It takes years of diligence to develop a good habit, which also means it takes the same amount of effort trying to get rid of one. Growing up in a sheltered and comfortable environment, many Singaporeans are unable to separate needs from wants. And many have developed unrealistically high expectation of their standard of living, this eventually causes a strain on their salaries and as a result, many go into debt woes and cashflow problems.
With Singapore home to one of the largest populations of millionaires, in proportion to our population, we see many middle class Singaporeans try to emulate the high standards of living that they think they can afford and that they are worth. As many of us develop our version of how we should live and what our priorities are, we are unknowingly seeding bad financial habits that, over time, will enslave us to our jobs and the rat race.
Here are 3 bad habits that some of us may be constantly struggling with, sometimes at the expense of our health and family's financial security.
Singaporeans will scrimp and save for a holiday yearly
For some reason it has become some unspoken rule that it is a must to go on a yearly vacation. We have nothing against vacations, we love going on vacations too. We're sure you've probably come across colleagues or friends who are eat less or try their best to scrimp and save every cent just so they can save enough to go on the vacation they planned. However, as much as such trips prove to be beneficial for our mental well-being in the short-term, some of us may be over extending our finances to keep up with our friends' and families' lifestyles. And in the long-term, we will actually suffer great mental burdens looking at our debts and our bills each month.
It is always recommended to decide your vacation after doing your annual budget, so you can see what you can fit in. Spending within your budget without having to make any changes to your spendings on necessity is always encouraged, given that going on vacation is never a need. It has always been a want. A simple vacation to the beaches of sentosa or hiking Bukit Timah is not a fancy story you will be able to tell your friends, but we're sure many of you have not done it and it will be an eye-opening and relaxing experience nonetheless.
We also understand the lure of carrying Prada wallets and wearing Jimmy Choos. The whole experience of shopping for one and making the purchase and then posting a picture on it on social media will get so much more likes and comments and attention than your current knock off you bought from a night market in Bangkok. More Singaporeans are falling into the trap of buying on impulse, being sorry after, and landing themselves in debt after overspending on branded-goods that they cannot afford on their current incomes. We always say, it's better to carry a cheap wallet/ handbag filled with cash than to carry an expensive wallet/ handbag without any cash.
It's in Singaporeans' nature to be competitive. Most Singaporeans would pay more attention to a get-rich-quick scheme than to spend hours learning the ropes of prudent investing. We all want to be rich tomorrow, but all of us know this is impossible. So it's puzzling to come across people who have invested in schemes that are too good to be true. As a rule of thumb, we always tell people, if it seems too good to be true, it probably is, stay away. Some ways to spot these investments include being tempted by the show of wealth from the person/ company selling you the investment products or a friend who might have benefitted from the system and is now wearing an expensive watch and driving a car. Sometimes, when we are shown these "facts" (which have been planted to lure people like us) we think we must not lose out on this " golden" investment opportunity. And many times, this lead to our downfall.