Young Adults, Why Aren’t You Saving Enough Money? (Updated)

Young Adults, Why Aren’t You Saving Enough Money? (Updated)

Are you checking your bank balance, and wondering why after a few years of earning a rather decent paycheck, your stash in the bank doesn’t seem to be growing?

Assuming you’re not putting a sizable sum every month into investments or paying off your student loans, a stagnant bank account is a sign that you may be spending above your means.

Here are some money guzzlers to be aware of, from the biggest and most obvious, to the smaller insidious ones.

1. The Rent


While it’s still uncommon in Singapore, renting is something that some young adults think about (and do) when they start earning a decent paycheque.

The independence, privacy, and even convenience can be so alluring.

But, renting costs at least $500 a month and above for a single room in a shared flat far from the city centre, so you may not have the privacy you crave for, much less convenience.  And, renting a small apartment by yourself, or shared, in a more central location can set you back anywhere form $1500 to $3000.

It makes more economic sense to put aside more than a thousand dollars a month as savings or put it in investment and contribute to owning your very own property in future.

You can always choose to rent eventually when your salary allows you more breathing space.

2. The Car

The car is probably the highest expense you can ever incur as a young adult. It’s not just paying for the car, but also the petrol, taxes, maintenance, ridiculous parking charges, and ERP.

Let’s not even go into how you’re still late because you were stuck in traffic and couldn’t find a parking spot.

Taking all that into consideration, your total cost of owning a car is a lot scarier than you think, especially when you compare to the alternatives.

To put things into perspective, parking you car in the CBD area for half a day could easily make you $20 poorer, and that’s the cost of about 10 MRT rides.

But if you must absolutely drive, you can reduce your petrol costs significantly if you pay with a credit card with good petrol promotions, such as the UOB One Card that offers up to 24% savings on petrol.

UOB One Card

UOB One Card

Welcome Gift – Receive up to S$80 Cash Credit when you apply today!

Enjoy up to 5% cashback on all spend and up to 24% petrol savings.

3. Designer, Bespoke, Artisanal


Think you’re not spending too much on designer garb just because you’re not cashing out on Chanel and Prada?

Well, you’re wrong…

It’s not just the top-end brands that are taking away your hard-earned money. These days, it’s anything with the words “niche”, “artisanal” or “bespoke”.

You may think that you’re standing out from the crowd without shelling out thousands, but it’d quickly rake up if you decide on that $250 tie from a bespoke tailor $300 for a bottle of artisanal fragrance, and the list goes on.

4. Expensive, or One Too Many Vacations


Made it through the list and gloating about how none of these applies so far? Are you, perhaps, the experiential spender?

Travelling is great and enriches your mind and spirit.  But if you haven’t been saving much money, then perhaps a week off to see the ruins of Angkor Wat is a lot more feasible than two weeks in the Greek Islands.

Also, you can try and explore cheaper accommodation options on sites like AirBnB so you’re burning less cash than on a hotel.

Ultimately, strike a deal with yourself. If you plan to travel a lot, then travel cheap.

5. Cab & Ride-Hailing



Almost every young professional falls for this trap. Working late? Uber. Heading home after a night out? Grab. Five late night of ride-hailing rides could easily set you back by more than $100, that’s about 20 lunches at the food court.

Take your work home if you need to work late, and maybe take a cab only when you absolutely need to. Set a small “emergency cab fund” and once you’ve used it all, there’s no replenishing till the next month.

6. “Investing” in Your Work Wardrobe

This is a rather common trap and it isn’t unheard of for young adults to spend a fortune on the work wardrobe, some even before their first paycheque.

Fake it till you make it?

We beg to differ. Frankly, unless you’re in a profession that places a ton of weight on how you dress (in this case you better hope your salary justifies it), the truth is… nobody cares.

You don’t have to make it through weeks without repeating your outfit, and chances are you can still make it in life with a limited wardrobe.

Best Example
Check out Steve Job’s work wardrobe over a decade


Set a limit to either the number of new pieces of clothing you can buy, or a budget.  And when you do shop, make sure you use a credit card with unlimited cash back and exclusive rewards at the same time. Also, tell your friends about your issue and do spot checks on each other.  There’s a good chance that you have a friend that needs some help too.

7. Food and the “Occasional” After-Work Drinks


We get it that you’ve worked hard and don’t see anything wrong with the occasional drinks and fancy meal. But making this a weekly habit (or even more) can easily mean hundreds of dollars going down the drain.

What’s more insidious?

Checking out that new ramen place for lunch with your colleagues, so every day is a day of indulgence, whether big or small. Don’t be embarrassed to say that you’re on a budget and suggest a place you’re comfortable with.  True friends understand.

8. Gym Memberships


Remember how keeping fit meant going for a jog and doing sit-ups?  The good news is, running around your neighbourhood is still free.

If you’re lazy, the only exercise you’re getting for paying close to $200 a month is an exercise in coming up with excuses not to go.  If you’re really serious about your exercise, check out the community centres, which have good gyms too.

9. Latte Factor


Caffeine fix becomes a must for most Singaporeans today, especially the youngsters. This coffee culture has given birth to the popularised term of “latte factor” – which simply means saving the usually small and periodic spending on things like coffee would results in significant amount of savings.

Here’s how latte factor works. Lim spends S$5 daily on premium coffee. However, if he stops spending that money and save it in an investment account that yields 6% per annum on average, he would have a savings of S$164,525.05 in 30 years.

Next, try doing the same thing for other recurring small expenses such as the money you spend on monthly magazine or even eating out.

You may think that the small expenses are inconsequential, but hey, S$5 a day makes a huge lot of difference in years to come.

Giving up coffee sounds too painful?

You don’t have to completely give it up! Instead of buying individual artisanal cups of coffee every day, you can try brewing your own coffee at home or in the office.

And forget about buying magazine. There are tons of articles available online for free.

10. Sneaker Headslimited-edition-sneakers

It’s a norm for young adults today to spend tons of money just to be cool or to practise the “HypeBeast” lifestyle or even become sneaker heads who collect super-rare and expensive shoes.

The price of these sneakers can cost you from S$299 to S$399 and don’t be surprised that people are willing to pay the shoes reseller up to S$1,200.

Why? Because they are limited edition and some people are willing to line up for hours just to acquire the unique sneakers.

Why suffer financially just so you can look cool from the inside? Instead, work towards making your bank account cool and your appearance will soon follow suit!

Some are even willing to turn to credit cards to afford the luxuries that they cannot afford. It all comes down to prioritising.

If you don’t have the money to pay cash for the expensive shoes or even the latest smartphone, you need to find an alternate solution like seeking for alternative income sources, or just forget about those shoes and focus on something that will contribute to your wealth in the long-term!

If you’re serious about cutting down your expenses and want to find out the evil little culprits that are quietly guzzling your money, track your expenses diligently with a free mobile app and generate a report at the end of the month.

First published on June 18, 2015.

Good luck!
And happy saving!
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