Scheduled Maintenance: CPF digital services will not be available on 4 Feb 2024, from 12am to 8am.

Your page is loading.
One moment please.

06 Feb 2023
SOURCE: CPF Board

 

Woman organising finances with laptop and calculator

Living life amidst the pandemic was certainly not easy. And while COVID-19 has yet to completely pass, life is slowly but surely, moving away from the days where you had to stay home all day long.

 

But this doesn’t mean everything will just return to how things were before! Things have changed, and this includes your spending habits. Let’s look at some spending habits that you might have developed during COVID-19, and whether you should keep them.


Do's

1) Planning ahead: less hassle, more value

During the Circuit Breaker period, in order to reduce the number of trips to crowded places like supermarkets, many had to plan their purchases well ahead of time. In a time where it was difficult to tell what restrictions might be implemented next week, planning ahead for a longer period of time was the norm. Instead of buying necessities, ingredients and items for a couple of days at a time, shopping trips instead focused on how one could stretch one’s groceries for as long as possible and being able to make that one trip’s purchases last longer. This is a good practice to retain, even as life returns to pre-COVID times!

 

Planning ahead means thinking for the long term, and preparing for more than just what you need right now. Some questions to consider when planning ahead would include:

How far ahead should you prepare for?

Rather than just plan for today and tomorrow, why not plan your purchases for the whole week, or even for a month? By considering what is ‘longer term’ to you personally, that’s one step closer to understanding how you can best balance your own personal finances! If you only consider the short-term, you might end up buying less of an item thinking you only need it now, and end up spending more when you run out and need a replacement. On the other hand, if it is something you need for the long term, purchasing in bulk may be the right option as it can help you save money. Of course, this does not mean to buy in excess! Buying more should only apply to items you are certain you will need, such as daily necessities.

 

By considering your needs over a longer period of time, you are able to better understand what items you need, as well as how much of any given item you need for that period of time. This in turn allows you to make more well-informed purchases, thereby saving you money in the long run.

What do you actually need?

When you’re clear on how far ahead you’re planning for, another question to consider is what you actually need during that period. When considering purchases for a long stretch of time and being purposeful about your purchases, you are actively laying out what you need, for what reason, and how much you will need to purchase. This also allows you to get a clear overview of what you have on your purchase list. Why is this important? Because it allows you to better spot if items with overlapping functions are present so you can avoid unnecessary purchases.

 

When it comes to planning ahead, sometimes less is more. You’d want to get the most of your money and having a clear idea of the big picture lets you do just that.

 

The same applies for your retirement planning too: when you have a clear idea of what you want your retirement years to look like, it becomes easier to know how much you need, and how much you should be saving now. You don’t have to make bulk top-ups when you’re close to retiring, if you can let the smaller, periodic efforts build up in their place!

2) Adjusting your spending and saving ratios

During the pandemic, it’s likely that some of your usual areas of spending have changed. For instance, when working from home was more commonplace, it meant less time and money was spent on public transport. In addition, you might have adopted different saving or spending habits in response to changes in your environment during that time, such as spending less on clothes or even travelling, or perhaps learning how to cut back on your spending altogether due to changes in your job or unemployment.

 

With things going back to more like how they were pre-COVID, it’s no longer that simple. As going back to offices becomes a regular practice once more, transport costs are now part of your daily expenses again. The same applies to food: instead of cooking at home, you might now buy your meals outside (which might further increase your spending).

 

Going back to pre-COVID lifestyle habits doesn’t mean you won’t be able to save at all. It just means you have different areas of spending to factor into your planning! This is where committing to the good saving habits you learnt and being purposeful about your spending as how you might have been during the pandemic are crucial. While these changes may seem insignificant, remember small habits add up eventually, and that it is more important than ever to continue to commit to maintaining healthy savings.

