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Tackling Money Problems at Home

24 Dis 2021

Tackling Money Problems at Home | Pauline Teo | VI
(c) Sadie Xiao

Unless you're born into a rich family and happen to stay rich throughout your life, money problems at home are bound to come up at some point in your life.

You can be the most hardworking person in the world doing overtime, doing extra work, or taking an extra shift. But the truth is, living in Singapore, it is widely known our expenses will never quite catch up with your salary, no matter how hard we work, especially when medical fees come in.

See also: Money Money Home: Talk Money with Sharon Au and Darren Lim

Loans, mortgages, school fees for your kids if you plan to have a family, leisure expenses to bond with your loved ones – you cannot avoid all these if you want to live in Singapore.

That's why it is so common for us to hear families getting into conflicts and couples getting divorced, all because of money. 

There are also a lot of elderlies who are supposed to be retired but instead decided to re-enter the workforce, just so they can make a living for themselves or help out their children.

Most common money problems at home

In my more than 10 years of spreading financial education, a lot of people have come to me with various money problems at home. But the ones I saw "killed" the most families are these:

1. Young couples with children and high financial commitments

Romance without finance is a nuisance. All those rom-coms that say "all you need is love" are partly lying to you because without finance, it is hard for a marriage to properly function or even sustain.

As it is, the housing and daily expenses in Singapore can already cripple any young couple who’s just starting out. Add in a child to the equation and a car (for ease of transportation), everyone needs to work twice as hard because there is now an additional mouth to feed (two if you include the car).

2. Peer pressure

One thing about us Asians, our "face" or social dignity is at the forefront of basically everything. A lot of things we do is only because we want "to save face." You may be penniless or in debt, but the more important thing is, you cannot "lose face."

From holiday destinations to types of cars, types of houses, we can compare virtually anything.

And because of this need to top each other all the time, a lot of Singaporeans are actually in heavy debt at the moment. You'll be surprised to know how many people there are who are just clearing the bare minimum off their credit card bills every month and fighting with their partners regularly because of this.

3. Being the "sandwich" generation

Our parents have been taking care of us since we were young, so for us to support them when they are old or no longer capable to work, is a given.

But as mentioned earlier, it is already a struggle for most young couples with high financial commitments to keep up, especially with a child.

Added on with two elderly parents each – and some of them need medical care or some form of treatment, the bills can pile up even more quickly.

See also: 5 Tips for a Comfortable Retirement in Singapore

4. Financial losses due to lack of knowledge

In school, we were not taught money management or how to grow our money. So as adults, we can only guess and test out different things, hoping we'll strike some gold. Sadly, this doesn't end well most of the time.

Then, there are those who choose the "safer" option and keep all their money in the bank. Unfortunately, also not the best strategy, as you will lose money each year due to inflation. Compared to the inflation rate, our banks' interest rate is almost non-existent. Over the years, it will almost seem like you are "losing money" quickly. 

How to solve your money problems at home

Now, don't worry, because fortunately, like every problem, these money problems at home can also be resolved, or even nipped in the bud.

The only issue is, a lot of people don't know how, realised it all too late, or can't be bothered to do anything about it.

If you would like to make a change today, I've found these 4 pieces of advice to be the most useful out of the many I've given over the years.

1. Plan your finances

Like everything else, your finances also require planning. In fact, financial planning is one of the most important parts of our lives, yet there's a shocking amount of people who don't take the time to do it.

Unlike what most people believe, you really need just one day per year to map everything out. And then as you go along, review and refine them.

Having a bird's eye view of your financial status helps you to have a better picture of what's going on and what needs to improve.

2. Have the proper knowledge

Without the right knowledge, it will be hard to have a good plan.

Instead of "work hard, save hard, buy HDB and place money in FD/unit trust/insurance," (which ultimately won't beat inflation), gain some proper financial knowledge that can help you earn much more than a mere 3% to 4%.

3. Get a mentor with proper experience

Believe it or not, the "kopitiam" uncles and aunties are not your best source of financial advice. You should instead, look for successful people who actually have millions to their name.

This is not rocket science. If you want to be healthy, you wouldn't learn how from someone who is unhealthy. So, if you want to be rich, you should also learn from the wealthy. It is that simple.

4. Have the right friends

A lot of people underestimate this, but the friends you mingle with actually have a huge impact on whether or not you will be rich one day.

We are the average of the five people we surround ourselves with. So if you surround yourself with people who are complaining and blaming the government all day long for their misfortunes, you will also be the same.

Surround yourself with friends who are money-savvy and constantly discuss legitimate money-making ideas, and guess what, you will also be the same.

All families will have money problems at some point, the only question here is, what are you going to do about it? Are you going to let it eat you, handle it, or even nip it in the bud before it happens?

Only with good preparation such as financial planning and having the right knowledge and mindset will all common money problems at home can be greatly reduced. Fewer conflicts, fewer "what to do now" moments, and frankly, less headache for everyone -- now who wouldn’t want that?

Want to know better about handling money and creating passive income for your family? Join my complimentary two-hour masterclass here.

~ Pauline Teo