Being the sole breadwinner can’t be easy for anyone. Supporting an entire family’s monthly expenses is a whirlwind of financial and emotional difficulties.
We all know how tough it is to be the sole breadwinner — supporting an entire family to have a roof over their heads, put food on the table, and have enough leftover expenses to improve their quality of life.
The reality is, many single-income families struggle to break even, with some even barely scraping by. Yet simultaneously, the majority of Singaporean households live a generally comfortable life. They’re able to withdraw and spend money whenever they please and not have to worry about a negative bank balance.
As complacent as that sounds, we can’t blame them either. These households typically consist of dual-income parents with kids, or even better, dual-income parents with no kids (DINK). With double income streams, financial concerns are more equitably distributed across both individuals. The burden is not entirely laid on a single person’s shoulders to bear.
But what if you don’t have this dual-income privilege? What if you belong in the minority statistic of a single parent supporting your kids, and maybe even your own parents? How then?
- Resetting financial attitudes
- Setting achievable, quantifiable goals
- Splitting income into categories
- Re-evaluating insurance policies
- Increasing income channels
- Clearing debt
- Public rental household subsidies
- Other governmental assistance programmes
1. Resetting your financial attitudes
For the most part, it’s said that our mindset determines our success. In fact, some might even claim that success absolutely hinges on it.
This principle applies to all areas of our lives: finances, career, love, family, and more. While we can’t control life’s circumstances, we can control our attitude and reaction toward these external stimuli.
The first part of navigating as a single-income individual is to acknowledge it. Take as long as you need, especially if you’ve just exited a seemingly financially-stable but toxic relationship. If you have children, the stigma of a single parent “being poor” can be a tough pill to swallow and make you feel overwhelmed.
However, the important takeaway is to not succumb to these debilitating thoughts of self-doubt. Instead, re-configure those fears of financial insecurity into empowering ones. You have to stop limiting your capabilities and see your capabilities to earn.
Once that cog in your brain clicks, that self-assurance begets self-confidence, and that translates into you valuing your skillset and self-worth much more. In turn, this will also affect your relationship with money — allowing you to take control of your finances with greater confidence.
2. Set achievable, quantifiable goals
The next phase in your money-making journey would be to establish quantifiably-achievable goals. Without a solid objective in mind, you won’t be able to set a concrete plan to work towards.
For instance, aspiring to be rich versus wanting to achieve a net worth of S$500,000 by 45 are two different goals. Or perhaps you want to own a 4-room resale flat versus apportioning S$350,000 to fund your apartment hunting are also two different benchmarks to hit.
With visible figures written down, it materialises the amount needed and deconstructs the goal into feasible milestones. Overall, the more realistic or specific these goals are, the less daunting they’ll be to achieve.
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3. Splitting income into different categories
Once you have your monetary objectives decided, you’ll have a clearer picture of how to segregate your single income stream more effectively.
Growing up, you probably had one bank account set up by your parents on your behalf. But upon hitting adulthood, opening several savings accounts would be your safest bet to apportion your income into specific categories; and not just any savings account, high-yield savings accounts offering decent liquidity for any emergency withdrawals would be most ideal.
If you’re familiar with the 50/30/20 budgeting rule, the principle advises people to split their expenses into the following:
- 50% for necessities
- 30% for wants
- 20% for savings
After you’ve nailed the income breakdown, it’s time to redirect them into different accounts. For example, you could have three accounts in total.
First account: Daily expenditure
Daily expenditure typically refers to necessities such as groceries, toiletries, and public transport. These costs incurred tend to be non-discretionary in nature, where you’ll need them to survive on a daily basis.
Of course, within this category, there are ways to save further like opting for a travel concession pass if you commute to work every day. But in general, they are daily recurring expenses that are unavoidable.
Second account: Monthly salary
Setting up a second account specifically for crediting salary is good for those struggling to be disciplined with savings. By automating the process, a pre-determined amount of your monthly income can be streamlined into this account to ensure you don’t spend it.
