Singaporean households are taking on more debt than before, yet the broader financial landscape tells a reassuring story. Household balance sheet numbers from the recent Singapore Department of Statistics (SingStat) release showed that liabilities grew for the sixth consecutive quarter, rising 5.2% in the first quarter of 2025 compared with the same period a year ago and reaching $384.1 billion. This marks the sixth consecutive quarter of rising debt, driven mainly by increased borrowing for property purchases and other major expenses.
But don’t mistake rising debt for financial distress. For many Singaporeans, taking on long-term loans to finance big-ticket items such as homes is a sensible strategy, especially when balanced with careful cash management for everyday costs. In a city where the cost of living never sleeps, spreading payments over time helps families better manage their cash flow.
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Meanwhile, household financial assets have grown even faster, increasing by around 7.5% compared with a year ago to an estimated S$670.1 billion. This means that the liquid assets Singaporeans hold, including cash and bank deposits, comfortably cover their debts. With assets outpacing liabilities, overall household net worth remains healthy, climbing 8.1% in the first quarter compared to a year earlier, reaching $3.1 trillion. This marks a slight slowdown from the previous quarter’s 8.5% growth, but the momentum is unmistakable.
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Experts point out that housing loans continue to dominate household debt portfolios. Mortgage loans now represent more than 70% of total liabilities. Yet, resilient property values have provided a sturdy cushion, shielding households from overexposure and bolstering their net worth.
In essence, borrowing when paired with strong asset growth and responsible repayment can be a sign of financial strength rather than vulnerability.
Small and medium-sized enterprises (SMEs) form the backbone of Singapore’s economy, accounting for a significant portion of the nation’s employment and economic growth. However, despite their critical role, many SMEs face financial constraints that hinder expansion and day-to-day operations. This is where financing solutions come into play, providing much-needed support to help SMEs thrive.
Keep reading to explore how SMEs in Singapore can benefit from various financing solutions and how they can leverage these opportunities for sustained growth and success.
1. Access to Working Capital
One of the biggest challenges SMEs face is maintaining consistent cash flow, particularly when dealing with delayed payments, seasonal fluctuations, or unforeseen expenses. Financing solutions, such as working capital loans, offer businesses the liquidity needed to manage everyday expenses, like payroll, inventory, and rent, ensuring operations continue smoothly even during lean periods.
By securing a steady cash flow through a loan company in Singapore, SMEs can focus on growth rather than worrying about short-term financial gaps.
2. Funding Business Expansion
Expansion is essential for businesses aiming to stay competitive in the market. However, growing a business, whether through opening new outlets, launching new product lines, or venturing into international markets, requires substantial investment.
SMEs can benefit from business loans designed specifically to provide the necessary capital for such expansions. This allows businesses to grow without depleting their cash reserves or compromising other operational areas. With the right financing, SMEs can tap into new opportunities, scale operations, and increase their market share.
3. Investment in Technology and Innovation
Staying ahead often means investing in the latest technology. SMEs need to innovate to remain competitive, which could involve upgrading existing infrastructure, improving production processes, or embracing digital tools and software.
Financing solutions enable SMEs to make these crucial investments without the upfront financial burden, helping to enhance efficiency, reduce costs, and position themselves as leaders in their industries.
4. Managing Seasonal Fluctuations and Risks
Many SMEs operate in industries that are highly seasonal or subject to economic fluctuations. These periods of instability can place a strain on a company’s finances, especially if there is limited cash flow. Financing solutions provided by a loan company allow SMEs to bridge these gaps and stay afloat during slow periods.
Moreover, access to flexible financing can act as a buffer during times of economic uncertainty, helping businesses weather financial challenges and minimise risk.
Partnering with the Right Loan Company in Singapore
While the benefits of financing solutions are clear, choosing the right partner is crucial. SMEs need to work with a reliable and experienced loan company that understands the local market and offers flexible solutions tailored to their needs.
Make sure to choose a trusted loan company in Singapore that specialises in providing tailored financing solutions to businesses. These companies should cover a wide range of services, including business loans, trade loans, and mortgage-backed working capital loans, designed to support SMEs at every stage of their growth journey.
In a 2022 survey by the Institute of Policy Studies and Talking Point, 35% of participants admitted to spending more than they earned, with over 60% stating they used to subscribe to “buy now, pay later” (BNPL) schemes. How serious is the prevalence of these schemes? According to the Monetary Authority of Singapore, BNPL transactions reached around S$440 million in 2021. With the growing popularity of BNPL, navigating credit card ownership has become trickier, especially for younger generations.
