5 ways to cut spending in 2024 (without feeling the crisis)

Let’s face it, Singapore is not known for being cheap. With a 9% GST and ever-increasing costs for food, transport and housing, we need to be more strategic with our money.

To make matters worse, our wages just can’t seem to keep up. Inflation is at a multi-year high, effectively shrinking the value of our hard-earned dollars. In 2023 alone, Wages in Singapore fell by 1.5%– although there is some hope that they will increase by 0.5% in 2024.

Most of us want to reduce our expenses and increase our savings accounts. Survey by YouGov Singaporeans found that over half (53%) want to manage their money better this year. But that’s the point. I want to save, but I don’t want to feel deprived or lower my standard of living. This requires some creative budget management strategies.

Here’s my 5-step plan to cut your spending in 2024 (without feeling miserable).

1. Switch from cafe hopping to street vendor hopping

Brunch is nice, but have you seen the prices at some of these cafes? Some places charge over S$30 for a dish you can make at home. Plus, many places sell similar dishes (I’m sick of “truffle” fries).

I can happily do without brunch in a café or at least limit it. But I still want good coffee.

While I can afford gourmet coffee at cafes, I certainly can’t afford it every day as a cup of latte costs at least S$5. Also, some places charge VAT and service fees even if you take the cup with you. Oh well.

At least there are more coffee options now as ‘Atas’ coffee stalls are opening in hawker centres. Thanks to a new generation of hawkers like Generation Coffee, Coffee Break and Kopifellas, I can get my café-style coffee at non-café prices. Some of these hawkers even offer drinks like matcha latte and cold brew.

The alternative is to switch to a local coffee shop, but if you’re craving a full-bodied espresso, nothing beats a coffee made by a barista who knows his craft.

Here is a quick comparison:

Switching to Kopi can save you up to S$5.70 each time. But of course, it’s not the same. If you get a latte from a new-age retailer, you can save up to S$3.50 and get something of similar quality. Multiplying that by 7 (one coffee a day) works out to a saving of S$24.50 per week.

2. Cancel my under-used subscriptions

It’s high time I reviewed my subscriptions to various services. We have so many subscriptions these days that it’s quite likely that we’re paying for many that we barely use.

The story continues

Think about the services you use daily and those you use a few times a week and evaluate whether they are really necessary. Maybe you signed up just to get the first free trial period and forgot to cancel it, or simply didn’t have time to watch the show you wanted to watch.

Of course, there are essential services you use every day to stream music or watch TV shows, but do you really need another subscription to more than one video-on-demand service when you don’t have time to watch shows?

Here’s how much some popular subscription services cost and how much you can save by canceling subscriptions to services you don’t use:

If you give up five of them, you can end up saving more than S$50 each month.

3. Getting the most out of my salary

Our salary makes up the majority of our income, and it makes sense to maximise our salary and get a little more out of it. Unless you’re looking for a new job or asking for a raise (which is almost impossible in this working climate), you can conveniently and risk-free deposit our salary into a savings account that offers you bonus interest on it – such as the OCBC 360 account.

As long as you transfer your salary of at least S$1,800 to your OCBC 360 account via GIRO/FAST/PayNow via FAST, you will earn 2.00% interest per annum on the first S$75,000 and 4.00% on the next S$25,000.

Additionally, if the average daily balance increases by at least S$500 each month, you will receive an additional 1.50% effective interest rate on your first S$100,000.

The account also offers a base interest rate of 0.05% per annum, bringing the total interest rate on your first S$100,000 to 4.05% per annum.

Let’s say I credit my net salary of S$4,000.

This is what it looks like in the first month*:

Credit a monthly net income of S$4,000 to the 360 ​​account

Interest income = S$6.95

This is what it looks like after 12 months*:

Monthly net income of S$4,000

+ Increased my average daily balance by at least S$500 monthly

Interest income = S$132.48 per month

With S$132.48 per month, I could potentially pay my phone bill (~S$20), subscriptions (S$13.98 for Netflix), and even my electricity bill (~S$95).

*The figures are from The OCBC interest calculator

Would you like to double your salary bonus?

Apply for a 360 account from 1 April 2024 to 31 May 2024, to 4.0% per annum Interest rate on the first S$75,000 balance during the first 2 months after account opening.

Terms and Conditions Insured by SDIC up to S$100,000.

4. Take public transport instead of taxis unless absolutely necessary

I’ve convinced myself that it’s perfectly fine to spend money on Grab rides since I only commute to the office twice a week. But the high prices during morning rush hour are no joke, and I’ve become so used to the convenience of the rides that I somehow find myself taking taxis way too often and spending way too much.

A quick look at my Grab account shows that I’ve been at platinum level for 2 years! (OK, that includes my food delivery spending, which I should definitely cut down on too.) Although public transport prices have gone up, so have ride-hailing services. Such rides are a luxury that I only use when I’m out super late after public transport has stopped running, or when I’m in a really crappy place.

Let’s say I ride Grab five days a week and each ride costs an average of S$20. That adds up to S$100 per week.

That’s S$5,200 per year – roughly the average monthly salary of a Singaporean!

5. Use a holistic savings account to earn bonus interest

Besides simply transferring my salary, friends advised me to use a high-interest bank account to boost my income. At first, it didn’t seem like much, but I realized that if I met all the criteria, it could add up to quite a lot per month.

By spending, saving and contributing my salary to just one account – the OCBC 360 account – I can realistically earn up to 4.65% interest per annum on the first S$100,000.

This is what it could look like for 12 months*:

Deduct monthly net income of S$4,000 | Total: S$48,000

Increase the daily average by S$500 per month

Spend at least S$500 each month with selected OCBC credit cards

Total interest = S$156.94 per month.

*The figures are from The OCBC interest calculator

But that’s not all. There’s even more interest to be earned if you can meet the bonus categories:

• Buy a qualifying insurance product from OCBC – earn 1.5% interest per annum on your first S$100,000

• Buy a qualifying investment product from OCBC – earn 1.5% interest per annum on your first S$100,000

• If you meet all of these categories, you can earn up to 7.65% interest per year on your first S$100,000

Since most of my money is in one account, it is also much easier to monitor and keep track of my spending.

Some people worry that keeping all of our savings in one place increases the risk of fraud. But don’t worry, there are safeguards in place. OCBC has a feature called “Money Lock” that allows us to lock some or all of our funds in our 360 account to protect against fraud. And even if our money is locked, we will still receive interest.

So the flexibility and convenience of letting your money grow safely without doing anything for it is all well and good. But the most important thing is still to reduce expenses and maximize our income this year due to the increased cost of living. But with a solid game plan, we don’t have to reduce our quality of life or feel deprived.

This post was written in partnership with OCBC. While we are financially compensated by them, we still strive to maintain our editorial integrity and review products with the same objectivity. We are committed to providing you with the best information so you can make personal financial decisions with confidence.

Any opinions or views expressed in this document are those of the third parties mentioned and do not reflect the views of Oversea-Chinese Banking Corporation Limited (“OCBC Bank”, “us”, “we” or “our”).

Content sponsored by OCBC

Terms and conditions apply. Singapore dollar deposits from non-banks and Singapore dollar funds and deposits under the Supplementary Retirement Scheme are statutorily insured by the Singapore Deposit Insurance Corporation up to an aggregate amount of S$100,000 per depositor per Scheme member. Singapore dollar funds and deposits under the CPF Investment Scheme and the CPF Retirement Sum Scheme are aggregated and separately insured up to an aggregate amount of S$100,000 per depositor per Scheme member. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.

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Original article: 5 ways to cut spending in 2024 (without feeling the crisis).

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