Singapore Census: Household Incomes Higher, But Does More Money Mean More Problems?

Alevin Chan

Alevin Chan

Last updated 22 June, 2021

Ultra high income earners can suffer from the same problems as the rest of us. Here’s why and how.  

The latest Singapore population census had some pretty encouraging findings. Encompassing some 150,000 households across the island, the census revealed that household incomes have increased over the last 10 years. 

This was on the back of a trend of married couples with both partners holding down full-time jobs, with the increase present among all ethnic groups. 

The report also stated that median income per household member from work increased 2.8% in real terms, from S$1,638 to S$2,463, after accounting for household size. 

Now here’s where things get interesting. 

The overall proportion of Singaporean households earning S$9,000 or less dropped from 59.8% in 2010 to 42.5% in 2020.

Given that household incomes saw a net gain, where did the rest of the wealth go?

It went towards creating richer Singaporeans. 

More Singaporeans moved into higher income brackets

You see, the survey revealed a higher proportion of Singaporeans moved into higher income brackets in the intervening decade. 

From 2010 to 2020, households earning S$9,000 or more in monthly income grew from 29.7% to 44.2%.

And if you’re looking for anecdotal evidence that “the rich get richer, like, all the time”, the census found that the share of households earning at least S$20,000 per month more than doubled – from 6.6% to 13.9%.

By any economic measure, that’s a Grade A on Singapore’s report card. After all, a prosperous population tends to emerge in a well-run country. 

But is everything as hunky dory as it seems? If you’re halfway to being the Crazy Rich Asian in your cohort, surely life must be easy-breezy for you right? Or is it a case of “mo’ money, mo’ problems”?

The truth: 1 in 2 high income earners have a debt problem

Having a high income doesn’t automatically save you from money problems.

Surprised? We know we were when we learned that 1 in 2 high income earners reported having money issues. 

This was discovered via a poll conducted by wealth management company St James Place (SJP). It surveyed 1,000 Singaporeans aged 25 to 54 with monthly salaries starting from S$6,000 a month, and up to S$20,000 or more.

We know, we know. If you’re earning almost four times the national median salary, how could you still be struggling? If S$20,000 a month isn’t enough, then how about the rest of us common folks?

Ok, let’s calm down for a moment and investigate this issue in a rational, serene and thoughtful manner.

It turns out, there’s a huge difference between having a high income and being rich. And being truly wealthy has less to do with how much money you earn, but more to do with what you actually do with the money you have. 

The Straits Times article that references SJP’s poll pointed out five main reasons why a salary that puts you in the top 1% of the global population could still be (somehow) not enough.

They are:

The lesson here is that money can be a double-edged sword and you’re not necessarily better off for having more of it. 

Classic problems dressed up in new clothes

Lifestyle creep

SJP found that almost 50% of survey respondents struggled to keep up with their expenses, while about one-third said they couldn’t control their spending. About 20% of them also said they had large debts.

It’s a classic case of lifestyle creep, where your tastes and preferences change to match what your money can buy. 

Suddenly, the hawker food you grew up eating is too unhealthy and greasy to eat. No sir, give me that S$30 plate of fresh hand-rolled pasta with pan-seared foie gras on the side, never mind the massive amounts of fat, cholesterol and salt present in such a meal. 

So, earning a high income doesn’t stop you from taking on million-dollar mortgages and hundred-thousand-dollar car down payments, and nor does it save you from underestimating your ability to pay off your debts.

The only solution here is the awareness and discipline to live within your means. This means working out a budget and sticking to it. 

If, despite your best efforts, debt starts to pile up, ignoring it will only make it worse. Instead, promptly create a payment plan and stick to it until you’re debt-free.

And before buying that fancy home or sports car, draw up a financial forecast (feel free to outsource to your advisor for help) to ensure your ability to pay for it, and work out a contingency plan in case something goes wrong. Life’s circumstances are always changing, after all.

Failure to plan is planning to fail

The survey also found that over a third of respondents pointed to having to take care of elderly parents or support young siblings as the reason for their money issues.

Additionally, 40% of the high-income earners polled said they didn’t see the need to plan for the future, believing instead that they would continue working and earning a high income all the way through. 

Well, the thing is, life has a habit of throwing us curve balls, such as family members that require financial support, or pandemics that wipe out entire industries (along with your cushy, high-paying job) in one stroke.

When facing such difficult situations, a bit of planning goes a long way.

Say your dad is retiring next month with little to no personal savings, and you’ll need to shoulder the costs of his living expenses and medical care. Buying insurance right now would be too costly, if he even manages to qualify for the cover he needs in the first place. 

However, if you’d had a frank discussion about this 10 or 15 years back, you could have started an endowment fund then that could be used to finance his retirement. 

Same deal with the sudden loss of your job. Instead of spending everything you have because you believe more money will show up tomorrow, learn to set aside a portion of your paycheck. 

Start by saving up for an emergency fund that will pay for at least six months of your living expenses. 

Next, look into investments that provide a balance of returns and liquidity (such as a robo adviser) so you can outstrip inflation, get rewarded for saving money, while still having easy access to your funds.

It never hurts to save up for a rainy day, even if you’re raking in a hefty paycheck today. Better financial management can go a long way in making your money work harder for you and safeguarding your future.

Read these next:
5 Essential Tips To Get Rid Of Debt As You Enter 2021
Best Savings Accounts in Singapore to Park Your Money (2021)
Investment Guide: SingSaver’s One-Stop Investment Shop
Money Confessions: 9 Singaporeans Share Their Portfolio Asset Allocation
Best Credit Cards To Power Up Interest Rate On Your Savings Account (2020)

An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.


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