If you’re a Gen Z, a younger millennial, or a guardian looking for the right credit card for a young adult, consider this guide to credit card recommendations and tips.
START WITH THE ELIGIBILITY
While requirements vary between financial institutions, these are the most common requirements:
a. Minimum Annual Income: typically S$30,000 for Singapore citizens/PRs or S$45,000 for foreigners
b. Minimum Age: at least 21 years old
c. Good credit history: Certain cards may require a solid credit record of several years
IDENTIFY THE RIGHT CREDIT CARD FOR YOU
Identifying the right credit card can feel overwhelming because of the variety of options in the market today. A good place to begin is by examining your lifestyle. Are you a frequent traveler or do you spend more money on groceries? After identifying the factors that matter to you the most, you can shop around and compare each credit card’s features.
On that note, here are some of the best credit cards for beginners in Singapore:
#1: FOR AVID TRAVELERS: KRISFLYER UOB CREDIT CARD
The KrisFlyer UOB Credit Card allows you to earn 3 miles per S$1 spent on Singapore Airlines, Scoot, KrisShop, and Kris+ purchases. Additionally, you can earn 3 miles per S$1 spent on dining, food delivery, online shopping, travel, and transport. For all other spending, you’ll earn 1.2 miles per S$1.
What’s more? From now until 30 Sep 2024, you can take advantage of a promotion offering up to 31,000 miles and a first-year annual fee waiver (worth S$196.20, including GST) when you spend a minimum of S$2,000 within 60 days of approval (T&Cs apply). Apply for KrisFlyer UOB Credit Card at uob.com.sg.
#2: FOR TRANSPORT AND SHOPPING REWARDS: DBS LIVE FRESH CARD
If you are looking for a credit card that rewards you for transportation and shopping, look no further than the DBS Live Fresh Card. It offers up to 6% cashback on transportation and shopping, along with 0.3% unlimited cashback on every eligible purchase. Keep in mind that a minimum spend of S$800 is required, with a cashback cap of S$70.
Best of all? There’s a promotion of S$150 cashback when you spend a minimum of S$800 within 60 days of card approval (T&Cs apply). This promotion is valid until 30 Sep 2024. Learn more about the DBS Live Fresh Card at dbs.com.sg.
#3: FOR ONLINE & IN-STORE SHOPPING: CITI REWARDS CARD
The Citi Rewards Card allows you to earn 10x points or 4 miles per S$1 on online and shopping purchases. You can also earn 1x point for all other spending. Additionally, you can redeem your points for every purchase via the Citi Mobile App. You will get S$1 with every 440 points.
If you’re interested in applying now, you can receive up to S$450 in cash rewards or 5,540 SmartPoints, plus a chance to win a Rolex Submariner Date 126610 (T&Cs apply)! Hurry, as the promo runs until 13 Sep 2024. Sign-up for Citi Rewards Card at citibank.com.sg.
READ THE ANNUAL FEES
Much like the benefits, annual fees vary across credit cards. Some cards offer no annual fees, while others may waive the fee for the first year. However, don’t automatically choose a no-fee card as you need to compare the features before deciding what suits you best.
Pro tip: Sometimes, you can get the annual fee waived simply by requesting it from your bank. It doesn’t hurt to try!
FINAL THOUGHTS
Getting your first credit card is an exciting milestone, but it also brings new responsibilities. As a newbie, it is important to do your research first before committing to a credit card application. Then, always monitor your spending and stay within your credit limit to avoid financial stress. Lastly, make sure to pay off your balance on time to build a solid credit history.
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Disclaimer: All data provided is accurate as of 10 September 2024. Promotional details are subject to change at the discretion of the respective banks. Please conduct your own due diligence when comparing credit cards and their offers before signing up, as individual lifestyles and needs may vary. Use this article as a guide only. Thank you.
“Ding!”, you just receive an SMS from a family member that’s asking for financial support during tough times. We’ve all been there! When this happens to me, I give only what I’m comfortable losing as I don’t want to ignite conflicts. For starters, I’ve seen friends sacrifice their own financial stability to help family members, leaving them unable to save for their own future. It’s a tricky balance, and the emotional weight can be very heavy.