In essence, it forces you to save better and make better purchase decisions since your expenditure leeway is reduced from the get-go whenever payday rolls in.
Not to mention, many savings accounts reward users with higher interest rates for crediting their salary and using an eligible credit card or satisfying other categories from the bank.
|Bank||Base interest rate||Monthly transactions / Account balance||Income + categories|
||0.05% p.a.||Monthly transaction
$30,000 and above
|Income + 1 category: Up to 1.3% p.a.
Income + 2 categories: Up to 2.8% p.a.
Income + 3 categories: Up to 3.8% p.a.
||0.05% p.a.||Account balance
S$75,000 and belowS$75,000 and above
Income/GIRO + credit card: Up to 2.5% p.a.
Income/GIRO + credit card: 0.05% p.a.
||0.05% p.a.||Monthly transactions
S$75,000 and above
|Income: Up to 0.7% p.a.
Income + save: Up to 0.98% p.a.
Income + save + insure / invest: Up to 1.68% p.a.
Income + save + insure + invest: Up to 2.38% p.a.
The common thread running through all of them is the number of conditions needed to be fulfilled before scoring higher interest. Otherwise, the base interest rate remains at a measly 0.05% p.a.
Examining these three examples, UOB One possesses the simplest mechanics necessary in order to level up in the interest tier. All you need is to tag an eligible UOB credit card to the account and you’ll already earn a guaranteed 0.25% p.a.
Supplement your salary credit into the mix and this guaranteed interest is bumped up to 2.5% p.a. until you reach S$75,000 in account balance.
While OCBC 360 and DBS/POSB Multiplier offer a higher potential interest rate, there are two things to note:
- These accounts operate by monthly transactions, not account balances.
- These accounts have more complicated requirements or conditions for users to satisfy for > 0.05% p.a. rates.
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Of course, these aren’t the only savings accounts out there. It’s up to you to research more and ultimately decide which account and its prevailing requirements best match your needs and lifestyles with as minimal effort as possible.
Third account: Miscellaneous saving goals
For this third account, a savings account would still be applicable but we’d actually recommend using a fixed deposit or endowment plan instead. Why? Theoretically, they demand lower minimum funds to start and reward users with relatively better interest rates for locking in long-term savings over a course of a few years.
Usually, the intent behind these saving goals comprises objectives like saving for your child’s future education, future mortgage payments, personal retirement, and so on and so forth. Hence, high liquidity isn’t a priority here.
Funds saved for these purposes should be left untouched in the chosen account until the tenure expires. Only then, should the amount be withdrawn.
Fixed deposits are great for those with a substantial amount of money to deposit. The returns are guaranteed and it offers flexibility on the plan’s tenure. It’s one of the most straightforward ways to earn interest on long-term savings.
There are two types of endowment plans: participating and non-participating plans.
Non-participating plans offer sum assured (or guaranteed benefit sum) upon tenure expiry but don’t entitle policyholders to any potential profits that the insurance company earns.
On the other hand, participating plans do.
Apart from 100% of your capital guaranteed upon maturation, participating plans may reward policyholders with potential profits (non-guaranteed benefit sum) earned from the insurer’s fund. This can come in the form of reversionary bonuses, dividend payouts, or terminal bonuses if the insurer’s funds perform well.
Reversionary bonuses are unique because although they are technically classified as non-guaranteed, they become guaranteed as part of the sum assured once the bonus is declared.
Subsequently, the bonus is categorised under your policy’s guaranteed benefit sum. This declaration happens on a fairly regular basis (e.g. annually).
In order to know which scheme is most suitable, have a clear vision for your saving objectives and assess an appropriate plan tenure from there.
4. Re-evaluate your active insurance policies
Don’t get us wrong. Having sufficient insurance coverage across the different components is vital. It is very important and should be one of the priorities for single-income households.
