To feel financially free, the average consumer in Singapore would have to save at least $1,733 per month over approximately 27 years to accumulate a median savings of $566,640, according to a survey conducted by financial services company Singlife.
Singlife’s inaugural Financial Freedom Index, which involved 3,000 Singaporeans and permanent residents aged 18 to 65 found that over half of respondents need at least $500,000 to feel financially free.
According to Singlife, there are three distinct consumer groups in Singapore based on their current levels of financial freedom.
The financially free accounts for 29% of the surveyed population, with an average monthly personal income of $9,067. The everyday consumer accounts for 54% of the respondents, with an average monthly personal income of $5,652. The financially constrained, which accounts for the remaining 17% of those surveyed, have an average monthly personal income of $3,442.
The survey also identified six key themes of financial freedom — retirement, income, spending and saving, managing recurring expenses, managing unexpected events as well as giving back to society. The ability to retire at any time and having enough money to give back to society were ranked as the top two indicators of financial freedom.
Additional insights from the Singlife Financial Freedom Index indicate that while 73% of consumers acknowledge the importance of financial freedom, only 29% feel that they have actually achieved it.
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“More than half of consumers are uncertain how to attain financial freedom. This highlights the need for more personalised products and services that can better support consumers in their journey towards financial freedom,” says Singlife group CEO Pearlyn Phau.
Consumers consider savings a crucial factor in their pursuit of financial freedom. Around half of them save approximately $3,000 or less per month, while 25% save $1,000 or less per month.
Financially free individuals save 51%, or roughly three times more than the average consumer, with average monthly savings of at least $4,629. Everyday consumers save 45% of their monthly personal income, resulting in an average monthly saving of at least $$2,593. The financially constrained save 50% of their monthly personal income, resulting in an average monthly savings of at least $1,728.
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To note, both the financially free and the financially constrained groups save more than 50% of their monthly personal incomes, despite the difference in income levels.
Within the financially free group, 38% feel comfortable spending on their needs and wants, while the figure is slightly higher at 43% for the everyday consumers group. This indicates that a higher proportion of financially free individuals exercise greater prudence in their spending habits compared to everyday consumers.
Additionally, the survey revealed that 80% of the financially free individuals feel confident in their ability to pay off monthly bills. In contrast, this confidence is reported by 51% of everyday consumers and only 39% of financially constrained individuals.
