5 Tips To Better Plan Your Budget in a Post-COVID World

Emma Lam

Emma Lam

Last updated 12 May, 2022

Even if your lifestyle hasn’t altered much emerging from the pandemic, the state of the global economy definitely has. Here’s how to bolster your financial decisions and resources in a post-COVID-19 world.

As society continues to streamline from an endemic phase into a post-COVID-19 world, many are trying their best to reintegrate back into normalcy. In all facets of our lives, COVID-19 has undoubtedly left an imprint that is mostly unwelcomed.

From geopolitical instability to rising global inflation, all these impacts are greatly felt in our economies both short and long term. Within microcosms like communities and homes, energy price surges, supply shortages, and costlier day-to-day expenses all threaten budget management and growth.

After all, there’s only so much the S$11 billion COVID-19 Resilience Package (Budget 2021) or the S$560 million Household Support Package (Budget 2022) can fulfil on a personal scale before funds are depleted.

Many teenagers and young adults that entered the pandemic have now emerged as grown individuals. Suddenly, they are thrust into the clutches of adulthood, expected to manage important financial decisions and chart their entire life trajectory out.

These muddled, unchartered waters are difficult to navigate. So just how exactly are we supposed to handle our budgets in a post-COVID-19 world?

Table of contents

1. You can never save too much

After a solid two years of pandemic-induced financial struggles, Singaporeans seem to possess a more optimistic outlook on the future. More individuals are saving more, spending less and owing less debt, as seen from the third instalment of OCBC’s Financial Wellness Index 2021.

According to OCBC, there are 10 pillars (and 24 indicators) to be aware of:

Source: OCBC

Unsurprisingly, saving regularly stands out as one of the top priorities in financial wellness.

Most are familiar with the standard 80/20 rule, which suggests putting 20% of your take-home pay into savings and the remaining 80% for your spending

There are also other variations that further divide the 80% expenditure into categories like necessities, wants and debt repayment. 

Saving Rule Pros Cons
80/20 rule:
80% spending
20% savings
More flexibility in expenditure  Less defined categorical spending might lead to poor budgeting and overspending in certain areas
50/30/20 rule:
50% needs
30% wants
20% savings and debt reduction
More structured expenditure
Good for clearing debt
Savings split between actually saving and repaying debt
70/20/10 rule:
70% spending
20% debt reduction
10% savings
Fewer savings; require other wealth-accumulating methods
More emphasis on debt repayment than savings

Whatever your preferred saving mantra might be, the baseline percentage for your savings should fall between 10% to 20%. Any lower than that, and you are endangering your future’s financial stability. If you are able to save more than the recommended amount, the better it is for you. 

Thankfully, the average savings rate of a Singaporean working adult was shown to be 27%. A promising figure.

OCBC Financial Wellness Index 2021

For many, channelling earnings or funds manually into a separate savings account can be a difficult chore. Not because it’s tedious, but simply due to a lack of discipline or self-control. 

This is especially true for many teenagers and young adults entering the workforce. Receiving that first paycheck from your job feels so sweet. The compulsion to spend it all immediately can be strong, maybe even overpowering.

💡 Pro-tip: Set a fixed amount to save every month.

This will also give you an estimate of the amount you’ll save by the end of each year. Seeing values written or typed down may help you stay on track towards your financial goals. Also, give yourself some leeway in case of emergency situations. 

In other cases, poor saving habits might stem from poor financial knowledge and acuity. We mean, how many are aware of the differences between high-interest savings accounts, endowment plans, fixed deposits and others?

Depending on your budgeting goals, certain savings tools are more effective in assisting your objectives than others. It pays off (literally) to take some time to research which method best meets your needs.

Where possible, automate the dedicated portion of your income flow into your savings.

2. Shift towards conscious spending 

In a digital world dominated by e-commerce and non-stop retail campaigns, it’s so easy to go down the rabbit hole of online purchase after purchase, especially when there’s a sale every month (11/11, 12/12, etc). 

This increase in disposable income is marked by a corresponding increase in spending pace. 

What do we mean by that? The rate at which we spend our money is at an all-time high.

Why? Because online spending affords us comfort and convenience — the comfort of purchasing while lying down on our beds, and the convenience of doorstep delivery. 

