17-03-2011, 06:29 AM
Four examples are given below on different households and how they tackle rising costs:-
Mar 17, 2011
THE LOWER-MIDDLE INCOME FAMILY
Saving for a home is slow going
Who: Mr Vincent Koh, 26, civil servant, and his wife Nan Myat Thu Khaing, 24, a housewife with a university degree from her native country Myanmar.
Monthly take-home income: About $3,300 (after deducting CPF)
Monthly expenses: Car loan, insurance and petrol - $1,400; mobile phone bills - $100; household expenses - $250
Monthly savings: $800 goes towards a down payment on a flat
Mr Koh and his wife are trying to save for a home of their own and move out of his parents' flat in Choa Chu Kang.
They are hoping to buy a five-room flat direct from the HDB, but saving for a down payment is slow going.
For one thing, Mr Koh's wife, who is originally from Myanmar, is on a long-term social visit pass and is not authorised to work. They registered their marriage about 10 months ago.
Ms Nan Myat Thu Khaing, who holds a university degree and is fluent in English, is applying for permanent residency so she can work and the couple can buy a subsidised HDB flat sooner.
Mr Koh's two brothers are still schooling, so he contributes towards paying for family expenses at his parents' flat. Other major household expenses include his car loan, insurance and petrol costs, which add up to about $1,400 a month.
'We usually eat at home, and might watch a movie once a week. I don't gamble, smoke or drink so there's nothing to spend on,' Mr Koh quipped.
To save money, Mr Koh tops up his fuel tank in Johor Baru, where the couple also shop for groceries and eat out occasionally.
They also wait for sales when they shop and any savings are put away for their future house.
For holidays, they wait for travel fairs and offers to nearby countries like Malaysia.
Said Mr Koh: 'My wife does most of the household shopping. She is a better finance manager than I am. She's been living here for less than a year and she's noticed that the price of most groceries has gone up.'
Tackling inflation tip... from financial planner Roy Varghese of ipac financial planning: For a couple earning less than $5,000 a month, a car is a luxury. They are better off with public transport. 'For younger people, it is essential to upgrade your skills and double your income every 10 years,' he said.
GRACE CHUA
THE MIDDLE-INCOME FAMILY
Large part of pay saved for children's education
Who: Mr Ganesan Tamilselvan, 45, runs an employment agency for technical workers and professionals. His wife, 32, also works at the agency. They have two children aged 4-1/2 and 2-1/2.
Monthly household income: About $5,000 to $6,000.
Monthly expenses: Household items and groceries about $500; insurance $150; mobile phone bills $300 (they use the phones for business and frequently make overseas calls). The monthly payment for their three-room Housing Board flat is about $750, but comes from the Central Provident Fund. They may buy furniture or appliances or repaint the flat, at $500 to $800 once a year.
Monthly savings: Children's education $1,000 a month; any remainder from spending is also saved, not spent.
With a monthly income of about $5,000 to $6,000, Mr Tamilselvan's household is solidly middle-class. The median household income for employed households here was $5,710 last year.
A large chunk of the family's income goes towards saving for their young son's and daughter's future education.
'Education is very important in Singapore; without education, life is not successful,' said Mr Tamilselvan, who has a master's degree in commerce.
When the couple bought their three-room flat about two years ago, they had just started the employment agency, and were taking home about $3,000 a month.
Although the business has taken off, they have kept to the same spending habits. They still get by without a car, taking public transport or taxis in a pinch, though Mr Tamilselvan finds himself taking taxis less to save money.
For recreation, the family goes to the beach or sightsee locally, and does not plan to take an overseas holiday soon.
They salt away their savings in fixed deposit accounts for higher interest.
Mr Tamilselvan also plans to start another business in the near future, this one importing goods from India.
However, he does not have a set retirement plan.
'I'm going to be working hard as the boss of my business... Maybe in another 15 years, I'll retire,' he said.
