Singapore workers: More spenders than savers

Singapore workers: More spenders than savers
PHOTO: Singapore workers: More spenders than savers

SINGAPORE - Customer proposition associate Jonathan Jie is a good role model for thriftiness.

The 25-year-old, who works in the retail banking and wealth management department of HSBC, takes home $2,000 to $3,000 a month, but manages to save close to half of his salary.

The bachelor, who is living with his parents who are still working, said: "I don't see a rush to get married, especially with the increased cost of living. I hope to become more financially stable before I settle down."

He said he spends more of his money on food and taking public transport to and from work.

He added that he spends only $200 to $300 a month on entertainment, such as going to pubs and watching movies with friends and colleagues.

He is among a minority group of working adults who regularly save more than one fifth of their monthly income.

According to an online survey conducted from September to October last year by Jobs Central, less than 40 per cent of Singapore workers regularly save over 20 per cent of their monthly income.

Alarmingly, it was reported that about 55.5 per cent of workers save less than 20 per cent of their monthly income, while another 5.2 per cent do not save at all.

A total of 3,299 respondents across different levels of occupation and industries took part in the survey. For the survey, 20 per cent was set as the benchmark of good savings habits.

The majority of workers spend the bulk of their salary on necessities like food and transport, and on allowances for parents or children.

About 23.6 per cent said that they would spend the bulk of their salary on entertainment, while 15.1 per cent said they would spend the majority of their salary on travel.

Mr Tim Chew, 26, a full-time bartender, typifies the Singapore spender.

"My salary isn't much - a maximum of $2,200, depending on the hours I work - and I don't manage to save much either," he said.

He lives with his parents who are retired and helps out with the household bills.

He admitted: "I'm a bit of a party guy, so I spend more - about half of my salary - on entertainment like clubbing and partying on my days off.

"Unfortunately, I'm also a heavy smoker, so quite a chunk of my salary goes to paying for my cigarettes.

"The rest would be spent on food and public transport. I also give my parents a little bit of my salary for their expenses. After everything is said and done, I'm probably left with about $200 or $300 per month."

Thankfully, Jobs Central says there is an observable improvement in thriftiness habits.

One quarter of those surveyed (25.5 per cent) said they would save 21 per cent to 40 per cent of their salary, up from 19.7 per cent in 2011.

Ms Michelle Lim, chief operating officer of Jobs Central Group, said: "While it is encouraging to see that most people do have some savings from their monthly income, it looks like many have low savings rates.

"For those relying on their Central Provident Fund for retirement, they may find that it is often insufficient and needs supplementing from personal savings or income from investments."

Contrary to popular belief that young workers spend more than they save, the survey shows that those between the ages of 21 and 30 have better savings habits than their older peers.

About 46 per cent indicated they save more than 20 per cent of their income. This is almost double that of those in the 41- to 50-year age bracket, in which only one quarter of workers did so.

"Surprisingly, the results dash common perceptions that the Gen-Y group spends more than they save," Ms Lim said.

"Perhaps older workers have more financial responsibilities like mortgage and car payments, plus supporting a family, thus resulting in a lower percentage of income saved."

Respondents who earn $7,000 to $7,999 per month are most likely to save over 20 per cent of their salary (61.5 per cent).

The survey also shows that those employed in real-estate services appear to spend more, with just one third (29.9 per cent) indicating that they would save more than 20 per cent of their monthly income.

Comparatively, workers employed in public administration and defence services are good savers. Over half of those surveyed (54.9 per cent) said they would save more than 20 per cent of their income.

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