The Cost Of Living – Is Our Salary Really Enough?

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Singapore, has been tied with New York and ranked the world’s most expensive country to live in. With that being said, how expensive is the cost of living in Singapore? If you’re a young adult looking for a job or an expat considering moving to Singapore, you may be wondering how much is “appropriate” for someone in your age group to spend each month.

Many are considering finding a new job or taking on additional roles to keep up with the cost of living here. These findings come as inflation hits the world in the wake of multiple crises, such as COVID-19 and the conflict in Ukraine.

Singapore’s Ministry of Finance has previously issued an alert that the country is “especially susceptible to imported pricing pressures, through channels such as food and energy” due to its small and open economy. According to a Qualtrics study, 46% of Singapore-based workers indicated it is tough for them to afford their current living expenditures. This indicates that many are facing financial difficulties currently.

Core inflation in Singapore increased to 5.3% in September from 5.1% in August. The ongoing increasing trend poses a risk of reaching the record-high core inflation rate of 5.5% observed in November 2008, which was 14 years ago. With that, housing and private transportation costs such as automobile ownership, represent a significant amount of household budgets in Singapore causing it to be extremely concerning.

Family of four estimated monthly costs are 3,930$ (5,331S$) without rent. A single person estimated monthly costs are 1,082$ (1,467S$) without rent. Naturally, the answer depends much on your lifestyle and beliefs. If you ask the social climber who believes you need the fancy car and condo to prove you’ve “made it” in life, you’ll likely receive a different response than if you ask the person who is content to live with his parents at 40 and rarely leaves the house for anything other than work.

Whether you choose to rent or buy a property, your housing costs will be by far your largest outlay if you’re relocating here from another nation or a local considering leaving your parents’ house.

Housing 

If you are renting, you should set aside at least $700 to $3,500 per month, and if you are a Singaporean or Permanent Resident buying a home and are qualified to purchase HDB property, you should set aside $1,500 to $6,000 per month.

In general, for resale property you can expect to pay anywhere from about $500,000 for a 3-room HDB flat to $3,000,000 upwards for private property, with the average condo unit costing $1,300,000 and above.

Assuming you pay a minimum 15% downpayment for an HDB lat or 25% downpayment for a private home, and take out a 25-year-loan, you can expect to pay anywhere from $1,500 to $7,500 per month in loan instalments for homes within that price range.

Transportation

Your monthly transportation expenses might vary greatly, just like everything else in life, based on how far you need to travel every day and the type of transportation you use. If you’re fortunate enough to reside close to your work location and the town area, you’ll save money on transportation costs compared to someone who lives in Woodlands and must go to the CBD every day.

Moreover, purchasing a car in Singapore is not a wise decision unless you have a significant amount of extra cash available. They’re infamously costly here and cost an additional $1000 to $2,000 every month (car loan instalments, insurance, petrol, parking, and maintenance).

Depending on your lifestyle, here are some of your potential costs per month:

With the table in comparison,

• The average median income (inclusive of employer CPF contributions) in Singapore is $4,680/month ($56,160/year).

However, another important point to highlight is that about 30 per cent of working households in Singapore do not earn enough to meet this basic standard of living according to a study in 2021.

This is due to the fact that according to DOS statistics for Singapore in 2020, the average salary per household member was $1,609 for the third decile group. Thus, with rising costs in almost every category, in my opinion, the cost of living could be too exorbitant for majority of the Singaporeans to handle.

What are your thoughts on this matter?

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