A new study from HSBC has revealed a strong correlation between a “global mindset” and financial fitness scores, with top-scoring groups categorising themselves as “global citizens”.
Singapore residents across the board were found to have a moderate financial fitness score of 66 over 100, with global-minded residents — defined as respondents with children studying abroad or who plan to send children abroad for education; or have properties overseas — achieving a higher score of 69 over 100 on average.
The HSBC FinFit Index measures the financial fitness of Singapore residents based on four criteria — financial habits, financial knowledge, financial security & safety and financial planning — which supposedly shows a “strong correlation” to an individual’s level of satisfaction in relation to their quality of life, well-being and retirement confidence.
The study was conducted from Dec 2, 2021 to Jan 12, 2022, and surveyed over 1,100 respondents residing in Singapore including employment pass holders.
According to the index, 30% of Singapore residents are considered “very fit” with a score of 80 or above, while 48% of those surveyed are considered “moderate” with a score of 50 to 79 and 22% are “unfit” with a score below 50.
The study also found that 67% of residents with an “international mindset” also engage with more active financial planning compared to only 49% of those without overseas interests.
HSBC says the survey reveals that respondents with a higher FinFit score tend to be more knowledgeable about financial products, do more research before making any investment or wealth commitments and deploy more methods to educate their children about financial management.
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Alice Fok, head of customer, international and marketing, HSBC Bank Singapore says: “We see a strong link between having an international mindset and better FinFit score. A possible reason could be having the desire to study or invest overseas forces one to remain disciplined in saving and planning their finances to meet these goals.”
Surprisingly for global-minded respondents, the bank notes that despite their global exposure and investment experience, only 68% of these Singapore residents have a sense of financial security — lower than 77% of those with lower international exposure. This is especially in terms of cyber security which includes the sharing of personal, credit card or banking details via social media, unfamiliar online shopping platforms or public Wifi networks.
“While being disciplined about their expenses and savings is a good base to start off, people in Singapore need to make a concerted effort to do more active financial planning as it will help them be more financially resilient,” she adds.
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Meanwhile, the survey also shows that 66% of Singapore residents have experienced “money worries” in the past six months, leading to 46% of respondents suffering from anxiety while more than 1 in 3 have trouble sleeping. A majority 60% of respondents reported experiencing the financial concerns of dealing with unexpected expenses, education fees for children and supporting their parents financially.
Says Fok: “When it comes to managing your money, inertia is our greatest enemy. Active financial planning can help you make the most of your assets and generate better long-term returns than keeping cash in the bank.”
According to her, a good starting point for novice investors would be to use financial planning digital tools to learn more about investing and applications such as HSBC’s FinConnect to obtain a clear view of your total assets and liabilities in Singapore.
She notes that new investors should also work with a trusted financial advisor to better understand their risk tolerance level and map out a holistic plan that can meet their long-term financial goals.