Watching someone you love struggle financially can be heartbreaking. If you have the means, it’s natural to want to help. But before you do, take a moment to consider the potential consequences. As financial expert Dave Ramsey wisely says, “The borrower is slave to the lender.” The last thing you want is for a family member to feel indebted to you, or worse, to start viewing you as a financial safety net. This dynamic can quickly strain relationships, especially if they start reaching out to you only when they need help. On that note, consider these things when deciding to help:
#1: TAKE THINGS SLOW
When a family member asks for money, emotions can run high. You might feel that saying “yes” is the only way to maintain the relationship. But it’s important to take your time before making a decision.
Consider whether you can truly afford what’s being asked. If you’re uncertain, it might be wise to discuss it with your spouse.
#2: THINK OF THE MARITAL IMPACT
If you’re married, giving financial support to in-laws or your own parents adds another layer of complexity. The last thing you want is to create tension between you and your spouse. Money issues are one of the leading causes of divorce, so it’s crucial to ensure both partners are comfortable with the decision.
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If lending money might strain your finances or relationship, explore other ways to support your family members such as helping them apply for government grants.
#3: CONSIDER GIVING A MONETARY GIFT
If you’re financially secure and your spouse agrees, consider offering a financial gift instead of a loan.
If your in-laws are facing hardship due to job loss or health issues, a one-time gift can provide relief without the expectation of repayment, which can ease any potential tension.
#4: BE PREPARED TO SAY NO
If you decide that you can’t or shouldn’t provide financial help, it’s important to approach the conversation with honesty and empathy. For instance, it might be best to wait until your in-laws are more emotionally calm before having this discussion. Setting boundaries is important, but timing and sensitivity can make a big difference in how your decision is received.
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Helping family members in financial need is never an easy decision. By considering the potential impact on your relationships and financial health, you can make a choice that supports both your loved ones and yourself.
As parents, we play a vital role in shaping our children’s behavior and values, including their money habits. While we often focus on the immediate impact of teaching our kids about financial responsibility, it’s crucial to recognize that these habits can have far-reaching consequences that extend well into old age.
We’ll explore the profound influence of childhood money habits on one’s financial well-being during the golden years.
EARLY FINANCIAL EDUCATION
Instilling a strong foundation of financial literacy in children sets them on a path towards a secure future. Teaching them basic concepts like saving, budgeting, and distinguishing between needs and wants establishes healthy money habits from an early age. These early lessons can profoundly impact how they handle their finances in adulthood, leading to better financial decision-making during retirement.
POWER OF SAVING
Encouraging children to save money fosters a sense of delayed gratification and financial discipline. By teaching them the importance of setting aside money for the future, we equip them with the tools needed to build a retirement nest egg. Children who develop a habit of saving are more likely to continue this practice throughout their lives, ensuring a more comfortable retirement.
UNDERSTANDING DEBT & CREDIT
Educating children about the responsible use of credit and the potential dangers of debt is crucial. When children learn to differentiate between good and bad debt, they are more likely to make informed decisions about borrowing in adulthood. By cultivating a sense of caution and encouraging responsible credit usage, we help them avoid financial hardships in their later years.
ATTITUDES TOWARDS WORK
The work ethic and attitudes towards earning money that children develop during their formative years can significantly impact their financial stability in old age. Teaching children the value of hard work, ambition, and perseverance can instill a sense of responsibility and a drive to succeed. These qualities are often correlated with higher earnings and a greater ability to build wealth for retirement.
FINANCIAL INDEPENDENCE
Empowering children to become financially independent and self-sufficient individuals has lasting implications for their financial well-being in old age. Encouraging them to find part-time jobs, start small businesses, or pursue entrepreneurial ventures teaches them the importance of generating income and managing it responsibly. This independence reduces the risk of financial dependence on others during retirement.
FINANCIAL ROLE MODELS
Children learn by observing the behavior of their parents and other influential figures in their lives. Modeling positive financial habits and demonstrating responsible money management lays the groundwork for their own financial future. Parents who exemplify prudent spending, saving, and investing practices are more likely to raise children who adopt these behaviors in their later years.
IN A NUTSHELL
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Our children’s money habits have a profound impact on their financial well-being in old age. By providing them with a solid foundation in financial literacy, teaching the value of saving, cultivating responsible credit usage, and fostering a strong work ethic, we empower them to make wise financial decisions throughout their lives. As parents, we have a unique opportunity to shape their future financial security and set them on the path to a comfortable and fulfilling retirement. Let’s make the most of it and ensure our children are well-prepared for their golden years.
Anna Agoncillo
MoneyDigest
