GoBear, an Asian financial supermarket, commissioned an online survey with over 4,000 respondents across four countries in Asia Pacific to better understand the financial health of people across the region. Specifically, the Singapore start-up wanted to identify common gaps around personal finance – from financial literacy, to financial security and financial knowledge.
The findings, announced on 1 November 2019, confirmed that based on people’s financial choices and behaviors across the region, Singapore is the most financially healthy country outscoring Hong Kong SAR, Thailand and Indonesia on the GoBear Financial Health Index. However, the results also showed that despite Singapore’s high score,41% of Singaporeans don’t feel optimistic about their financial future.
According to behavioral finance and market psychology expert Wong Kon How, a great deal of these insecurities comes from societal pressures. Because a developed nation like Singapore inevitably has limited GDP growth, it has invested its future on other high value-added activities in the manufacturing and services sectors.
However, he continues, “This leaves our talent under constant pressure to keep up and stay competitive in a space where opportunities are narrow and limited.”
“On top of that, we’ve become accustomed to a certain quality of life and feel the added pressure to keep up appearances within our community. And it’s all of this pressure combined that’s led to our lack of financial optimism,” he added.
The survey revealed Singaporeans’ lack of confidence when it comes to their financial health, which is creating financial insecurities and gaps. Despite 91% of Singaporeans claiming to have at least an average level of financial knowledge, 43% don’t feel financially secure and 1 in 3 say they don’t know how to grow their wealth effectively.
Singaporeans are asset rich, but cash poor
The findings also show that while Singaporeans seem to have a handle on their overall financial health, a surprising 21% of Singaporeans claim they can’t live beyond a month if they were to lose their main source of income. According to Wong Kon How, this is largely because Singaporeans have their cash earnings tied to investments like their CPF and property ownership.
And despite being tight on cash, they aren’t taking action to grow their wealth or manage their money effectively, with 25% believing that investing is very risky and 1 in 5 still keeping hard cash at home in their piggy banks.
Singaporeans have a myopic approach to financial health
56% of Singaporeans claim that becoming financially independent is a top priority to save money. However, their quest for financial independence is beyond their control, with 1 in 2 (54%) saying the cost of living is outpacing their earnings.
GoBear’s Singapore Country Director Winston Ng explains that in such an environment, it is important to remember that there’s no one-size-fits-all approach when it comes to managing our financial health as everyone has different needs and are at different stages of life. What is key is to “improve our understanding of ways to make our money work harder.”