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How much do I need to earn each year in Singapore to live a budget or low cost lifestyle right
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here in this little red dot
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Hi there, I'm Jarrod Brown, Australian expat financial planner working with Australian
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expats here in Singapore. Now I'm asked time and time again by more and more Australians reaching out online how
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much they'll need to earn or how much they'll need to ask their employer for to be able
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to actually move to Singapore, still save money and account for the fact that they're
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not in most circumstances going to get superannuation contributions anymore. So let's dive into the numbers with a real case study
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We're not going to factor in the discretionary spending of dining out and holidays
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We're just going to look at the basics for an Australian expat family with two kids
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So let's dive into the numbers. Now let's start with one of the biggest expenses, rent
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Rent has gone up dramatically over the last 18 months here in Singapore
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So we've got two kids, two parents. Let's assume we're in a three bedroom condo at $6,000 per month
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Now we're not going to be right in the city, but we're also not on the border of Malaysia. So that should give you a reasonable price point, $6,000 a month, $72,000 a year
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Now I've got two kids in international school. Obviously it will differ slightly school to school, but we're going to assume $4,000 per
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month per child, $48,000 a year or $96,000 per year for them both to go to school
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Obviously the younger they are, the cheaper those fees will be, but you're not getting a great deal of savings from $40,000 to $42,000 per child
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And at the higher end, it's in the low fifties. So we should be fairly spot on with our $4,000 a month assumption there
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We've then got our utilities. Now again, this will vary slightly depending on how much you run the air con and whether
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you're working from home or not. Here we're going to factor in $250 per month
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We've then got transport. Now in this one, as I said, budget lifestyle, we're not catching cabs
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We're not catching rideshare. It's public transport and it's walking. Yes, it's hot, but this is the budget lifestyle, remember
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So in this one, we're factoring in $100 a month to cover our transport expenses
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Now we've then got health insurance and personal insurances. Now again, we're not talking endowment plans, savings plans, insurance linked investments
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just term insurance and health insurance. So we're going to throw in another $1,000 a month to cover that
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Then of course we've got our groceries. We need to be able to eat. We're going to throw in another $1,000 per month or $250 odd per week, slightly less
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pour in a bit weeks in a month, but we're going to factor in $1,000 a month for our groceries
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We've then got phone, internet, TV, another $200 odd a month, $2,400 per year, and entertainment
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Now this is really the wild card. This could be anywhere from a few hundred dollars to tens of thousands
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In this example, budget lifestyle, not going out a great deal. We're going to use $500 per month
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So all of those costs considered factored in gives us about $220,000 of expenses
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Now what is missing here? Tax and savings. We don't want in most circumstances to be moving to Singapore, living here and saving nothing
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What is the point? How are we going to afford to retire or pay down our mortgage or whatever it might be
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in future when we move back to Australia? So generally speaking, we want to be able to save at least 20% of our gross salary
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We then of course have the tax bill to think about as well. So we throw all these numbers together and that gives us the required level of income
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that we need to achieve this budget lifestyle in Singapore and say budget to modest because
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it is still a reasonable amount in rent. It's not, you know, living right out on the edges of Singapore
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So it is still relatively comfortable or modest. That means that we need to earn at least $330,000 per year as a household
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Now that might be one partner working, the other partner not. That might be each earning a similar income of about $165,000 each or it might be one
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earning that single income of $330,000. Obviously tax rates will change slightly depending on if it's both working or just one
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But there you have it. To achieve that modest lifestyle in Singapore, to be able to save that amount of money, we
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need to earn at least $330,000 per year