Tackling inflation tip... from Mr Roy Varghese of ipac financial planning: 'It is highly likely that this segment of the population will be least prepared for retirement due to a low savings rate,' he said.
But the Tamilselvan family are doing some things right, such as doing without a maid or a car.
In general, people should keep saving the same amount every month and invest in moderate risk products as a hedge against inflation. 'Working hard now is a trade-off to achieving your goals later in life,' Mr Varghese said.
GRACE CHUA
THE RETIREE
Frugal but comfortable
Who: Mr Heng Cho Choon, 67, retired teacher. His wife, 57, is an administrative officer at a private school, and plans to retire in about five years' time. They live with three sons, two of whom are working; the third is in polytechnic.
Monthly household income: $2,200 a month from pension; wife's income $2,200; $900 from an annuity which he initially paid $100,000 for when he retired 10 years ago.
Monthly expenses: Household expenses such as food, $400 a month; utilities, $300; property tax on their five-room Housing Board flat, about $100; transport, less than $100 each.
Savings: About $100,000.
Retired teacher Mr Heng says he is comfortable, but lives a simple life.
'I don't think I'm worried because I've got a pension,' he said. 'Some of my friends are relying on CPF, which is a dwindling iceberg; some have two houses and stay in one and rent out the other.'
In 2-1/2 years, his monthly pension will go up to $3,500, or two-thirds of his last drawn pay, so he is not worried about inflation. The couple also get subsidised medical care.
Still, he got rid of his car when he stopped working.
'When I was working, time was of the essence. Now, I have plenty of time so I just travel by train or bus.'
Mr Heng has a handful of hobbies: reading, writing, editing his church magazine, and photography.
However, their youngest son is still in polytechnic, and they expect to have to shell out some $50,000 for his university expenses in a few years' time.
That sum is sitting in a savings account and not earning much interest, but Mr Heng said: 'A bit of interest is also OK.'
Tackling inflation tip... from Mr James Sim, president of Financial Planning Association: Savings accounts have such low interest rates that inflation will more than wipe out any gains. Retirees should seek good advice on getting safe but steady returns on their money.
He added: 'Fighting inflation is not about saving money - when inflation comes, it is a killer of savings.'
Mr Sim said also that retirees ought to clear all remaining debt before buying any big-ticket items.
And lastly - exercise to stay healthy.
'If you are healthy, you can enjoy your retirement with a greater piece of mind.'
GRACE CHUA
THE LOW-INCOME FAMILY
Food prices are a major concern
Who: Housewife Noor Hafizah Hanafi, 29. Husband is an immigration officer and they have three kids aged 11, three, and 11 months.
Monthly household income: $1,200
Monthly expenses: Milk and diapers $600; cellphone bills $110; Household items, toiletries $80; groceries $100; transport $100; children's allowance $60; other miscellaneous expenses
Monthly savings: None
Ms Hafizah wants to work, and soon: 'I can't stay on like this. Whatever it is, I have to go out and work.'
The housewife left her sales job four years ago, before she had her second child. She said price hikes have hit the family where it matters most - at the dinner table.
Her concerns about food costs are typical of poor families as they spend a bigger chunk of their income on food. Those in the bottom 20 per cent spend about 26 per cent of their income on uncooked food and meals, compared with 18 per cent for those in the top 20 per cent, according to a 2008 household expenditure survey.
Ms Hafizah shops only once a month for groceries. She buys the cheapest variety available for essentials such as rice, milk and oil. The family eats in, almost all the time. Even after that, the Circuit Road resident sometimes saves on food items by substituting meals with instant noodles or sardines on bread.
'Are things more expensive now? Definitely,' she said.
Tackling inflation tip... from nutritionist Teo Kiok Seng: Instant noodles are all right once in a while, but try mixing white rice with unpolished rice. Also, powdered milk is cheaper than UHT milk packets. Vegetable protein, such as tempeh, tofu or even baked beans are just as good - and costs less than meat.
