Study Says a Household of Four in S’pore Needs $6,426 to Meet Basic Expenses; MOF Says It’s Not Accurate

With the exception of Jeff Bezos and a few others, we all wish we were earning more money.

Money, much like bubble tea and love, is something you can never have too much of.

These days, with a deadly virus roaming the streets stripping people of their livelihoods, having enough money is necessary not just to fund our ideal lifestyle but to survive. 

And according to a recent study, families may need more than we thought just to meet their basic expenses.

Study Says a Household of Four in S’pore Needs $6,426 to Meet Basic Expenses

A family of four with two children aged seven to 18 will need at least $6,426 to meet their household’s basic needs, a study found.

The study, titled What People Need in Singapore: A Household Budgets Study, was conducted by the Lee Kuan Yew School of Public Policy (LKYSPP) at the National University of Singapore (NUS).

Researchers behind the study defined a basic standard of living as one where Singaporeans can afford housing, food, and clothing, but also have opportunities for education, employment, and work-life balance, as well as access to healthcare.

Here are some of the figures various households have to earn to achieve a basic standard of living:

• a single parent who has a toddler or pre-schooler needs to earn around $3,218 a month
• working parents with two children aged two to 12 will need to each earn $2,906 a month
• married couples with two children aged seven to 18 will need at least S$6,426 a month

Demographics of Participants 

The study involved 196 participants in 24 focus groups, with researchers ensuring that participants were “diverse in terms of gender, ethnicity, and socio-economic background.”

The study began last year and took 18 months to finish.

18% of the respondents lived in rental flats, 66% lived in their own government-built flats, and 15% lived in private properties.

19% of participants had at least a secondary school education or below, while 81% had studied at a post-secondary level.

How it Was Done

Researchers arrived at the definition of a “basic standard of living” after discussions with participants in focus groups.

After which, respondents were asked to come up with a list of things people from different stages of life will need.

The researchers then went to shops or websites mentioned by the participants to determine the prices of these items before drafting a budget for each household.

Since the focus group had participants from different socio-economic backgrounds, these budgets apply universally, the researchers said.

The study – whose results span 80 pages – was conducted by a six-person research team, namely:

• Associate Professor Teo You Yenn, a sociologist from NTU
• Dr Ng Kok Hoe, a research fellow from LKYSPP
• Ms Wong Yee Lok, a research associate with LKYSPP
• Dr Stephanie Chok, an independent researcher
• Dr Neo Yu Wei from the Social Service Research Centre with the Faculty of Arts and Social Sciences in NUS
• Dr Ad Maulod from the Centre for Ageing Research and Education in Duke-NUS Medical School

30% of Singaporeans Do Not Earn Enough to Afford Basic Standard of Living 

While the national median monthly income of a Singaporean worker in 2020 –  S$4,534 – exceeded basic needs, this number doesn’t tell the whole story.

Due to what Dr Ng called “huge wage inequality” in the labour market, the national median monthly income for cleaners, labourers, and related manual workers was around S$1,535.

This is less than half of what they need for their basic needs.

In fact, around 30% of working households do not earn enough to meet these needs.

MOF Says Study is Not Accurate

In response to the study, the Ministry of Finance (MOF) said the conclusions “may not be an accurate reflection of basic needs largely due to assumptions used.”

It said that the methodology used for the study is highly dependent on group dynamics and the profile of the participants.

“With most participants having post-secondary education and 15% living in private properties, the findings expressed may not be reflective of the circumstances of the lower-income families,” it said.

For example, the study includes private enrichment classes in discretionary expenditure, omitting the student care centres run by the Ministry of Education that provide enrichment classes at a lower cost.

MOF also disputed how much each household member needs per month for basic needs – the study concluded that S$1,600 is necessary, but MOF said this is in excess of basic needs.

They pointed to statistics from 2017 and 2018, which showed the average monthly spending for households with young children was around S$6,600, meaning each member spent around S$1,520.

It added that there were other errors in assumptions made, including those which understate the amount of government subsidies and financial support that low-income families receive.

If you’re interested to go through the findings of the study yourself, you can head here to read the 80-page report.

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