This is because you wouldn’t want to be caught off-guard for sudden illnesses or mishaps without any coverage. This would result in you having to pay for uninsured medical bills and other expenses straight from your already compromised wallet. It would only jeopardise your funds further.
However, we get it. Insurance premiums do rack up, and it can be difficult paying the monthly or annual premium each time. Nonetheless, insurance coverage is something that everyone needs. So how do we arrive at a comfortable bargain?
To address this, the two types of insurance in question are term life insurance and medical insurance.
Term life insurance
Term life insurance refers to life insurance that covers the individual over a fixed duration — usually until the age of 75. In the event that the policyholder suffers from a terminal illness, total permanent disability or passes away before 75, their surviving family members will be assured a lump-sum payout.
This ensures that your family is financially protected and provided for in your death, minimising the potential financial liability incurred by your passing. Ensure that you remain insured for this.
Medical insurance is another insurance pillar that Singaporean households will be covered for. All Singaporeans and PRs are entitled to basic health insurance — MediShield Life — which covers public hospital treatments.
Upgrade your MediShield Life with an Integrated Shield Plan (IP) and you’ll receive greater coverage for costlier hospital bills, better class wards, private hospitals, pre- and post-hospitalisation care, and better outpatient treatment options overall.
Therefore, with the base medical coverage provided by the government, sole breadwinners can at least be semi-relieved. However, the fact of the matter remains that most Singaporeans opt for either rider options or additional health insurance. But would that be necessary if you’re financially tight?
As a working employee, chances are your company might provide complimentary health insurance. An example of this would be the AXA Better Me policy.
Under this plan, staff members are entitled to an annual coverage of up to S$1 million for Group Hospital and Surgical plans. Moreover, most employees will also be eligible for personal accident, term life and critical illness coverage on top of the medical coverage. In some cases, the policy’s coverage can be further tailored to suit individual and family needs with add-on options.
The additional coverage afforded by your company’s health insurance may be enough to compensate for the protection gaps between your existing coverage and projected costs.
5. Boost your income and/or find supplementary channels
This is a no-brainer to anyone short on cash but the problem probably lies in not knowing where or how to start. Whether it’s mustering up the courage to negotiate a pay raise from your bosses or simply finding a better salary elsewhere, increasing your income stream is no easy task.
Bottom line is, depending on a single source of income is too volatile and risky. You’ll never know when your role might be suddenly upended (especially in view of an impending recession) and you’re left unemployed.
Don’t want to be left defenceless? Then this is your sign to start investing more and find other side hustles on the down-low. But we don’t mean just any form of investing; you should aim towards attaining passive income through your investments.
Earning passive income through a portfolio is arguably one of the best and most stable options to earn extra money, period. Apart from the initial action, minimal effort is needed thereafter to maintain it in the long run.
Among these few, blue chip stocks, bonds and REITs have more stable, low-risk profiles.
Having a diversified portfolio consisting of exchange-traded funds (ETFs), unit trusts, bonds, blue chip stocks, and real estate investment trusts (REITs) are some recommendations for beginners to consider.
Related to this topic:
How to Build a Passive Income Portfolio Using ETFs (And Why You Should)
A Complete Guide to Real Estate Investment Trusts (REITs), And Whether You’re Ready For It
8 Ways to Accelerate Your Wealth in Singapore
A Recession is On Its Way — Here’s How You Can Protect Your Investments
Best Places to Put Your Money During a Recession
Build your investment portfolio with knowledge and confidence. Follow our step-by-step beginner’s guide to start now!
6. Prioritise clearing your debt
Having debt can be a crippling state to be in; you’re constantly chasing after monthly repayments in a bid to avoid incurring interest or late charges. Whether it’s a personal loan, a home loan, car loan, credit card loan or anything else in between, keeping tabs on each debt is stressful.
For those with multiple concurrent debts, the first order of business would be to review them.
