Everyone has aspirations – it could be as easy as studying abroad to live in a sophisticated penthouse.
Regardless of what your dreams are, they all have one thing in common: they cost money. With the high cost of living in Singapore, the prices of these life milestones will also rise.
This is where financial planning comes into play. To do this, we need to define our goals and priorities so that we understand how much each goal costs, so that we can better budget and manage our cash flow.
We've looked at how much each important milestone of a typical Singaporean company costs so you have an idea of how much money you need and can start planning your financial early.
1. Get a degree
Since childhood, we've had the ritual of learning hard, taking good exams, graduating, and getting a well-paid job. It sounds almost formulaic, but that was the norm for many Singaporeans.
A degree does not necessarily mean job stability, but it can pave the way for a comfortable life.
Given Singapore's strong focus on sophisticated skills to advance the economy, a degree can simply serve as additional protection against competition in an increasingly globalized world.
According to SingStat, residents of Singapore aged 25 and over with university education accounted for 23.7 percent of the total local population in 2010, and that number increased to 31.6 percent in 2018.
If you're considering a degree, the estimated tuition fees at local universities (both public and private) for Singaporeans are between S $ 24,600 and S $ 39,600 when we look at the latest 2020 numbers.
|university||Estimated course fee for 2020 admission|
|National University of Singapore (NUS)||S $ 24,600 – S $ 28,800|
|Nanyang Technological University (NTU)||S $ 24,600 – S $ 28,800|
|Singapore Management University (SMU)||S $ 34,350 – S $ 37,950|
|University of Technology and Design in Singapore (SUTD)||S $ 39,600|
|Singapore University of Social Sciences (SUSS)||S $ 30,000 – S $ 33,440 (for a 4-year course)|
|Singapore Institute of Technology (SIT)||S $ 22,500 – S $ 43,080|
|Australian universities||S $ 34,135 – S $ 45,398|
|Hong Kong universities||S $ 21,121 – S $ 25,693|
|British universities||S $ 33,186 – S $ 55,068|
|US universities||S $ 56,086 – S $ 66,134|
Note: The numbers come from the respective university website
These are estimates based on three-year general courses that exclude more expensive courses such as medicine, dentistry, and music.
However, if you are thinking of studying abroad, tuition fees are generally more expensive and you will also need to take into account accommodation and other living expenses.
At this point, you may want to consider an educational loan at a low interest rate of 4.5 percent and with flexible repayment options, regardless of whether you want to study at a local private institution or a foreign institution.
How much would you need to get a degree: at least S $ 25,000
2nd Open a business
Instead of being an employee, there are some Singaporeans who long to start their own business and be their own boss.
The foundation for starting a business is to first identify a pain point for the consumer before developing a product or service that can solve the problem and meet the company's needs.
Suppose you are planning to set up an IT software launch. You may first need to hire a developer to create the software, a salesperson to sell your software, and a part-time accountant to finance the company. Depending on their professional experience, salaries with the EDB calculator can range from S $ 132,000 to S $ 195,000 per year.
In the first year of operation, you may want to rent a shared work area or hot desk (as we are returning to the "new normal" of work) as the size of the company will be small. With the same computer, the office space costs alone range from S $ 14,400 to S $ 25,200.
There are also services that are normally required to start a business in Singapore, such as: B. Start-up and secretarial services, which cost between S $ 1,000 and 2,000.
The total cost for the first year would be S $ 167,100 to S $ 252,000. Of course you can do away with some of these costs, e.g. B. Remote work to save office costs, or do some of the paperwork yourself to reduce costs.
This Economic Development Board (EDB) calculator is a helpful tool that gives you a rough idea of what to consider before starting your business.
How much would you need to start a business: Up to S $ 252,000
A wedding in Singapore usually costs between S $ 30,000 and S $ 50,000, although extravagant weddings can cost significantly more (i.e., more than S $ 100,000).
The biggest components are the wedding banquet, the bridal package and the honeymoon. There are also other costs to consider, such as wedding rings, dowries, solemnity and wedding photography.
Wedding banquets make up the majority of the cost, with an average of S $ 30,000, while the bridal package can cost up to S $ 6,000 and honeymoons up to S $ 8,000.
