Singaporeans Are saving, But Are They Investing Wisely?
Despite a strong savings rate, young adults in Singapore are being urged to shift focus from simply saving to strategic investing, according to recent findings and financial analysis. A growing number of individuals are leveraging digital tools to track spending and set financial goals, but translating savings into long-term growth remains a key challenge.
For years, many relied on basic money management apps to monitor expenses – from daily lunches to larger purchases. One individual experimenting with the OCBC app discovered a surprising truth: cutting back on everyday expenses, like opting for “cai fan” – or economy rice – doesn’t necessarily yield notable savings. “It’s okay, I can just go home and eat cai fan,” a friend reportedly says after extensive travel spending, highlighting the common perception that cheaper meals are a quick fix for financial strain. Though, tracking food expenditure over three months revealed savings of less than $100, even with conscious scrimping. This was attributed to existing dining habits – primarily cooking lunch and dining out only a few times a week at mid-priced establishments.
A recent Straits Times survey of 1,000 young adults aged 18 to 30 underscored the meaning of food expenses, revealing that nearly one-third of thier spending goes towards meals. The survey, conducted by market research firm kantar, found that hawker centres and food courts are the most popular dining destinations, followed by grocery shopping, restaurants, and cafes. This aligns with the personal experiance of the individual using the OCBC app, who found that trimming food costs had minimal impact on overall spending.
While the app offered suggestions like cooking at home and creating shopping lists, the most impactful advice centered on diverting savings to investments. The app flagged instances where savings exceeded 10% of monthly income, recommending exploration of investment products. Ng Lee Peng, head of digital business in Singapore at OCBC Bank, suggests a financial breakdown of at least 10% savings, 10% investment, and no more than 15% on insurance.
Interestingly, Singaporean young adults already exceed thes savings recommendations. The Straits Times survey indicated an average savings rate of 28% of personal income,with 20% allocated to investments and 45% to expenditure. OCBC’s own surveys corroborate this trend, showing those in their 20s saving 32% and those in their 30s saving 30% of their monthly income. A quarter of income is also typically allocated to investments, with over 20% dedicated to insurance.
many initially view high-interest savings accounts as a form of investment,reaping modest monthly returns. However, experts suggest exploring more dynamic investment options. The realization of insufficient savings for a planned trip to the United Kingdom in 2026 served as a wake-up call, highlighting the need for consistent, dedicated savings. Setting a savings goal of over $700 per month, starting instantly, brought the financial commitment into sharp focus.
Beyond large-scale goals, a closer examination of recurring expenses revealed a significant drain on finances: subscriptions. While streaming services like Disney Plus and Netflix had been cancelled, numerous other subscriptions – Spotify, YouTube Premium, Photoshop, and Google Drive cloud storage – continued to accumulate costs. “There comes a time to just ‘exorcise’ the hidden expenses that quietly drain your wallet each month,” stated Shirley Tan, chief marketing officer at Etiqa Insurance Singapore. A personal finance audit can uncover these hidden costs, including unused subscriptions and overlapping insurance coverage.
Ultimately, the key lies in balancing financial responsibility with personal enjoyment. while frugality has its place, cutting back on things that bring joy isn’t always the answer. Prioritizing the elimination of unused subscriptions and channeling savings into investments may be a more effective strategy than sacrificing small pleasures like a daily bubble tea. While cai fan won’t magically recoup travel expenses, a combination of mindful spending, subscription management, and strategic investment can help achieve long-term financial stability.
