Do you spend more or save more during Circuit Breaker?



The Circuit Breaker is now day 22.


Prior to Circuit Breaker, there are already people who opt to stay at home if they can. Does it really mean that you save money as a result?

We think while there are some savings to be made, there are also additional expenses that would otherwise not incur. Here is a possible breakdown of what you might be experiencing as a result of the circuit breaker.

Spend Less
No More holidays for 2020

Eat out less often 
Going to restaurants has been a popular pastime with Singaporeans. The crowded restaurants during dinner and weekends at the malls are a testimony to it. With Circuit Breaker, you would not be able to dine out. As a result, you will get to save from it.

Big Ticket Items
Purchases of branded goods, designer bags, watches, cars and even houses are down during this period. If you are one who loves to splurge, you would probably find yourself saving a bundle during this period.


Entertainment
During weekends, we would tend to head out to catch a movie, see a play or visit an attraction. With CB, all these will be on hold resulting in savings there.

Travel

A big-ticket item for families would be travelling. Travelling for a family of 4 could easily rake up to $5000 for a nearby country and in excess of $10000 if one is to choose somewhere further or longer. With the curtailment in travel, this would be a substantial saving for the family.

Non Essential items
To be honest, most of the time when we head out to shop, we would buy things on impulse. Given the fact that most retail shops are close, we would be saving a bundle here.

Transportation
Unless you are an essential worker, you probably work from home. This meant that you would not be having much transportation expenses.

Dry clean
Likewise, if you are working from home, there is no need to put on that suit for work. That ought to save a couple bills from dry cleaning.

Enrichment classes
For parents who send their kids to sports classes like badminton or tennis, these classes may stop. Similarly, those who are attending piano or violin lessons may have to stop too. There should be some savings from this pause.




Spend More


Electricity Bills
With families that have children doing Home Base Learning and adults working from home, electricity bills would be on the rise. It would not be surprising to see an upside of 30% increase from more people starting at home. The culprits are Air con, TV and overwork fridges.

Groceries
For those who decide to hunker down and not head out unnecessary, The biggest obvious increase will be from the groceries bills. We had seen our groceries shot up by as much as 100% over the past month or so as we opt to eat home cook meals rather than takeaways.

Takeaways and Deliveries
For some families, managing WFH and HBL would mean less time to cook. As a result takeaways or deliveries might form the bulk of the meals. As a result, expect to see an increase in cost for these areas.

Electronics
A new Laptop, TV or even gaming console will not be surprising for households with kids. The laptop might be needed for families with more than one children on HBL. The TV is for entertainment while the game console is meant to keep kids occupied while parents are working from home. Some families even resort to getting chest freezers for their additional groceries purchased.

Online Shopping
It is hard to not shop for the typical Singaporean. Most will take their shopping fix online. If you check, your online shopping bill would probably creep up.

To Save or to spend -How to manage cash flow


Given the uncertainty ahead, it might be more prudent to resist the urge to spend and save for those rainy days ahead.

If you are facing a cash flow issue, there are a few things you could do to ease the pressure. One of the biggest impacts will be on fix expenditure such as loan and insurance. MAS has provided a few measures to help ease the financial burden during this period

Defer repayment of Residential Property Loans
Individuals with residential property loans may apply to respective banks to defer either principal payments of both principal and interest payments up to Dec 31st

Lower interest on Personal Unsecured Credit
Individuals with unsecured credit facilities from banks or other credit card issuers may apply to the respective lender to convert their outstanding balances to term loans ar reduced rate of interest, capped at 8%. This would be useful for those with credit card balances that often charge 26%. The term of the converted loan can be up to five years.

This option is available to all individuals who suffered a loss of 25% or more monthly income after 1 Feb 2020 and are at risk of incurring substantial arrears. This can apply to outstanding unsecured debt from 6 April to 31 Dec 2020

Defer Premium Payments for Life and Health Insurance.
Individuals with life and health insurance policies may apply to their insurer to defer premium payments for up to 6 months while maintaining insurance coverage during this period. Valid for policy renewal between 1 April to 30 Sep 2020.

General Insurance for property and vehicles
Individuals may apply to their general insurance company for instalment plans

Do note that while deferment may help to ease current cash flow, the payment amount thereafter will often be higher to cover the current deferment.

For more information on MAS Covid19 measures, you can refer here


What's your Bottomline?
After going through your own budget. Do you save or spend more during this period?

Personally, with the big tickets items off the list, we would have save more than spend more. Given the uncertainty ahead, it would probably be a wise thing to do.


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