It’s rather easy to get tempted to buy everything that you can think of, thanks to the availability of credit cards and contactless payment methods. Most people find themselves spending beyond their budget.
What has contributed to this phenomena? Consumers consider online shopping to be convenient and then it turns into a shopping spree when you have your credit card within reach.
What can you do to prevent this?
Eventually, most Singaporeans find themselves in debt and will struggle with huge credit card bills following their overspending. In Singapore, credit card debts are said to be on an increase and it happens most cardholders with debts are aged between 21 and 30.
So, why do some people live outside their means?
Social Media Influence – Facebook, Instagram, and More
Social media fuels competition between followers and friends where each is pushing to publish the nicest picture of themselves, achievement, their newest car, or holiday to get the most likes possible.
How can you avoid getting sucked into this trend? In turn, the other will feel obligated to follow suit and do something similar since they are motivated by the fear of missing out (FOMO).
One might end up splurging on branded stuff just to keep up with others, or buy unnecessary items that they actually don’t need and will exceed their budget.
Ignorance is Not Bliss
Most people do not usually realize how impulsive spenders they are. Particularly when they fail to tell the difference between wants and needs. It is crucial to know how you can budget and plan one’s money before it’s too late. Only to find themselves deep in a huge debt.
Financial planning and budgeting are important skills to acquire. Many guides are available online that can aid you in planning your money.
Being too Concerned With Social Status
Besides social media and the net, some people will go to extremes just they seem successful – even if they are truly struggling. They will buy items outside their budget or pick a lifestyle that they can’t afford.
For example, they will get a moneylender issued the personal loan to get a house in an affluent neighborhood like Orchard/ Central area of Singapore where most homes cost large sums. This leads to a high chance of them ending up in debt as they will not be able to cater to their bills.
Not Bargaining, / Feeling Too “Paiseh” to Bargain
Failing to bargain on property deals, card interest, medical/legal bills, and buys at shopping marts/malls means that you will be paying beyond what you should. Why do you need to bargain? Without bargaining, you will be paying a highly expensive rate.
It’s possible for some cases to cut the prices by half. By bargaining, you will avoid having to get a moneylender issued the personal loan in order to buy the item you want since price cut will make it more affordable.
Failing to Compare Prices Between the items
Hurried buying behavior will also lead to increasingly higher amounts. A similar item may be selling at different stores for different prices. What can you do to avoid overspending? Some stores or supermarkets will offer big discounts during “happy hour”. but, when consumers don’t bother to examine prices or note the limited deals, they’ll end up paying more for many items.
Funding the ‘Small’ Subscriptions
Don’t overlook subscriptions as they stand for a fixed amount of cash leaving your pockets each month. The popular, subscriptions in Singapore are Amazon Prime, Netflix, Gym membership, Spotify Premium, or other shopping memberships on websites and clubs.
Once you sign up for monthly payments, they usually are paying a low price for many things. But, all the subscriptions will not amount to a rather big part of your total income.
Too many coffee dates and the Love for Coffee
Many believe that coffee is what keeps them going so they just take a cup of coffee each day. But, what can you do instead? A nice cup of coffee is costly in Singapore. In general, it goes for $5 or more for a cup at Starbucks. Amassed together, average Singaporeans coffee lover will spend lots of on drinks each month.
Pursuit Of Hobbies
This is one way to get away from the daily routine and take up something that truly excites you. But at times, hobbies can be expensive and costly to sustain. Skydiving, hiking, and Photography are thrilling but cost large amounts. Other hobbies like music or dancing expensive tool. Yet, it’s at times hard to resist its lure of activities.
Failing to Compare Phone Tariffs, Phone Plans, and Contracts
With the new mobile plans and new Telcos, the low-cost SIM Only Plan goes for $15 a month. Other plans that have other features might go to $98 a month or more. However, some locals will fail to do a thorough investigation of their tariff plans in regards to their needs and they instead end up spending more than they have to Telcos.
Spoiling the Party
During birthdays and other fetes, some people believe it’s a time for them to spoil themselves in ordering elegant items. They could even throw parties which cost them a huge amount. In addition, people will purchase pricey gifts for their relatives and friends.
What makes people consider spoiling themselves on special occasions? Another instance is when colleagues and friends choose to dine at pricey restaurants or even buy costly gifts to share and you will be too “paiseh” to turn it down.
Overspending often happens to most Singaporeans and for most, this is uncontrollable. It can become difficult for them to manage financially and we are all aware of how crucial it is for you to manage your own finances.
But then, you don’t have to worry! It is always possible for you to start altering your spending habits and choose to save or invest instead. Once you identify the root cause of your overspending, you can learn ways of reducing your outflow and use the money better for maximum benefit.