By: 
The cost of living in Singapore is high. This, combined with the aspirations of Singaporeans, lure of marketing promotions and credit card rebates, are all reasons why people run into debt. However, this does not have to be your story. Living debt-free in Singapore is absolutely possible.
There are various reasons why many Singaporeans are piling up huge debts:
1. Splurging
Many people work in order to have enough money to spend on meeting their basic needs: food, education, health care, utilities. However, more Singaporeans are giving in to the desire to have more, even if it is unnecessary. These individuals borrow money to spend or splurge on items that they can do without. Having no awareness of their impulses, they thereby end up deep in debt.
2. Loss Of Income Or Taking A Pay Cut
Losing your source of income unexpectedly or experiencing a pay cut can put a strain on your income, especially if you are the breadwinner of your family. Many people who find themselves in this situation apply for a loan in order to meet their basic needs as they figure out what to do next to earn an income.
3. Business Crises
Owning a business comes with many risks. A steady business can begin to experience significant losses when markets shift suddenly. Business owners often take out personal loans to increase the cash flow of their businesses and keep them afloat.
4. Gambling
An addiction to gambling can have a significant impact on personal finances. Some people go to the extent of borrowing money to fuel their addiction.
5. Unexpected Illness Or Injury
No one plans to fall sick or be injured in an accident. However, illnesses and injuries do happen. Unfortunately, some people do not have medical insurance. They therefore have to fork out every penny on their own, putting a strain on their finances.
6. Insufficient Savings
Many individuals fail to put money aside for emergencies, and instead overspend. When a problem arises, they have no cash to deal with it. They therefore have to borrow money to cover their expenses and thus find themselves in debt.
Living debt free is possible with the adoption of good financial habits. These habits will help you not only get out of debt, but also stay out of debt for the long-term. These habits should be applied to your everyday routine for success. If your goal is to be debt-free, reevaluate your spending habits and adopt the habits listed below.
1. Set Money Aside For Emergencies
It is important to have a financial cushion. Putting money away for emergencies will help to cover those unexpected expenses. These funds will help to prevent long-term damage to your finances. They will ensure that you are always prepared for anything that may come your way.
If you are unsure of where to start, you can start small. Cutting back on spending in some areas and identifying leaks in your budget can help you find extra money to build your emergency fund.
2. Live On Less Than You Make
If you want to get ahead in your finances, you should live below your means. This means living on 70% or even 50% of your paycheck. This will mean creating a budget based on an amount that is smaller than your paycheck. You will then be able to direct the excess money to paying off your debts or savings.
In order to live on less than you make, you will have to change your perception of life. This will mean that you will have to learn to be contented with what you already have, and curb the desire to purchase items that you are unable to afford.
3. Find Other Ways To Fill The Void
Many people spend money as a result of feelings of discontent. They are jealous or envious of what other people have, or are unhappy with their lives. They spend money to fuel their preoccupation with what others have which they do not: emotion based shopping. However, the feelings of discontent never goes away. Individuals may thus find themselves stuck in a vicious cycle.
You can get out of this vicious cycle through a greater understanding of yourself, and what you are missing in life. Get to the root of the problem and find other ways of filling the void. If you are feeling low, go for a quick run, or call a friend. Find ways to resolve the issue without spending money. This will lead to less spending, which will in turn result in less waste and clutter.
4. Pay Attention To Details
If you want to be debt-free, you should pay close attention to where your money is going. Keeping track of your expenses will help you get your finances under control. You will have a greater understanding of your spending habits and be able to identify and eliminate unnecessary expenses.
Other than keeping track of your expenses; you also need to pay close attention to them. This means really scrutinizing your bills to identify errors, money leaks, late fees or overdraft notices. It only takes a few minutes to go through your bills when they arrive, which will save you lots of money in the long run.
5. Be Patient
If you want to get out of debt, you will need to learn to delay gratification. You will have to learn to walk past that limited edition handbag that everyone in the office is talking about and to resist impulse buying. You should be willing to save in order to make the purchase when you can afford it.
6. Think Long Term
Have a goal and come up with a plan of action in order to achieve that goal. This will help you stay on track and actually work your way out of debt and into a life free of creditors.
Begin to think of your life as long-term. You do not have to have what you want now. You can always get it later when you have enough money. This way, you can save towards your goals.
7. Use cash
Get into the habit of using cash to pay for everything. This will change your spending habits dramatically. Credit cards and debit cards remove the emotional connection between you and your money. This makes it easier to spend it.
However, holding your hard-earned cash in your hand will make you feel more protective over your money. You will find it harder to part with it. You will try to ensure that it stays in your pocket for longer.
The journey to a debt-free life can seem overwhelming in the beginning. However, you can make it, one step at a time. You just need to start with one habit. When you have a hang of it, add a new habit. Soon, all seven habits will become second nature and you will eventually begin to enjoy financial freedom.
