man taking money from wallet

There is no standard parameter that is established to be able to give a definite answer on how much individuals in Singapore save on a daily, monthly or even annual basis. Therefore, the answer will not be as straightforward as you could have liked. Even if people in an economy are earning the same amount of money in a given time, say $X, in an ideal economy, there are other factors such as debts, family, utilities, hobbies, charities, etc. These factors differ from an individual to the next. As long as the expenses in this ideal economy are not uniform, the amount of savings cannot align with every individual.

In a real econometric model, different jobs attract different remunerations. Also, there are services, talents, and skills. These factors differ in degree from one person to another, just like their expenses. This, therefore, implies that there is no way to know how much individuals in an economy are even as developed as Singapore’s.

How much should you have saved at any point in your life?

Financial consultants advise that, on average, you should have savings worth half a year of your monthly income. For example, say at 30 years, you should have savings equal to your total revenue for the last six months. And, this should be on a bare minimum. Your maximum savings are not capped.

From the above suggestions: if you earn a salary of $5,000, then your annual earnings shall be $60,000. This means that at any point in time, you should have at least 50% of this revenue. This will act like a reimbursement account such that whenever the balances go down, you make sure they don’t lower past a specific limit.

Furthermore, it is a common practice among a few people to redirect excess amounts in investments or retirement. Savings tend to be temporary and liquid. Which means you can access this amount anytime you need it. Savings are used mostly in emergencies, expensive financing goods, or as a precautionary measure. For long term savings, consider investments.

Statistics, however, indicated that just half of the entire Singaporean population has 50% savings. Again, this may be due to disparities in individual lifestyles people lead. Ideally, this percentage should be a little higher. But, since lower earnings can go just long enough to ensure your survival, savings remain a luxury for those with a surplus.

The financial discipline in saving

You should de-bunk that myth that saving involves eating less, buying less, or settling for alternative qualities. In fact, savings should come before budgeting. If your goal is to reach the 50% target, then you can by slowly depositing a particular percentage of your income to your savings account. The rest of the money will after that be used to make a budget. Do not always budget first and save later. Contrarily, you should save first then budget with the remaining cash later.

To buy more, earn more

One of the most widespread challenges about spending is that the costs tend to eat into the savings. If you have something you need to buy and you have less cash, you should consider other methods of purchasing, such as hire purchase. However, to prevent eating into your savings, consider earning more. You can enhance your earnings by getting another job, improving your skills so that you upgrade your position at work, or offer freelancing services for pay.

Are you limited to savings?

If you are wondering whether there is a limited percentage of savings, one is allowed to have you were misled. There are no legal or financial constraints when it comes to personal decisions on spending and savings. It is just common sense that guides you through it. You can save as much as you possibly can. However, as earlier discussed, it would serve good if you invested the surplus amount in liquidated stock or retirement benefits. All these are for your protection in the future. As they say, the best way to save is to invest.

Additionally, savings are not dependent on the age of an individual. Of course, young people tend to earn less and have many responsibilities such as debts, housing, young family, and studies. Their financial obligations are over the roof. In the same sense, older folks tend to have stashed away a significant amount of money for themselves and their families.

However, you can start to save at any age. Even at 50 years, one is still viable to keep. So, do not panic about how your peers have begun stabilizing their savings accounts while you are on the backseat.

In a country like Singapore, where the per capita income ranks the best in Asia; Individuals should be able to save more due to lower dependency ratio. So, considering this factor, you should be able to save a whole lot more than the average being proposed here. A lot needs to be done to sensitize the masses about the importance of savings.

When are savings “too much”?

Savings become “too much” when you accumulate cash. Usually, the money market responds to shortages and excesses in money flow in the economy. If you keep away too much cash in terms of savings, you are reducing the amount of supply. This may create a demand for money that will likely topple the equilibrium. Which means the prices of commodities in the economy will be affected.

Another angle is inflation. Return on cash does not keep up with inflation. That means keeping $1000 in savings now will have lesser value in the next three months than it has now. Therefore, about too many savings; as discussed above, there is no such thing as too many savings. However, there are too many cash savings.

The most prudent way to save if not for emergencies is investing. This will not only maintain value for money, but it will also increase its amount.

The bottom line

A good savings system is independent of the budget and expenses. Also, while saving, ensure that you have at least six months of your annual income in savings. Holding cash is not beneficial. If you cannot deposit in your bank account as a multiplier, then seek that multiplier in investments. In case you need to borrow, always go to a licensed money lender for security purposes and better terms.


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