Hard hit by inflation, who can millennials and Gen Zs in S’pore turn to for help?

Inflation is this year’s defining economic story. We see clear signs of it when taxi companies raise prices for the first time in a decade and public transport fares are to be raised later in December 2022. On top of this, utilities companies are also raising prices, and food as well as property prices are also climbing at record rates. 

High inflation is now a core fact of life many of us have to deal with, especially for young millennials and Gen Zs living in Singapore. This is why many of them have taken to expressing their concerns on the effects of inflation in finance-centric online communities such as The Burrow by DBS.

As fresh faces in the workplace, young millennials and Gen Zs often earn less than their older colleagues, which means they may have even less to spend but still need to save. 

In fact, research by DBS showed that 40 per cent of consumers are already seeing their income growth lag behind inflation. This is especially concerning for first jobbers, as it will take a longer time for them to grow their salaries. 

To add on, millennials and Gen Zs of today are likely to become the sandwich generation soon – adults supporting ageing parents and children. Inflated financial commitments combined with rising prices can lead to inflated financial challenges.

Saving is more difficult, but remains necessary

The cost of living has dramatically increased over the years, making it more expensive to financially support their loved ones – be it their parents or children.

For Jiaming, 26, he will soon have to take care of his retiring parents. Coupled with plans of setting down and starting his own family, he knows he needs a more aggressive saving strategy.

He spends an average of S$800 a month. His day job as an investment analyst at a VC fund is his main source of income, and he also has unrealised gains through various investments.

He confessed that he only started to be more financially conscious a couple of years ago, when he went broke at the age of 23. 

“I had S$19 left in my bank account, and realised that my failure to manage my finances was to blame. It was a huge wake-up call for me,” he recalled. It was at this point that he realised the importance of prudent financial management. 

Right now, my spending mainly goes to transport. I keep myself disciplined by allocating percentages of my disposable income – 50 per cent to transport, 30 per cent to food, 10 per cent for any shopping needs, and the rest on anything else that may come up.

But the impact of inflation is challenging to overcome even with strict measures, and not everyone will be comfortable with such austerity. For those with a smaller capacity to save, it could mean the need for massive lifestyle changes.

“I’ve already begun to feel the pinch from inflation. I now have to be far more conscious of my expenses, and I find myself holding back on spending, especially when it comes to my ‘wants’,” said Lisa, 23, a performance marketing associate.

She has since scaled down on discretionary expenses like fitness packages, and makes it a point to save around S$2,000 every month.

It’s one of the most consistent strategies that I employ. Immediately after getting paid, I store my savings in a separate account and lock them up, so that I’m not as flippant with my spending.

Most of us probably sit somewhere in the middle. With inflation affecting everyone, cutting back on spending is a difficult – but necessary – action we all have to take. 

Such actions can be difficult to take alone, but it becomes easier when you have peers to help you out in this journey. The Burrow does exactly that – it allows people to band together as they share and find solutions on an online collaborative space.

While some members discuss how best to cut down on expenses, others talk about ways to protect savings from the effects of inflation.

There’s an easier way to combat inflation

Young adults have a unique position in the fight against inflation. Being tech-savvy and having access to plenty of online resources may enable them to make informed financial decisions, but they are also challenged by information overload. They need to carefully identify what’s true, what’s current, and what will work best for them. 

There’s also safety, or comfort, in numbers. While many millennials are facing financial uncertainty, connecting with others in the same boat or those who’ve successfully beat inflation can be a source of helpful and honest information. 

Lucky for Jiaming, his friends were ready and willing to give advice on how to cut expenses and save more.

However, not everyone is fortunate enough to already have friends who want to talk about money, more so friends who are financially independent and in a position to give useful advice. This is where online communities like The Burrow come in handy. 

Members are free to discuss and share their financial problems, and there are many industry experts and other individuals there who can offer relevant insights and interesting points of view. 

There are also in-depth analyses on how to grow your money despite inflation, as well as on investment products, strategies and tools to help you achieve your financial goals.

Feel too shy to participate online? The Burrow has an anonymous posting feature, which removes the anxiety some might feel when asking questions or sharing POVs. 

All money matters are discussed in The Burrow, including money management, hacks on making the most of your money, and even events to connect with the community.

For those with family financial planning in mind, there’s POSB Parents, a community specially curated for mums and dads. If you are interested in providing better for your growing family and learn how to teach your children good money habits in this digital age, this group is for you.

Anyone who joins can expect tips on how to instil good money habits in their children, as well as family financial planning content to help them achieve key milestones for their family. If you’ve been wanting to save up for that family trip but haven’t found a good way to do so, this may just be the right opportunity to find out how, and get the most out of your holiday.

But if discussions aren’t your thing, there’s also the DBS for Young Adults group on Telegram. It is a one-way channel where DBS/POSB shares tips on how to become financially independent, including bite-sized information on investing, as well as money and life hacks for students and first jobbers.

These online communities are extremely helpful in gaining financial knowledge and keeping yourself up to date, which is crucial when you’re working to beat inflation.

Besides connecting you with like-minded people, the community keeps you aware of the many DBS/POSB solutions to help you beat inflation like layering your Multiplier and POSB Save As You Earn (SAYE) accounts to earn more interest.

You can also make use of digibank’s planning tool (‘Plan’ tab) to keep track of your finances and get personalised financial advisory. It’s the most convenient way to get a full view of your money situation because of dedicated sections for cash flow, financial goals, investments, and even insurance.

Saving more and cutting spending, however, can only take you so far. Since inflation means that your money can buy less, some might consider exploring investments as an option to hedge against inflation. For young adults or anyone who needs to slowly ease into investing, starting with S$100 a month is the way to go with a regular savings plan like Invest-Saver, or the two new digiPortfolio options.

For those hoping to maximise their savings when spending on daily necessities, they can consider the new DBS yuu Card, POSB Everyday Card, or PAssion POSB Debit Card for more savings. 

Even those who do not have PayLah! or use any of the aforementioned cards, there are other ways to save, for anything from dining to entertainment, or even grocery shopping. In particular, the POSB Lobang Kit contains over 24,000 deals that you can enjoy with any DBS/POSB card.

Insurance too might be a potential headache for many young millennials and Gen Zs, since there are so many plans available in the market. Fortunately, there are low-cost insurance plans that provide comprehensive coverage for just S$5 a month, like ProtectFirst. 

At the end of the day, the various campaigns, products and financial tools offered by DBS/POSB are there to help you fight inflation. If you don’t know where to start, join its trusty online communities for help.

You now know where to go:

This article was written in collaboration with DBS Bank.

Featured Image Credit: Getty Commercial