How much would you need to get married: S $ 50,000
4th Renovate a house
Buying a house is a huge investment and your savings may be exhausted after you pay the down payment and fees.
When you receive the keys to your new home, you cannot move in immediately. You would still have to spend on renovation and furnishing before you can move in, which is an average of $ 46,806 unless you buy a furnished apartment that can reduce costs.
There are also maintenance costs, property taxes and other miscellaneous fees that need to be added to the final number.
How much would you need to renovate a house: S $ 48,806
5. To raise a child
Having a child is not just an emotional obligation. It is also a financial one. Parents have to look after their children until they are old enough to support themselves financially.
This usually corresponds to around 20 years of financial responsibility for your child. What does that mean in dollars?
There are no standard universal costs for raising a child, but it is possible to summarize some numbers and get a rough estimate of the costs for a child.
The parent magazine SmartParents has compiled a summary of the costs associated with every phase of a child's life:
|Stage of life||How much would it cost|
|pregnancy||At least S $ 8,000|
|Age 0 to 2||At least S $ 60,000|
|Age 3 to 6||At least S $ 40,000|
|Age 7 to 12||At least S $ 70,000|
|Age 13 to 16||At least S $ 70,000|
|Age 17 to 19||At least S $ 16,000 (JC) or S $ 35,000 (poly)|
|Age 19 to 22||At least S $ 40,940 (private) or S $ 118,000 (local university) or S $ 232,000 (foreign university)|
|total||S $ 670,000|
The total cost of raising a child in Singapore easily amounts to more than half a million dollars – regardless of inflation.
How much would you need to raise a child: at least S $ 670,000
Achieve your life goals with a personal loan
It is clear that the different stages of life involve considerable costs and you may be short of money to reach these milestones, especially if you are still in the early years of your career and have not saved much.
This does not mean that we cannot achieve these goals in life. To reduce the financial burden, you can instead get financial help from the bank.
There is nothing wrong with taking out a personal loan. This does not mean that you have a cash flow problem. In fact, it helps you to have better cash flow management so that your savings are not suddenly used up.
Many may not know this, but the cost of borrowing from a personal loan is lower than a credit card interest charge (typically 25 percent a year). This means that borrowers can enjoy interest savings and a higher credit balance.
The cost of taking out a personal loan is also usually lower than that of an SME loan (usually 7 to 13 percent). However, taking out a personal loan is a worthwhile consideration for entrepreneurs to finance their business.
Here is a detailed breakdown of OCBC Bank's various personal loans:
|EasiCredit||Compensation transfer||Cash on rates||ExtraCash loan|
|requirements||– –||Must be an existing OCBC credit card or OCBC EasiCredit account holder||Must be an existing OCBC credit card or OCBC EasiCredit account holder||– –|
|Income needs||Ideal for those on low incomes as a relatively low annual minimum income of S $ 20,000 is required||Minimum annual income of S $ 20,000||Minimum annual income of S $ 20,000||Minimum annual income of S $ 20,000|
|Interest rate||20.90% – 29.80% per year, depending on your annual income||0% per year (effective interest from 5.20% per year)||Interest rates from 4.70% per year (effective interest from 9.06%)||From 5.54% per year (effective interest from 10.96%)|
|fees||Annual fee of S $ 120 (for customers with an annual income of S $ 30,000 or more, the fee for the first year does not apply||A one-time processing fee of 4.5%||1% of the approved loan amount||$ 200 or 2% of the approved loan amount, whichever is greater|
|Minimum monthly repayment||Flexible repayments of 3% of the outstanding amount OR S $ 50 (whichever is higher)||Flexible repayments of 3% or S $ 50 of your total outstanding balance (whichever is higher)||Fixed monthly installments from 12 to 60 months||Fixed monthly installments from 12 to 60 months|
If you want to find out how much you have to pay back monthly based on the amount you want to borrow, you can use the online loan calculator found on the personal loan pages. From there, you can decide which loan is ideal for you. It is really easy and convenient!
For more information on OCBC Bank personal loans or applying for a loan, visit the website here.
This article was written in collaboration with the OCBC Bank.
Selected image source: First Cry Parenting / TWENTY20 / GettyImages / Property Guru / Patkoproperty