YEN FENG
Mar 17, 2011
THE LOWER-MIDDLE INCOME FAMILY
Saving for a home is slow going
Who: Mr Vincent Koh, 26, civil servant, and his wife Nan Myat Thu Khaing, 24, a housewife with a university degree from her native country Myanmar.
Monthly take-home income: About $3,300 (after deducting CPF)
Monthly expenses: Car loan, insurance and petrol - $1,400; mobile phone bills - $100; household expenses - $250
Monthly savings: $800 goes towards a down payment on a flat
Mr Koh and his wife are trying to save for a home of their own and move out of his parents' flat in Choa Chu Kang.
They are hoping to buy a five-room flat direct from the HDB, but saving for a down payment is slow going.
For one thing, Mr Koh's wife, who is originally from Myanmar, is on a long-term social visit pass and is not authorised to work. They registered their marriage about 10 months ago.
Ms Nan Myat Thu Khaing, who holds a university degree and is fluent in English, is applying for permanent residency so she can work and the couple can buy a subsidised HDB flat sooner.
Mr Koh's two brothers are still schooling, so he contributes towards paying for family expenses at his parents' flat. Other major household expenses include his car loan, insurance and petrol costs, which add up to about $1,400 a month.
'We usually eat at home, and might watch a movie once a week. I don't gamble, smoke or drink so there's nothing to spend on,' Mr Koh quipped.
To save money, Mr Koh tops up his fuel tank in Johor Baru, where the couple also shop for groceries and eat out occasionally.
They also wait for sales when they shop and any savings are put away for their future house.
For holidays, they wait for travel fairs and offers to nearby countries like Malaysia.
Said Mr Koh: 'My wife does most of the household shopping. She is a better finance manager than I am. She's been living here for less than a year and she's noticed that the price of most groceries has gone up.'
Tackling inflation tip... from financial planner Roy Varghese of ipac financial planning: For a couple earning less than $5,000 a month, a car is a luxury. They are better off with public transport. 'For younger people, it is essential to upgrade your skills and double your income every 10 years,' he said.
GRACE CHUA
THE MIDDLE-INCOME FAMILY
Large part of pay saved for children's education
Who: Mr Ganesan Tamilselvan, 45, runs an employment agency for technical workers and professionals. His wife, 32, also works at the agency. They have two children aged 4-1/2 and 2-1/2.
Monthly household income: About $5,000 to $6,000.
Monthly expenses: Household items and groceries about $500; insurance $150; mobile phone bills $300 (they use the phones for business and frequently make overseas calls). The monthly payment for their three-room Housing Board flat is about $750, but comes from the Central Provident Fund. They may buy furniture or appliances or repaint the flat, at $500 to $800 once a year.
Monthly savings: Children's education $1,000 a month; any remainder from spending is also saved, not spent.
With a monthly income of about $5,000 to $6,000, Mr Tamilselvan's household is solidly middle-class. The median household income for employed households here was $5,710 last year.
A large chunk of the family's income goes towards saving for their young son's and daughter's future education.
'Education is very important in Singapore; without education, life is not successful,' said Mr Tamilselvan, who has a master's degree in commerce.
When the couple bought their three-room flat about two years ago, they had just started the employment agency, and were taking home about $3,000 a month.
Although the business has taken off, they have kept to the same spending habits. They still get by without a car, taking public transport or taxis in a pinch, though Mr Tamilselvan finds himself taking taxis less to save money.
For recreation, the family goes to the beach or sightsee locally, and does not plan to take an overseas holiday soon.
They salt away their savings in fixed deposit accounts for higher interest.
Mr Tamilselvan also plans to start another business in the near future, this one importing goods from India.
However, he does not have a set retirement plan.
'I'm going to be working hard as the boss of my business... Maybe in another 15 years, I'll retire,' he said.
