Cost of Living in Singapore 2024: Is Your Salary Enough?

While Singapore is projected to reach an average core inflation rate of 2.5% to 3.5% in 2024 overall, the risks prevalent in this outlook remain looming. Unexpected spikes in global food and energy prices or higher-than-anticipated labour demand domestically could lead to increased inflationary pressures.

Managing the cost of living here presents its own set of challenges in addition to dealing with inflation. Housing, rental, and property prices remain high, while education costs and ensuring sufficient funding for healthcare expenses can also add to the financial burden for many families. These factors can make it difficult for some residents to balance their budgets.

Will your salary be enough to cope? How much would a family of four need to continue living comfortably? By carefully evaluating your income against these growing expenses, you can ensure financial stability and a comfortable lifestyle. This emphasis on financial planning puts you in control of your financial future.

Related: 3 Things You Must Do If You’re Cash-Strapped but Want Insurance Coverage

Latest Median Household Income in Singapore

Of course, what counts as a “sufficient” salary differs from person to person. Let’s use some data as a jumping-off point, namely, the Key Household Income Trends 2023 report published by SingStat.

From the report:

• Median monthly household income from work: S$10,869
• Median monthly household income from work per household member: S$3,500

In statistics, “median” refers to the value separating the higher half from the lower half of a sample of data. This means that 50% of households in Singapore had a monthly income higher than S$10,869, and 50% of households had an income that was lower.

Okay, that’s all well and good, but is a monthly household income just shy of S$11,000 sufficient to continue living comfortably as prices continue climbing upwards?

Average Monthly Household Expenses in Singapore

The table below shows the average monthly household expenditure based on data from SingStat’s Household Expenditure Survey (HES) 2017/18. (Note: these surveys are typically conducted every five years.)

Source: SingStat Household Expenditure Survey (HES) 2017/18

Comparing the total average cost of monthly household expenses of S$4,908 and the median monthly household income from work per household member of S$3,500, it becomes clear that in order to sustain a comfortable life with room for savings in Singapore, at least two household members need to be earning a salary at all times. This is also non-inclusive of the costs involved in raising kids or taking care of the elderly at home, which will incur more specific costs.

You will also need to factor in headroom in the household budget for savings, investments, insurance and other important financial needs. Perhaps this is why Singaporeans burnout rate is relatively high?

Related: 5 Ways to Save Money On Your Wedding in Singapore

How Much Salary Do You Need to Live Comfortably in Singapore?

An oft-quoted rule of thumb is that 20% of your income should go into retirement savings.

If we apply this rule to the figures above, we see that a working couple should aim for a combined monthly income of S$7,000.

This will leave S$1,400 for retirement savings for both of you, but you may want a higher income to cover insurance needs, leisure activities such as overseas holidays, and more.

Tips For Stretching Your Salary

With inflation expected to carry on rising, you’ll need to make your dollars from your salary stretch even further. Here are some tips to help you do just that.

Lock In Your Mortgage

Housing costs make up a large portion of household budgets, and with mortgage rates threatening to stay high in 2024, you could be faced with unbearable housing costs in the near future.

If you can still find them, locking in your mortgage using a fixed-rate package may prove useful. This will prevent your mortgage from increasing uncontrollably and adding to your financial burden.

Buy Second-Hand When Shopping for Cars

If you’re looking to purchase a private car right now, it is advisable to shop around in the second-hand market instead. Here’s three reasons why:

Benefits of buying second-hand cars in Singapore

• Cost-effective: Given Singapore’s high COE (Certificate of Entitlement) prices, purchasing a brand new car can be financially daunting. Used cars, having already undergone initial depreciation, are generally more affordable and allow you to save on COE costs.
• More variety: When buying a new car, your options may be limited to the latest models available from manufacturers. In the second-hand market, you have access to a wide range of makes and models with varying features and prices, including cars from previous COE cycles.
• Lower insurance premiums: Used cars typically come with lower car insurance premiums compared to new cars because they have a lower value. This can be a significant saving in a market where car ownership costs are already high.

Beware Discretionary Spending

It is always a good habit to periodically review your discretionary expenses to weed out services and subscriptions you no longer use, and this goes double for the times we’re in right now.

Don’t underestimate the value of a few dollars saved here and there, they can quickly add up to a tidy pile. You should also review your discretionary spending and cut out those that you don’t really need.

It’s not about depriving yourself. Rather, it’s about spending your money wisely – i.e., prioritising things that make the most positive impact on your wellbeing, and giving up the rest.

Take Advantage of High-Interest Saving Accounts

The next time you come across an ad for a high-interest savings account, take heed. Banks are dangling eye-popping savings interest rates in a bid to attract more customer deposits.

Since you’re looking to spend less, this means you will have more spare cash sitting in your bank account, so you might as well go ahead and earn yourself some additional interest.

You may have to jump through a few hoops (such as crediting your salary, investing, or signing up for an insurance plan) to start unlocking the best interest rates, but you shouldn’t let the perceived inconvenience stop you from earning essentially free money.

But whatever you do, don’t fall into the trap of spending more just to reach that next level of bonus interest; that’ll be defeating the purpose!

Read Also: How To Invest & Buy Insurance Without Sacrificing Your Starbucks Coffee Or Mala Hotpot

Need some added funds to cope with high inflation? A personal loan can help. We’ve curated the best personal loans in Singapore from banks and licensed moneylenders based on the best interest rates on the market.

Looking to grow your money to keep pace with inflation? Check out our roundup of the best investing tools in the market today.

Read More:

• How Much Insurance Coverage Do You Really Need And What Insurance Plans Should You Get?
• 4 Low-Risk Investment Alternatives to Fixed Deposits
• 7 Most Popular Types of Investments in Singapore
• How to Determine the Value of Your HDB Flat

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