Saturday, January 21, 2012

66% of S'poreans save Less than 20% of monthly salary

A paycheck survey by a job related site is better than one from a financial institution which i doubt. Many people exchange their life for a paycheck so doesn't it make sense to save as much as comfortably possible for investment purposes so that the 'money tree' will take care of us in old age?

Survey has also confirm what is mentioned in a few personal finance books that spending rises with more income. In the end the % of income saved is still the same despite a bigger paycheck- a trap many fall into. To be ahead of the masses one has to increase the % of income saved with a bigger paycheck while maintaining or a slight increase in expenses.

Another reason is that people earning more has to keep up with appearances. Extra monies earned go into paying for these ongoing operating expenses so % of savings remain the same. Fine example i can think of are those sinkies buying a car for 'face' value in front of others once they got promoted/pay raise. How many would dare ride a bicycle to work compared to caucasians bicycling to work?

Saving >50% of my takehome paycheck is a norm for me. I simply hated the idea of not having enough reserves in case of unforseen circumstances. I also hated being constantly 'threatened' by those above me to do things that doesn't make sense. Perhaps this is one reason why schools don't teach financial education so that employers can have hordes of needy & desperate drones to do their bidding.

Only 1 in 3 Singaporeans save more than 20% of monthly salary

An online survey conducted by JobsCentral, from 19 Aug to 16 Sept 2011, revealed that researchers are among the thriftiest workers in Singapore. Nearly 60% of respondents who are in Research & Development (R&D) have pointed out that they would set aside more than 20% of their monthly income as savings.

Top 3 professions that are most concerned about saving are:

1. Research & Development - 56.7% in this line of work save more than 20% of monthly income
2. Consulting - 50% save more than 20% of monthly income
3. Business Development – 47.7% save more than 20% of monthly income

On other end of the spectrum, the worst 3 savers are in the fields of:

1. Events Management – 21.2% save more than 20% of monthly income
2. Public Relations – 21.2% save more than 20% of monthly income
3. Sales – 23.3% save more than 20% of monthly income

Only 1 in 3 Singaporeans save more than 20% of monthly salary. The survey, which garnered a total of 2,278 responses, also revealed that only 1 in 3 respondents (33.7%) save more than 20% of their monthly salary. Out of those who save less than 20% of their monthly income, approximately half of them (33% of total respondents) indicated saving less than 10% of their monthly income.

Higher monthly salary does not equate to higher percentage of income saved. Survey results presented a relatively consistent trend amongst the respondents with regards to their approach towards monthly savings. Regardless of monthly income, most would set aside about 10% to 20% of their income as savings.

When comparing those who made less than $1,000 a month & those who made above $10,000, it was found that the majority of respondents (35.3%) who made less than $1,000 & the majority of respondents (34.1%) who made above $10,000 have both indicated that they set aside 10-20% of their monthly income every month. Based on this finding, it can be inferred that although there is a huge difference between the absolute amount saved by these 2 groups, the fundamental mindset on proportion of income to save does not differ with varied income.

On average, S'pore workers save about $677 to $1,296 per month
On the other hand, respondents with monthly income of $10,000 & above had the greatest deviation in terms of saving habits. This group of respondents would save an average of between $4,212 to $8,673 per month. This results in a ratio of 2.1, when the maximum average saving is taken as a ratio of the minimum average saving.

Moonlighting is not a common trend
72.8% of the respondents indicated that they do not hold other sources of income, outside their primary jobs.

Of the respondents who said they do, these are the common sources of additional income:

1. Dividends from stocks/bonds (37.5%)
2. Freelance projects (28.5%)
3. Part-time jobs (25.3%)

Most would save up the bulk of their bonus
With regard to the disbursement of their bonus, the majority of respondents (44.1%) replied that they would save the bulk of their bonus.

Survey results also revealed that only 9% would put the bulk of their bonus into investments. A much smaller survey population, consisting of 0.5% of the respondents, would donate a large part of their bonus to charity.

At least one in three respondents (33.7%) agreed that they would spend their bonus on recreation, which include going on holidays (19.4%) and shopping (14.3%).

Survey Methodology
The survey was conducted online over a period of four weeks, from 19 August to 16 September 2011, and targeted Singapore residents aged between 16 and 65 years. Invitations to take part in the survey were broadcasted via e-mailers and online banners. The survey was also publicised via social media channels such as Facebook and Twitter.

A total of 2,278 respondents took part in the survey. Respondents consist of employed individuals coming from all levels of occupation, work industries and sectors of work.

Using a confidence level of 95% and sample size of 2,278, the results have a sampling error of +/- 2.05%. This means that for every 100 times the exact survey is conducted, the results obtained are conformable to a margin of error of 2.05%, 95% of the time. This also means that the results are highly significant. Sampling error for data from sub-samples varies.

Most are uncomfortable with sharing salary information with colleagues
Singapore workers are generally reserved about discussing the details of their salary with their co-workers. A large majority of respondents (75.7%) believe that salary-related information should be kept personal and prefer not to share it with their colleagues.

Top earners are more reluctant to share salary information
Respondents with higher gross monthly salaries are more tight-lipped about information concerning their salary as compared to those who earn less. Those who earn between $6,000 to $6,999 monthly are most unwilling to share their income information with their peers. This is is opposed to the smaller percentage of 64.7% received by voters earning less than $1,000 a month.


When people earn lesser they have nothing much to lose about sharing how much they earn with others. General trend is that fear rises with more income. What types of fear? Fear of car being scratched, fear of extra ingredients in their food & drinks, fear of how others view them etc.

If you are a good performer in your company & you truly believe you are underpaid, why not generously share your pay details with other colleagues? If your colleagues agree then the boss is screwed as he/she would soon face a mass exodus if nothing is done to placate the injustice.

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