Michael Resnick, senior wealth management advisor at GCG Financial, commented that “people feel a sense of relief coming out of the pandemic and overspend to make up for lost time”.

A notable, resultant phenomenon that occurred in China was "revenge shopping". China is known to occupy the top spot in driving global sales of branded goods. Every year, the richest would splurge nearly US$117,000 (~S$162,000) on all things luxury. 

Similar to the Chinese, Singaporeans are also in the habit of spending money on luxury goods, with the purpose of trying to maintain an image or keep up with their peers.

For example, the same OCBC survey reflected such sentiments among Singaporeans when 15% (over 300 respondents) still felt compelled to spend beyond their means to match up with their friends. Out of which, the guiltiest group of this habit was those in their 30s.

Source: OCBC

Moreover, the average score of all respondents that felt able to spend comfortably was only 60 out of 100. The benchmark set by industry experts was 75.

💡 Pro-tip: In order to save money, stop buying things online or on a whim. One method we like to use is to keep your items in your cart for a few days. If you forget what’s in your cart, you probably don’t like/want/need it as much as you think. 

We know it’s easier said than done, but do not give in to social pressure and buy luxury goods to impress others. 

But how do you differentiate mindful from guilty purchases?

If you’re someone who buys things on impulse and then feels guilty afterwards, here are some steps to take before your next purchase: 

  1. Is this purchase a need or a want? Can you do without it?
  2. If it’s a want, does the purchase align with your lifestyle goals?
  3. Will the purchase contribute to improving your life?
  4. Do you have money left over after buying this item? 
  5. Set a limit to break the guilty spending cycle (e.g. one purchase below S$100 per month).
  6. Open a separate spending account and automatically transfer your allowance from your savings.
  7. Log your expenses in a money-tracking app or tool.

Just like how “you are what you eat”, your expenditure habits can also be a reflection of your internal psyche, and by extension, your financial wellbeing.

If you find yourself spending haphazardly without control, perhaps it’s a sign to reassess your personal goals and priorities.

Related to this topic:
How I Maximise My Savings During the Holiday Season
Cashback vs. Miles vs. Rewards: Which is The Best Type of Credit Card For You?
8 Sneaky Signs That Lifestyle Inflation is Delaying Your Financial Freedom

3. Preventing credit card debt

Owning a credit card is one of the first hallmarks of adulthood. All of a sudden, you have access to this imaginary sum every month that you’re at liberty to spend. However, credit cards are double-edged swords.

If you have too many cards, it’s entirely possible to lose track of which card you’re spending on and forget to pay your bills each month. Because of this, you’ll accumulate credit card debt, which is something you wouldn’t want due to the bank’s cutthroat interest rates. 

For those using credit cards more wisely for major, recurring expenses such as household bills and such, here’s how you can better manage your credit funds.

Recurring expenses can either be fixed (e.g. rent/mortgage, property taxes) or varied (e.g. utilities, groceries). These would constitute needs.

💡 Pro-tip: Outline your monthly, recurring expenses in a budget sheet. Write down an estimated maximum for variable payments, further segregating the bill into their respective categories.

For instance, utilities can be separated into water, electricity, etc. Hence, an estimated maximum amount for electricity might be S$400. 

As long as you plan and pay your bills on time, there won’t be a problem. Without a solid budget or plan, your credit card bill will catch you off guard completely. It only snowballs from there. 

For those who are disciplined, a zero-interest or balance transfer credit card could prove useful. This specific credit card permits you six to 12 months of interest-free spending. Cardholders will need to clear any unpaid amount by the end of this promotional period lest the remaining balance be subjected to regular credit card interest rates of 25.9%.

Find yourself struggling with credit card debt? There are multiple solutions to resolve this. Learn more about what your possible options are to alleviate this debt.

4. Securing an emergency fund

Don’t underestimate the importance of an emergency fund. Generally, an emergency fund refers to accumulating at least six months’ worth of income to help tide you through an unexpected crisis.

As humans, we are wired to constantly think about the present and struggle to see the bigger picture. After all, the only time we ever live is now.

But because you’ll never know what will happen in the future, it’s highly advised to automate the saving process of your emergency fund too. Meaning, apart from the 10% to 20% to your savings, you should have already saved an additional percentage into a separate account as your emergency fund.