Identify your sources of credit and reduce the number of credit facilities where applicable. Setting up a GIRO to automate each billing ensures no payments are accidentally missed out.
If you can afford it, try to marginally increase your repayments each time — or better yet, make a lump sum payment if you have extra cash to spare. You want to clear your debt as quickly as possible. Before doing so, however, check for potential penalty charges or contact your bank in advance about this.
And most importantly, always target the debt with the highest interest rate.
For those struggling, a debt consolidation plan is also a possible avenue.
This refinancing tool allows you to combine all existing debts into a single loan with lower interest rates. The only major pitfall with debt consolidation plans is that banks might not approve those with a poor credit score. Singaporeans and PRs with a decent credit score and above will be favoured.
For more information on debt consolidation, refer to this FAQ page.
7. Take advantage of increased subsidies for public rental households
To give second-timer public rental flat households with young children a chance to own a house again, the Housing and Development Board (HDB) will be providing a S$15,000 increase in their Fresh Start Housing Grant from S$35,000 to S$50,000. Eligible households can buy either a two-room flexi or three-room flat.
Originally introduced in 2016, this rental scheme is aimed to assist families with young children living in rental flats to re-purchase their own flat — especially for those who fail to qualify for other housing subsidies since they’ve already received it once.
Eligible families will receive an upfront disbursement of S$35,000 upon key collection, and the remaining S$15,000 into their Central Provident Fund Ordinary Account (CPF-OA) in equal tranches over a period of five years.
Families now also have the option to buy flats with lease lengths between 45 to 65 years in five-year increments. They also have a minimum occupation period (MOP) of 20 years to assure stable living conditions for these families.
Although these leases are shorter than the typical 99-year BTO lease, this housing grant provides much-needed financial relief and maximises your budget for other essential expenditure elsewhere.
Related to this topic:
Should You Invest Your CPF Ordinary Account (OA) Money?
5 Things to Consider Before You Invest Your CPF
What Can CPF Be Used For, Aside From Supporting Your Retirement?
How To Build Sustainable Retirement Income With Your CPF Money
CPF Basic Retirement Sum: How to Maximise Your Retirement Payouts
8. Other governmental assistance programmes
Don’t be afraid to seek out other eligible government initiatives for financial aid. Initiatives such as the ComCare Short-to-Medium Term Assistance (SMTA) help provide temporary financial support to lower-income individuals and families or those struggling with finding employment.
Benefit payouts under this scheme offer assistance in monthly cash for living expenses, household bills (e.g. rental, utilities, service, conservancy charges), medical support, and finding job opportunities or relevant training.
More recently, this social support scheme also received a boost as part of the S$1.5 billion support package announced back in June. A one-person household under long-term assistance (LTA) will receive an enhanced cash bonus of S$640 from the original S$600. Households with more members can expect to receive more.
According to the application guidelines, applicants must have a monthly household income of S$1,900 and under or a monthly household income per capita of S$650 and below.
Regardless, even if your income exceeds these figures, applicants are welcome to approach a Social Service Office for further assessment. They will review such applications on a case-by-case basis.
Remembering who you’re doing it for
The journey to financial stability as the sole breadwinner is long and tumultuous. It feels like you’ve got the entire world on your shoulders with no end in sight. But at times like these, it’s important to remember who you’re doing all this for.
All the hardships and struggles would’ve all been worth it if it means your family has a roof over their head and a bed to sleep in at night.
We’re not going to sugarcoat things and say that help is freely available at the snap of a finger to alleviate your financial burdens, but there are various initiatives and communities ready to land you a helping hand. So reach out to these resources as best as you can.
Help yourself to better financial shape in the new norm, with SingSaver’s all-new Ultimate Savings Guide! Got your free copy yet?
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By Emma Lam
With a minor problem of ‘itchy fingers’ for flash deals and sales, Emma is on a lifelong journey to understand what being financially independent in adulthood means. That said, her inner child is still very much alive… with animals and gaming being her weaknesses.