Why Most Singaporeans Are in Debt

[Musicwhiz]

Why Most Singaporeans Are in Debt

June 25, 2012

in Saving money

The current starting median pay for polytechnic graduates is $2,000, while for University graduates it is about $2,700. The median salary per month for Singaporeans in 2011 is $2,710. I really wonder how Singaporeans can stay out of debt if they continue to spend.

An example of a typical Singaporean couple

Take for example a Singaporean couple who falls in love and decide to settle down. The man is in his thirties and woman in her twenties. They have a combined income of about $8,000. The man buys a proposal ring that costs $7,000 (Larry’s brand as girlfriend likes it). The couple also buy a pair of engagement rings that costs $6,000 (Cartier due to peer pressure). The wedding photo package costs $6,000, wedding dinner costs $7,000, honeymoon to Korea $3,000. They then decide to apply for a DBSS flat after countless tries with HDB’s BTO without success and have to cough up $350,000 (by taking up an HDB loan and wiping out their CPF and savings). They then spend $20,000 on minor renovation and furniture.

The man decides to upgrade his car as he could not resist the latest continental car design and coughs up $100,000 (by taking a car loan). The man likes to collect watches, saw the latest Rolex and could not resist it. He has no cash but buys it for $12,000 with an interest free 24 month installment since it is so cheap per month.

Then the man tells himself that if he loses his job, he is finished. He is stuck in a rat race and saves on food, entertainment and transport cost. He does not drive his continental car to areas with ERP and instead takes the MRT there. The wife is in the finance industry, and with many banks doing cost cutting, she is very concerned now as she realizes she has nothing much to do during office hours.

The above is a real life story.

For the rest of the article, please visit the link below:-

http://moneymatters.sg/why-most-singapor...e-in-debt/

[arthur]

Take for example a Singaporean couple who falls in love and decide to settle down. The man is in his thirties and woman in her twenties. They have a combined income of about $8,000. The man buys a proposal ring that costs $7,000 (Larry’s brand as girlfriend likes it). The couple also buy a pair of engagement rings that costs $6,000 (Cartier due to peer pressure). The wedding photo package costs $6,000, wedding dinner costs $7,000, honeymoon to Korea $3,000. They then decide to apply for a DBSS flat after countless tries with HDB’s BTO without success and have to cough up $350,000 (by taking up an HDB loan and wiping out their CPF and savings). They then spend $20,000 on minor renovation and furniture.

The man decides to upgrade his car as he could not resist the latest continental car design and coughs up $100,000 (by taking a car loan). The man likes to collect watches, saw the latest Rolex and could not resist it. He has no cash but buys it for $12,000 with an interest free 24 month installment since it is so cheap per month.

Then the man tells himself that if he loses his job, he is finished. He is stuck in a rat race and saves on food, entertainment and transport cost. He does not drive his continental car to areas with ERP and instead takes the MRT there. The wife is in the finance industry, and with many banks doing cost cutting, she is very concerned now as she realizes she has nothing much to do during office hours.

Seriously, this young man has only himself to be blamed for such a spending habit. Combined income $8000 is not alot these days.

I like Patek Philippe, Steinway & Aston Martin, but I am not rushing out to get them.
If they do not have rich parents or inheritances at hand, there's no need to show off their status to others.

No big heads dun wear so big hats.. as the saying goes.

The implications of such a spending attitude is a divorce, bcos improper financial planning.
If a person is matured enough to get married, he/she should be matured enough to know financial planning. Likewise choice of partner is important. A partner who only wants to have a good life, or wants to pry open your bank acct to know your wealth worth beforehand is a danger sign of how she/he would be in future.

As a man, I am only concerned about building up my career in a niche market and expand my contacts as widely as possible. When its time to enjoy, enjoy the fruits then.

[Musicwhiz]

Granted, the article was a little exaggerated and some of the numbers don't seem quite accurate. But the crux of the issue is - spending more than you earn; and not being prudent in financial planning.

I agree with Arthur - if you want to get married, make sure you are emotionally and financially mature; otherwise you'd end up with a wreck of a marriage and debts to boot!

I'm not sure if most Singaporean couples are like this; I know of some friends who have maids, cars, condos; and some owning two properties (hence, two mortgages), but I am not sure if they can be considered "over-spending".