How To Manage Your Money in a Cashless Singapore

17 Nov 2017 

If you watched this year’s National Day Rally,  you probably know one of the most talked-about highlights of Prime Minister Lee Hsien Loong’s speech was his call for Singapore to go cashless.

Feeling a little lost with all this tal​k about “Smart Nation” and “cashless society”? Here’s a quick refresher on what happened: 

What Happened?
PM Lee highlighted certain key areas Singapore should work on in his annual National Day message. One of them is transitioning into a cashless society and using technology to create jobs and opportunities.

​What’s next?

In just over a month, businesses including hawker centres  have heeded the call and have started to adopt   QR code payments!


Industry players, including Piruze Sabuncu, Head of Southeast Asia and Hong Kong at US e-payments giant Stripe, have expressed their support, believing that a cashless model is the way to a more efficient Singapore. Without having to manually track our expenditures, budgeting can potentially be a lot more seamless and quick. From a broader perspective, Singaporeans can also benefit through the creation of jobs in the rapidly growing fintech industry.


It seems like we could be  heading quickly towards this new direction  but the question is — are Singaporeans  ready for it? 


Initial reactions have been mixed with 48% of Singaporeans polled supporting this shift


One of the common reasons cited against it is that it eliminates the ritual of checking if you have enough physical cash before making payment, potentially leading to less thoughtful and considered spending. 

YES 933 DJ Lim Peifen sums it up perfectly in this insightful Facebook post: “It was important for me to see the notes and coins, to count them every day, because the physical presence of cash reminded me of how much or how little I actually had.


To curb the risk of overspending, financial literacy is more important than ever now. It is critical to learn how to manage your wealth, especially for children growing up in a cashless society. It may seem like a trivial skill for young people — after all, how much would an extra ice cream sundae or a toy really affect your finances? However, it all adds up and if we’re not careful, we might just end up spending beyond our means.


So to get you ready in the event Singapore evolves into a Smart Nation, here are three tips for managing your cash in a cashless society:

​1.  Try Reverse Budgeting

There are a few commonly suggested budgeting techniques but one that is well-suited to a cashless lifestyle is reverse budgeting. This involves allocating your monthly income towards different functions or financial goals once you get your salary.

25-year-old marketing executive Jolene Ng swears by this budgeting method. “I always start by asking myself: what’s the amount of money I want to have in my savings by the end of the month? As much as possible, I will put that amount into my savings account when my pay comes in. To be honest, once I formed the habit, it’s quite easy to maintain and it just feels automatic now!” 

Because reverse budgeting focuses on savings instead of expenses, you are less likely to spend money you do not have. This makes it an effective method of ensuring you know and stick to your priorities, and of reducing the risk of careless spending. 


2.  Stay On Track with Technology

​Now that you’ve set aside your savings, it’s time to look at how you use the money allocated for spending. 


In a cashless society, we no longer need to ensure we have enough cold hard cash before committing to a purchase. So how do we keep ourselves in check? Do it the smart way by letting your mobile phone do the heavy lifting! There are several personal finance apps on the market that are user-friendly and widely available.


Ryan Thomas, a 24-year-old financial advisor, admits having a lack of discipline when it comes to spending. “I’m a huge foodie, so I tend to overspend on food. I used to manually take note of how much I spend by typing it out in the Notes app on my phone, but I did it very sporadically because it was quite troublesome”

Since then, Ryan has downloaded a personal financial app which now monitors his expenditure regularly. “It’s about making sure you cultivate the habit of updating it in the app. They’ve made it super simple for you to use, but at the end of the day, you need to be the one who takes initiative to use it for your own good.”

Another great use of technology is to stay informed of your CPF savings. The CPF Starter app gives you money management tips, growth projections of your CPF money to give you an idea of how much to save for your future, and even shows you how you fare against your peers in terms of building up your CPF savings.

You can also try joining relevant Facebook Groups — members exchange tips on investment and money management, keeping each other updated on the latest discounts and cost-cutting promotions. It’s a great way to be part of a like-minded community that values good financial management too.


3.  Save The Smart Way

Saving smart is more than just saving huge sums of money, it’s knowing where to put the money.


Currently, 20% of your salary goes to your monthly CPF contributions. This sum is distributed to your Ordinary Account (OA), Special Account (SA) and Medisave Account (MA).  As you grow older, the allocations shift to suit your needs at different life stages. You can find out more here.


While this is helpful in building up a rainy day fund, not many people realise the importance of saving more money in their SA. The more you have in your SA, the more you can earn from compound interest. This is how it works: ​

How To Manage Your Money in a Cashless Singapore.png

Praveen has $10,000 each in a fixed deposit, his Ordinary Account (OA), and his Special Account (SA).

At an average interest rate of 1%, the $10,000 in Praveen’s fixed deposit account would have grown to $13,478 when he turns 55. One the other hand, the same amount in his OA would have grown to $20,933 — that’s nearly twice the final amount in the fixed deposit. The largest difference can be seen in the eventual amount in his SA, which at $51,678 is nearly 4 times of his fixed deposit savings at 55.

The attractive interest rates of up to 3.5% in your OA and up to 5% in your SA (inclusive of the extra 1% interest paid on the first $60,000 of your combined balances) can go a long way in growing your savings, especially when they are compounded over the years.


Saving money regularly in your SA is much easier than you think. Simply make the cashless way of life work to your benefit by automating your top-ups with GIRO. You can easily arrange for yearly or monthly GIRO payments here.

Singapore’s evolution into a cashless society appears to be an inevitable reality. It is just a matter of time but the need for good money management forever remains a constant. 

In a cashless society where convenience is king, automation and technology is your best friend. So learn to harness their power and make it work harder for you. The key is to keep your processes as simple and seamless as possible. That way, practicing good money management in a cashless Singapore becomes effortless and easy!​


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