Musings Singapore

Pawnshops: Sign of the times or just bad spending habit?

Pawnshops hit paydirt as Southeast Asians sweat before pay day | Fox Business.

Sign of bad times? Maybe. I think there is a certain amount of living beyond your means and spending all you have instead of saving when times are good. Thus, when times fall bad, these people lose their ability to maintain their previous lifestyle. However, not being able to adjust immediately, the cab rides continue, the new clothes, expensive restaurants, specialty drinks instead of plain old water… Thus the spending remained high, while the income is not coming in like before.

I still believe that everyone needs to have cash savings that is 2-3 months of our monthly salary. If anything befalls us, like loss of employment etc and we lose a regular paycheck, we need to know that we can live the same way for 3 months, or stretch it out by a few more months if we watch our spending. Before we buy that expensive watch, have we stopped to think if we can afford to pay that if we lose our job tomorrow? Or when we buy that 2,000 dollar bag, do we stop to think if that cleans out our savings? Or if we whip out our credit card to pay for that manicure & pedicure package, are we spending money we don’t actually have? I ask, because folks who have things to pawn, obviously once had the ‘ability’ to purchase these items. I just question if that ability is real or an illusion.

With the credit card companies offering loans and all, or giving the consumers the ability to pay a large sum by installment (with a 5% fee), it is very easy for Singaporeans to get into the easy mentality that it is only a few hundred dollars a month, so it works out to be a small amount monthly. However, when there is no income, a few hundred dollars a month is a massive amount of money, in comparison.

Even though I’m not the most thrifty person in the world, and I do love my little indulges, I do make sure that I have a separate savings account that I transfer money to every single month as soon as my salary comes in. If I intend to travel to somewhere far, like Europe or USA, I draw up a budget, and save up for the balance. I admit, I fall off the bandwagon every now and then and spend a larger sum of money and deplete my funds a bit, but I very quickly replenish them.

I just hope that Singapore do not become like Taiwan, where a majority of the country’s citizens are drowning in debt.