Younger S'poreans financially prudent
Younger adults here are not really impulsive spenders and likely to spend within their means, but a substantial number will buy stuff that makes them happy without worrying about the future, according to a survey.
Overall, the respondents demonstrated prudence in their financial behaviours and keep within their means for day-to-day expenses. They are also unlikely to take out loans or use credit on impulse, the joint survey by the Institute of Policy Studies (IPS) and CNA noted.
The majority (88.8 per cent) said they spend within their income every month. Almost half indicated food as one of their top two expenditures (46.2 per cent), followed by loan payments (25.5 per cent), clothes and footwear (18.9 per cent), and allowance for children, parents or other dependants (17.4 per cent).
More than nine in 10 have felt personally affected by the rising cost of living, with higher-income earners less affected. The top two ways to cope are keeping to a fixed budget and deferring purchases until prices become affordable.
Higher-income earners are also more likely to use credit cards to cope with rising costs, while lower-income earners are more likely to defer purchases.
Nearly nine in 10 respondents would cut down on spending if they notice they are spending beyond their means. But six in 10 said they prefer to spend on things that make them happy and not worry about the future.
The survey on the financial behaviours of younger Singapore residents was done by IPS researchers Dr Teo Kay Key, Dr Mathew Mathews and Ms Samantha Nah. It was published on April 15.
A representative sample of 2,001 Singapore residents aged 21 to 39 were polled online from November to December 2022.
The IPS team noted that eight in 10 respondents have at least a rough idea of how much they are spending, but still worry whether they are spending too much.
Dr Teo said the findings debunk some myths about reckless spending among younger people.
“Young people are quite conservative and thoughtful about their spending, and will work on ensuring that they stay within budget,” she added.
But she noted that while they accept that loans are part of life, especially for big-ticket purchases, some do not have long-term plans for their retirement, with only a third having a definite plan to save for retirement.
Most (about seven in 10) have at least three months’ worth of expenses set aside as savings, and even more (about seven in 10) have more or less planned to save for retirement.
While younger respondents are less likely to plan for the longer term, and a larger proportion prefer to spend on things that make them happy, the report noted that it is likely that perceptions and attitudes may change as they grow older.
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