As an expat, and a financial consultant, I have seen both sides of the coin when it comes to financial planning. 30% of Singapore’s population is made up of expats; and, being the fourth most expensive city in the world, means that non-residents really need to understand and adapt to the way of living here.
Here are some main differences between locals’ and expats’ expenses that you should take into consideration.
Houses takes up the main bulk of expenses moving to Singapore; rental is expensive, especially in the downtown area, where a lot of offices and expat’s place of work is. Singaporeans and PRs can buy a HDB at an affordable price using their CPF money, but if an expat wishes to buy a property, they are not allowed to buy a HDB, and executive condos and landed property can be in the millions. Clearly, for a foreigner, more often than not purchasing a property is not an option. So be cautious when you begin to start renting here- the rental and bills should never exceed 50% of your monthly income.
School Fees and Childcare
If you are in Singapore with your family, you need to understand the differences between local and international schooling. As local schools are funded by the government, the fees are a lot cheaper than international schools. Sending your child to international school can cost roughly $2,000-$4,000 per month. While there is some debate as to which schooling system is better (which I’m not going to go into), it is certainly more economical to send your child to local school. However, do take note that in order for an expat child to go to a local school, they have to pass exams, and places are competitive.
I often hear outrage from expats in regards to the cost of healthcare in Singapore. In 2018 Singapore was announced to have the second-best healthcare in the world, second to Hong Kong. All of this comes at a price, and Singapore is not a welfare state. While there are government subsides for locals, it is crucial that expats get a comprehensive healthcare insurance. The average hospital bill in Singapore is about $40,000, so to avoid paying out of pocket- get insurance! I know it may seem annoying but paying for healthcare is unavoidable in this country.
A Holistic Need For Planning
While most expats earn more here in Singapore than they would back in their home country, it is imperative that we plan correctly and not live paycheque to paycheque. This may often be difficult; Singapore has a plethora of amazing places to eat out, visit and experience, which can really burn a hole in our pockets. Simply saving a bit each month is not enough. Think long term, why did you move to Singapore? What do you plan on achieving? And where to plan on staying for the rest of your years?
Long-term planning may be daunting, but there is a reason why Singaporeans are some of the most well-off people in the world…they did the uncomfortable and planned their finances early!