 

A common way to calculate how much you can save each month is to set aside a portion of your income for necessities (such as the utility bill and food), emergencies and disposable income (for things you don’t strictly need, but want to buy). With these portions settled, the remaining money is how much you save. If you have to account for new forms of expenditure such as transport, then it will surely eat into how much you can save if all other forms of expenditure remain the same.

Man with a calculator

Which is why managing these ratios is important. Putting aside the items you cannot compromise on (such as necessities and emergencies), you should consider how much of your monthly take-home income is taken up by each form of expenditure.

 

Let’s illustrate this with some numbers. Let’s say necessities take up 40% of your monthly income, emergencies take up 30% and you keep 20% for your disposable income. In this scenario, you are currently saving 10% of your take-home income every month. If you have to add transport costs into the equation without compromising on the other areas, you will end up saving less than 10% every month. If you wish to maintain the 10% of income as savings each month, then you should look at which other areas can you afford to cut. For instance, can you cut down on one cup of coffee every week and put that into your transport fees? You might cut your disposable income down to about 15%, but in turn, you are able to maintain the same 10% on savings to help grow your retirement nest egg.

Don'ts

Just as there are good habits worth keeping, there are also spending habits that should be changed as your lifestyle changes. Here are two changes that might have worked well during the pandemic but should be reviewed as you enter a post-COVID world:

1) Over-relying on delivery and online services

One of the issues with the pandemic is the inconvenience it brought to daily life. In order to adapt to dining restrictions and working from home, it became common to order food delivery and engage in online delivery services. The convenience of having your food and items delivered to your doorstep helped to make life simpler, and that convenience no doubt remains salient today.

 

However, with restrictions lifted across public places and eateries, it is now possible to dine out like before. For those who might have gotten used to the convenience of delivery services altogether though, should we relook how much we are spending on such delivery services?

 

As it turns out, from a savings standpoint, yes! Due to their convenience, food delivery services require you to pay more than you normally would at the restaurants themselves, be it via increasing the base price of items, charging a delivery fee, or both. In the case of delivery fees, it might also increase during certain hours of the day (such as during lunch or dinner times), thereby adding to the overall cost. These costs can really add up, especially if you order deliveries for most of your meals. As the cost of living goes up, it becomes increasingly important to stretch your dollar wherever you can.

 

Of course, that isn’t to say that you should not peruse delivery services whatsoever. It’s okay to still use them every now and then, just not as your only means of getting your food or items! The key lies in having a healthy balance of convenience and spending, such that you can maintain a healthy amount of savings (and calories!).

2) Overcompensating for lost time

Due to the pandemic, it is highly possible that you might have missed out on many opportunities to meet with friends. Now that you can engage in social gatherings again, you may feel the need to ‘make up for lost time’ by meeting others as much as you can. While the sentiment is sound, you should also remember to be responsible with such ‘revenge spending’. You do deserve to pursue the activities that you missed out on during the pandemic, but that does not mean you should spend more now just because you missed out previously!

 

While it is true that you would have saved more money by staying home during the pandemic, frequent meetings may eat into your savings at a faster pace than you would expect. After all, it can be easy to not pay attention when you’re having fun! Of course, it doesn’t mean you should abstain from such activities altogether. Same with the previous point on delivery services, you should be aware of how much you are spending, how much you are able or willing to spend, and most importantly, how much you wish to save. Being conscious of these aspects will allow you to spend responsibly, and work towards saving for your retirement even as you enjoy the present!


Pulling through the pandemic was no easy feat, but perseverance played a big part in allowing the community to do so. The same applies to your personal life and savings, where long-term effort is crucial to achieving your goals. While post-COVID life may seem tempting and full of opportunities, it’s also worth bearing in mind what your long-term goals are. By keeping those goals in clear focus, you will be able to make better decisions in the present and take steady steps towards your ideal retirement lifestyle.

If you need some help to figure out if you’re in the right direction, why not give our CPF planner a try? By projecting how much you need for retirement, it can also help you better manage your savings as we navigate our way in a post COVID-world!


Information presented is accurate as of the date of publication.