Tackling inflation tip... from Mr Roy Varghese of ipac financial planning: 'It is highly likely that this segment of the population will be least prepared for retirement due to a low savings rate,' he said.
But the Tamilselvan family are doing some things right, such as doing without a maid or a car.
In general, people should keep saving the same amount every month and invest in moderate risk products as a hedge against inflation. 'Working hard now is a trade-off to achieving your goals later in life,' Mr Varghese said.
GRACE CHUA
THE RETIREE
Frugal but comfortable
Who: Mr Heng Cho Choon, 67, retired teacher. His wife, 57, is an administrative officer at a private school, and plans to retire in about five years' time. They live with three sons, two of whom are working; the third is in polytechnic.
Monthly household income: $2,200 a month from pension; wife's income $2,200; $900 from an annuity which he initially paid $100,000 for when he retired 10 years ago.
Monthly expenses: Household expenses such as food, $400 a month; utilities, $300; property tax on their five-room Housing Board flat, about $100; transport, less than $100 each.
Savings: About $100,000.
Retired teacher Mr Heng says he is comfortable, but lives a simple life.
'I don't think I'm worried because I've got a pension,' he said. 'Some of my friends are relying on CPF, which is a dwindling iceberg; some have two houses and stay in one and rent out the other.'
In 2-1/2 years, his monthly pension will go up to $3,500, or two-thirds of his last drawn pay, so he is not worried about inflation. The couple also get subsidised medical care.
Still, he got rid of his car when he stopped working.
'When I was working, time was of the essence. Now, I have plenty of time so I just travel by train or bus.'
Mr Heng has a handful of hobbies: reading, writing, editing his church magazine, and photography.
However, their youngest son is still in polytechnic, and they expect to have to shell out some $50,000 for his university expenses in a few years' time.
That sum is sitting in a savings account and not earning much interest, but Mr Heng said: 'A bit of interest is also OK.'
Tackling inflation tip... from Mr James Sim, president of Financial Planning Association: Savings accounts have such low interest rates that inflation will more than wipe out any gains. Retirees should seek good advice on getting safe but steady returns on their money.
He added: 'Fighting inflation is not about saving money - when inflation comes, it is a killer of savings.'
Mr Sim said also that retirees ought to clear all remaining debt before buying any big-ticket items.
And lastly - exercise to stay healthy.
'If you are healthy, you can enjoy your retirement with a greater piece of mind.'
GRACE CHUA
THE LOW-INCOME FAMILY
Food prices are a major concern
Who: Housewife Noor Hafizah Hanafi, 29. Husband is an immigration officer and they have three kids aged 11, three, and 11 months.
Monthly household income: $1,200
Monthly expenses: Milk and diapers $600; cellphone bills $110; Household items, toiletries $80; groceries $100; transport $100; children's allowance $60; other miscellaneous expenses
Monthly savings: None
Ms Hafizah wants to work, and soon: 'I can't stay on like this. Whatever it is, I have to go out and work.'
The housewife left her sales job four years ago, before she had her second child. She said price hikes have hit the family where it matters most - at the dinner table.
Her concerns about food costs are typical of poor families as they spend a bigger chunk of their income on food. Those in the bottom 20 per cent spend about 26 per cent of their income on uncooked food and meals, compared with 18 per cent for those in the top 20 per cent, according to a 2008 household expenditure survey.
Ms Hafizah shops only once a month for groceries. She buys the cheapest variety available for essentials such as rice, milk and oil. The family eats in, almost all the time. Even after that, the Circuit Road resident sometimes saves on food items by substituting meals with instant noodles or sardines on bread.
'Are things more expensive now? Definitely,' she said.
Tackling inflation tip... from nutritionist Teo Kiok Seng: Instant noodles are all right once in a while, but try mixing white rice with unpolished rice. Also, powdered milk is cheaper than UHT milk packets. Vegetable protein, such as tempeh, tofu or even baked beans are just as good - and costs less than meat.
YEN FENG
