Photo: sgCareers

Once known for its high savings rates and disciplined financial habits, Singapore is now facing a shifting reality. In 2024, 60% of workers were living paycheck to paycheck, according to new research from payroll firm ADP. That’s not only higher than the Asia-Pacific average of 48% but also significantly above peers like China, South Korea, Japan, and Indonesia. The change reflects both rising living costs and evolving social priorities, with more Singaporeans opting to spend on lifestyle and experiences rather than long-term savings.

The Cost of Living Squeeze
The financial strain is being felt across age groups, but especially among younger workers. Many cite essential payments—credit card bills, parental allowances, insurance, and investments—leaving little or no disposable income at the end of the month. Rising prices for housing, transport, and imported goods add further pressure.

Even as inflation in Singapore has cooled to a four-year low, structural cost drivers remain firmly in place. According to Numbeo’s mid-2025 data, Singapore ranks fifth globally and first in Asia for cost of living, with an index score of 85.3—up 11% from the previous year. Housing stands out as a major contributor, with resale prices for public apartments rising 9.6% in 2024 compared to 4.9% in 2023.

Purchasing Power Under Pressure
Maybank Research data reveals that real median employment income declined by 0.4% per year between 2019 and 2024, reversing the pre-pandemic growth trend of 2.2% annually. Although wages recovered in 2024, the Ministry of Manpower expects growth to moderate in 2025 due to tariff-related impacts on trade-dependent sectors like wholesale trade and manufacturing. This erosion in real earnings means workers’ purchasing power has shrunk compared to pre-pandemic levels.

Lifestyle Choices and Cultural Shifts
Beyond economic factors, changing attitudes toward money are reshaping Singapore’s financial landscape. Financial planners point to a growing “spend-now” mentality, where luxury goods, overseas travel, and personal wellness are prioritized over retirement savings. Car ownership remains a visible status symbol, despite the Certificate of Entitlement (COE) system often pushing the cost of a vehicle above SGD 100,000 before the car itself is even factored in.

Buy Now, Pay Later (BNPL) schemes are also fueling discretionary spending. Central bank data shows BNPL transactions hit SGD 440 million in 2021—a nearly fourfold increase from 2020—and are expected to make up 6% of e-commerce transactions in Singapore by 2028.

Generational Differences in Saving
Financial educators note that younger Singaporeans have grown up in a more consumer-driven environment, with greater exposure to marketing and social media comparisons. Many do not feel the same urgency to save for traditional milestones like marriage or children, which were priorities for earlier generations.

Some, like 34-year-old Joyce Ang, choose to spend freely while living with parents and having fewer immediate financial responsibilities. While contributions to Singapore’s mandatory Central Provident Fund (CPF) ensure some long-term savings, voluntary personal savings rates are falling.

A Growing “Debt Society”
Wealth managers warn that for many middle-income Singaporeans—the largest demographic—financial discipline is slipping. Some spend not just their current income but commit future earnings to cover lifestyle costs. This trend is especially prevalent among “100% spenders,” those who live without setting aside dedicated savings.

Experts caution that without a cultural shift back toward prudent financial planning, more Singaporeans could face long-term instability, especially as the city continues to rank among the most expensive places to live in the world.

Singapore’s paycheck-to-paycheck trend is no longer just a lower-income challenge—it spans the middle class and even high earners. Structural costs, shrinking purchasing power, and evolving cultural norms are reshaping financial behavior in ways that could have lasting consequences. For a nation long celebrated for its financial resilience, the question now is whether this new “spend-first” mindset will persist—or give way to renewed emphasis on saving in the years ahead.

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