Singaporean money-saving guide | Unique Money Saving Hacks for Singaporeans

by Priyadarshini 11 November 2022

Singaporeans love adding money to CPF Special Account. Here are a few things only Singaporeans can relate to when it comes to accumulating wealth. In this blog, we give you a Singaporean money-saving guide

Singaporean money-saving guide

Supplement CPF Special Account (SA)

Our CPF SA is for our retirement, and the money we deposit into it will be deducted from our pension. The Retirement Sum Topping-up Scheme (RSTU) encourages us to top up our CPF SA for two reasons:

Get 4% returns on your CPF SA money to earn higher returns. How else would you get a risk-free 4% return? In addition, you will receive an additional 1% interest on the first S$60,000 of your combined CPF balances.

To get tax relief, you can top up your CPF SA with cash and receive up to S$7,000 in tax relief. When you top up your spouse’s CPF SA, you get an additional S$8,000 tax break. When you top up both your and your spouse’s CPF SA, you can receive up to S$16,000 in tax relief.

Purchase a home (BTO) before getting married

Applying for an HDB Build-To-Order (BTO) flat as a couple — Singapore’s version of a proposal. Romantic? No. Practical? Yes. Obtaining a BTO flat expedites your path to becoming a property owner in Singapore, which is an unattainable goal for many in countries such as Hong Kong. Don’t forget that your property is part of your financial assets and net worth, with the potential to sell it for a profit in the future due to property appreciation—assuming, of course, that you meet the minimum occupation period (MOP).

Request Priority Banking

Priority banking is one of the best ways to grow your wealth. In exchange for transacting in large amounts with the bank of your choice, you will be rewarded with the best perks on the market. Having said that, banks typically require a minimum amount of assets under management ranging from S$100,000 to S$500,000 (AUM).

It may be a significant sum for many, but you will reap numerous lifestyle and financial benefits. Consider exclusive discounts at your favourite restaurants, airlines, and grocery stores, free airport lounge access, and 24-hour access to a dedicated Relationship Manager who can provide insights and financial advice for your investments.

Dividends can be obtained by investing in Real Estate Investment Trusts (REITs)

Singapore is well-known as a REIT haven. There are currently 42 REITs listed, accounting for more than 10% of SGX’s market capitalization of S$90 billion. Singaporeans buy REITs because of their high yield. These yields can range from 5% to 9%, making them an excellent addition to an income-generating portfolio. This yield is derived from REITs distributing at least 90% of their taxable income; income earned through the rental collection.

Contribute a portion of our earnings to the CPF

If you mention Singaporeans and money in the same sentence, you can’t avoid CPF. Every month, we are required to contribute a portion of our salary to our CPF. If you are under the age of 55 and a Singaporean, you contribute 20% of your salary to your CPF, while your employer contributes an additional 17%. This salary allocation decreases as you reach the age of 55.

Donate money to receive tax relief

In terms of tax relief, making donations can provide you with the same benefit. To be tax deductible, our contributions must be made in cash to an approved Institution of a Public Character (IPC) or the Singapore Government for causes that benefit the local community. Qualifying donations are tax deductible at a rate of 250%. For example, if you donate S$5,000, your tax deduction is S$12,500. This reduces your tax assessable income for the year by S$12,500.

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