Given the nature of emergency funds, they should possess a respectable interest rate and high liquidity. The last thing you want is for an emergency to occur, but realise you don’t have any liquid assets. 

For this reason, high-yield savings accounts (e.g. DBS Multiplier, UOB One) and cash management accounts are usually the go-to options for Singaporeans. Short-term endowment plans may be considered to complement your savings. 

Essentially, cash management accounts are alternative savings accounts managed by your favourite robo-advisors. They offer decent yields and high liquidity. Examples include Syfe Cash+, Endowus Cash Smart, and StashAway Simple.

The cash management account you choose would depend on your preferred portfolio composition and corresponding risk tolerance. 

💡 Pro-tip: Withhold from eagerly withdrawing your year-end bonuses.

Ideally, all your bonuses should be contributed to building your emergency fund or investment portfolio.

It might be tempting, but once you have this emergency safety net set up, you’ll thank your past self for the discipline when you need to pay for something unexpected.

5. Investing in the right stocks

At this point, you should have more or less secured your emergency fund. That said, it’s now the perfect opportunity to delve deeper into making your money work for you.

In this day and age of global inflation, investing is an essential skill to have. Yes, leaving your money in a high-interest bank account is good, but it’s not good enough to beat inflation. 

That being said, you don’t have to be a full-time trader and camp out daily on the stock market. Active trading in stocks and forex can be stressful and time-consuming – which is really unsuitable for beginners. Passive investments (buy-and-hold for long term) and robo-advisors are a good start for newbies. 

A lower risk portfolio composition can consist of (blue-chip) stocks, bonds, preferred shares, or exchange-traded funds (ETFs). ETFs are a basket of securities — or a collection of assets including stocks, bonds, and commodities — that track an underlying index.  

Basically, ETFs reduce the complexity of trading individual securities by compiling them nicely into a group for you. Their units are bought and sold easier, diversify your portfolio, and typically demand lower management fees. Blue-chip stocks are also viable because they’re stable and reputable firms with sizeable market share. This makes investing in them fairly financially sound. 

The best part of all this? Investing in them can take as little as S$100 per month through robo-advisor platforms. Thanks to their ingenuity, robo-advisors are able to assist users in allocating funds across a cohort of assets depending on risk appetite.

💡 Pro-tip: Aim to earn rates of return higher than Singapore’s prevailing inflation rate. For instance, Singapore’s inflation rate currently sits at 5.4% (since March 2022). Hence, your returns should ideally be greater than that. 

Related to this topic:
Investing in Exchange Traded Funds (ETFs): A Newbie’s Guide to Getting Started
Will 2022 be the Year of Streaming Stocks?
This is One S&P 500 ETF You Might Want to Avoid (Invest in an Irish-domiciled S&P 500 instead)

There is no fixed path to post-COVID-19 budgeting

COVID-19 has created two stark dichotomies — those with saving power, and those that live paycheck to paycheck.

There isn’t a guaranteed, one-size-fits-all path to budgeting. Everyone’s budgeting pattern is different due to a myriad of factors like lifestyle, circumstances, resources and more.

Furthermore, everyone has a different endurance for self-restraint and expenditure discipline. Some can tolerate small deprivations over a longer period, whereas others prefer withstanding immense deprivations over short spurts. 

If you identify with the latter, the blitz approach may be feasible. It essentially refers to saving a huge amount of money over a short period of time, often resulting in a significant lifestyle change.

For example, you can set a goal of not purchasing any new clothes for an entire year or perhaps, living on half your income for two years. Whatever your cup of tea is, this approach is demanding. 

Ultimately, access to the right resources will help you attain your desired financial objectives. It’s challenging, but we’re here to help!

Help yourself to better financial shape in the new norm, with SingSaver's all-new Ultimate Savings Guide! Got your free copy yet?

Although she struggles *slightly* in resisting good deals and sales, Emma is on a lifelong journey to understand what financial independence as a Z-llennial means. That said, her inner child is still very much alive… with animals and gaming being her weaknesses.


Use a personal loan to consolidate your outstanding debt at a lower interest rate!

Sign up for our newsletter for financial tips, tricks and exclusive information that can be personalised to your preferences!