So recently I came across a couple of you tube videos where they were doing case studies on families that are struggling on combined income of greater than SGD$10k/month.
Honestly, $10k combined income for a family with kids and older parents in Singapore is barely enough. I know I might get flamed for saying this, as there are probably others that survive on much less.
Most of the advice given focuses on cutting down expenses. Yes, we should live within our means, be as frugal as you can. But then, at the same time, it’s equally important to enjoy life and not just survive. You only have one life.
In the case studies, the couples are in their late 30s to early 40s. They take home between 4-5k each, which probably suggest they are in a white collar job (I may be wrong, but in general). My first reaction is, how can they increase their income instead of reducing expenses?
Because, there is only so much you can reduce. If your child needs money for necessity items such as milk powder, diapers etc.. you will still have to find a way to buy it. Maybe a cheaper brand, that will save you $100 per month. $100 x 12months, you save $1200. Perfect, extra money to go into savings or investing.
Now, if you flip your mindset and think about, how can I make more money? This changes everything.
I like to use this analogy about getting a seat on the MRT to show how you think determines your outcome.
In the MRT, there are areas designated with seats and some without. As you enter, for example, turning left leads you to a standing-only section, while turning right brings you to a seating area.
We often make a decision before boarding the MRT. If you resign yourself to the thought, “aiya, confirm no seat one lah“, you’re likely to turn left towards the standing area.
On the other hand, if you’re preparing for a long journey and resolve to find a seat, you’ll turn right towards the seating section, You will tend to position yourself close to those seated, so that you increase your chances of getting a seat when someone alights.
You can see from the above that how you think subconsciously determines what action you take. If you move to the standing-only section, you are guaranteed to stand all the way, unless you change your mind and move to the seating section.
The same thing, if you focus on reducing expense, yes, I 100% believe that you will be able to cutdown on some and save more. But there is a limit to how much you can reduce.
If you do the same thing but focus on increasing your income, the outcome is unlimited. There is no cap on how much you can earn. I have a more detailed post on this subject Increase income vs reduce expenses.
If I were in the couple’s shoe, my initial move would be to ask for a salary increment. The only downside could be a rejection, which leaves you with your current income.
Should that fail, it’s time to focus on getting a YES on that pay raise next time. This can include upskilling on your role, to one that pays more.
Alternatively, if you don’t mind trading time for money, then you could also pick up some side gigs, or start one. I would recommend to pick up one that you enjoy doing so that you can do it for long term.
I share my personal story of how I got a 30% pay raise simply by asking here.
By increasing my income, it gave me more room to invest and save. This accelerated my progress towards my goals much more rapidly than reducing expenses did.