the different categories of spending per year. In general, if I spend above budget, it is considered a splurge,” she said.
She also aims to spend less, as she wants to save up for her wedding and renovation costs associated with home ownership in the next one to three years. She expects to spend around S$40,000 on these, she said.
“The saved money will be invested to maximise returns,” she said.
At the other end of the spectrum is associate director Danish Danial Tay, 31, who works in the financial services sector.
His monthly expenses come up to S$10,000 because he has to pay monthly instalments for a car, parking fees, road tax, insurance and petrol.
His other categories of big expenses include insurance and investment plans, such as protection and accumulation policies, and family expenses – his allowance to his parents and his home bills.
“I think I am spending more than peers my age because of my car, business expenses and lifestyle,” said Tay, who declined to reveal what proportion of his income he is spending.
He hopes to keep the amount he spends consistent while increasing his income through his work. His immediate financial goal is to save and invest in order to buy his own property.
To him, a splurge is buying branded clothes or accessories that cost more than S$200 a piece.
Muhamad Iskandar, 28, a cyber-security engineer, earns about S$4,500 a month before Central Provident Fund deductions.
“For me, anything above S$200 for a single item is a splurge,” he said. “Most recently, I spend that amount on a flight ticket to Sabah, Malaysia, for a trip with my friends.”
Each month, he gives his wife S$500 and his parents S$400 in allowances.
He spends about S$150 on fuel and maintenance for his motorbike, and S$50 on his phone bill and subscriptions, as well as S$100 on insurance.
Iskandar also budgets about S$700 a month on eating out and around S$400 on groceries. He sets aside another S$200 for miscellaneous expenses, such as occasional car rentals or online purchases.
The rest goes into a high-interest savings account for his emergency fund and the renovation of his upcoming BTO flat.
Full-time workers get financial advice from a variety of sources, ranging from their peers to books and online resources.
Lee said she learnt from people in the finance industry when she started working in the sector in her 20s.
She added that she uses CompareFirst, a comparison website for insurance that is a collaborative effort by the Consumers Association of Singapore, the Monetary Authority of Singapore (MAS), the Life Insurance Association Singapore and MoneySense.
“Do not spend more than 10%t to 15% of your annual salary on insurance premiums. Do your own research, find out what is in the market and think with your mind, not your heart.”
Liu follows The Woke Salaryman on Instagram, run by co-founders He Ruiming and Goh Wei Choon. Their account provides tips via comics on how to be financially savvy.
Liu also gets newsletter updates from investment platform Syfe. — The Straits Times/ANN
