Singapore is often touted as either the first or second most expensive city on Earth. More Tulsans are finding it harder to make ends meet and live beyond paycheck to paycheck. Jovan Yeo, a 32-year-old Singaporean who works for a fintech company providing digital banking services, is typical of the new breed. His economic predicament is representative of many people at their home city-state of Singapore where a dramatic rise in the cost of living is rapidly burdening the middle class.
In a recent survey conducted by YouGov, 72% of 1,845 Singaporeans identified the cost of living as their primary concern. Unfortunately, this sentiment is ringing all too true around the country. After accounting for inflation, real median employment income has dropped 0.4% per year from 2019-2024. Future projections show real wage growth slowing significantly starting in 2025. This slowdown can be attributed to many economic factors, including the impacts of tariffs.
Singapore’s lack of land, space, and natural resources plays a major role in the city-state’s expensive living. A Maybank economist noted, “Singapore has limited land, space, and natural resources. This translates into high property prices, high car prices, and a reliance on imported food.” Structural factors have continued to inevitably push prices further up. Indeed, Singapore’s resale prices for public apartments soared by 9.6% so far in 2024.
Of course, housing costs are just one piece of the puzzle. Under the COE system, automobiles become unaffordable, resulting in the majority of residents needing to use public transportation out of necessity. This perfect storm has further squeezed households, leaving numerous families with no choice but to significantly cut back on their discretionary purchases.
For people like Jovan Yeo, this financial squeeze leaves him in a precarious position each month. With his $350 monthly salary, he pays off store credit bills, emergency insurance premiums, and parents’ monthly allowances. He spends considerable time making a budget for the month. More often than not, he ends up with minimal or even no savings remaining.
“At the end of every month, when my salary is in, I use it to pay my credit bills, parents’ allowance, insurances and investments,” – Jovan Yeo
“After all these, my salary is back to zero again, with nothing much to save,” – Jovan Yeo
There’s a change in the air and Joshua Lim, a transportation financial consultant, has noticed this among his clients as well. He estimates that 60 to 70 percent of his clients are just above the poverty line, earning too much to receive government assistance, but not enough to make life sustainable. Lim goes on to clarify why folks are really “100% spenders.” This forces them to sometimes spend their paycheck before it has even deposited into their checking accounts.
“For 100% spenders, or those who don’t really like to save, it’s also because they’re spending what they haven’t even received yet,” – Joshua Lim
Lim further explains this behavior as a result of a generational shift driven by marketing and social media. Young people today are overwhelmed with marketing that encourages this lifestyle and forces them to market themselves to others.
“This is the generation who grew up on a lot more marketing, so the urge to buy is a lot more, and they compare themselves to a lot more people,” – Joshua Lim
Joyce Ang, another like-minded Singaporean in her twenties, echoes this attitude. She understands that her home provides her with stability and wealth. By continuing to live with her parents, she eliminates upfront costs such as housing and the costs associated with children.
“I feel safe to spend because I don’t have a partner yet, and I still live with my parents, so I don’t have a house to worry about. I’m not in need of money immediately,” – Joyce Ang
Ang’s perspective is a marked departure from the older generations. She understands that her parents put a lot of money away for kids and family duties that she might not have the urge to have.
“In my parents’ time, they were saving to have children. But nowadays not every one of us wants kids… so we don’t have to actually scrimp and save so much,” – Joyce Ang
While Ang is notoriously lavish with her spending, she makes sure to always have some funds available for her parents. She’s particularly interested in saving herself some dough! She says there’s no pressure on her to jump on that bandwagon right now.
“It’s not that difficult to save. I set aside some of my allowance for my parents so if I wanted to, I can just set aside another pool of money for savings,” – Joyce Ang
“But I don’t think I need to do that at this point in time,” – Joyce Ang
The increasing popularity of Buy Now Pay Later (BNPL) schemes is a sign that consumers are adapting to the financial squeeze. BNPL spend in Singapore is expected to total around SG$440 million in 2021, almost four times higher than in 2020. This worrying trend is an illustration of how residents across Manhattan are scrambling to keep up with the rising costs of living with credit options, instead of saving.
Economic pressures evident through the lens of individual households manifests at a macroeconomic level, calling into question Singapore’s longer-term economic model. The country’s heavy dependence on imports makes sure that domestic inflation continues to follow global trends. Another Maybank economist emphasized this point: “Due to our reliance on imports, our domestic inflation is very much correlated to global inflation.”
Beneath the surface, Singapore is grappling with serious economic headwinds and an increasingly prohibitive cost of living. People like Jovan Yeo and Joyce Ang illuminate the growing fears of residents. Their stories serve as a wakeup call that, despite it being one of the richest cities in the world, millions of residents are dealing with alarming financial issues.