Everything Inc.

Living in one of the world’s most expensive cities, it’s no surprise that many Singaporeans find themselves grappling with debt. From mounting credit card bills to overwhelming personal loans, car instalments, or even falling behind on mortgage payments, debt can quickly become a source of immense stress. But if you’re reading this, you’re already taking the first step toward change.

It’s important to know that you’re far from alone. Many across the island—whether young working adults, sandwich generation caregivers, or even retirees—are navigating the same financial minefield. The good news? Debt doesn’t have to be permanent. With a clear plan and a bit of discipline, you can take control.

Let’s walk through five practical, Singapore-specific steps to help you regain financial footing and start your journey towards a debt-free life.

Understand the Full Picture of Your Debt (The “Debt Audit”)

Before you can take action, you need clarity. Begin with a full audit of your debts. List every outstanding obligation:

• Credit card balances
• Personal loans
• Car loans
• HDB or bank mortgage arrears
• Education loans
• Informal loans from family or friends

Include for each:

• Total balance remaining
• Minimum monthly payment
• Interest rate
• Lender name

In Singapore, easy access to credit—especially through credit cards—can be a silent trap. Banks like DBS, OCBC, and UOB often offer attractive sign-up bonuses, but their credit cards come with high interest rates (often 26% p.a. or more) if not paid in full each month.

Many Singaporeans also fall into debt trying to manage rising costs of living—from escalating rental prices to childcare expenses and medical fees. By writing everything down, you’ll stop guessing and start understanding.

🔍 Pro Tip: Request recent statements from your banks, or use tools like SingPass-linked apps or personal finance trackers such as Seedly to consolidate and visualise your financial obligations.

Create a Realistic Singaporean Budget (And Stick to It!)

Next, assess where your money is going each month. For at least 30 days, track every dollar—from $1 kopi-o at the hawker centre to that $12 Grab ride home.

Categorise your spending:

• Transport (e.g., MRT/bus vs. Grab or private car)
• Food (home-cooked meals, hawker centre, restaurants)
• Housing (HDB mortgage or rent, S&CC charges, utilities)
• Childcare or eldercare
• Subscriptions and entertainment
• Insurance, education, miscellaneous

Then, compare your income against your total monthly expenses. Identify which expenses are needs (food, utilities, medical insurance) versus wants (bubble tea runs, designer buys, regular taxi rides).

Look for ways to trim:

• Take public transport more often
• Switch to generic brands at NTUC or Sheng Siong
• Cook at home instead of frequent food delivery
• Cancel unused streaming subscriptions
• Find free weekend activities instead of mall splurges

Even small sacrifices in Singapore’s cost-conscious environment can go a long way.

📉 Reality Check: You may need to give up certain luxuries temporarily, but remember—it’s to buy your long-term freedom.

Choose Your Attack Plan: Snowball or Avalanche?

Now that you know how much you owe and where your money goes, it’s time to choose a repayment strategy.

Option A: The Snowball Method
Start by paying off your smallest debts first. This gives you quick psychological wins—perfect if you’re feeling demotivated.

Option B: The Avalanche Method
Focus on debts with the highest interest rate first. This is more efficient and reduces the total interest paid over time.

Singaporean Scenario Example:

• Credit Card A: $1,500 @ 26%
• Personal Loan: $6,000 @ 9%
• Car Loan: $10,000 @ 3%

With the Snowball, you’d clear Credit Card A first for motivation.
With the Avalanche, you’d target Credit Card A first anyway (due to the highest interest), followed by the personal loan.

🇸🇬 Cultural Note: Singaporeans may lean towards the Avalanche method due to our pragmatic “kiasu” mindset—maximising savings. But if quick wins help you stay committed, there’s no shame in starting with Snowball. What matters is consistency.

Boost Your Income and/or Negotiate Smarter Terms

Sometimes, cutting back isn’t enough. If your current income can’t cover your essentials and debt repayment, consider these strategies:

Boost Your Income

• Side hustles:
  • Become a part-time Grab driver or delivery rider.
  • Offer tuition or freelance writing/design work online.
  • Join Singapore-based gig platforms like FastJobs or Glints.
• Sell unused items: Use Carousell to declutter and earn extra cash.

Negotiate with Your Creditors

• Contact your bank or lender. Many in Singapore offer:
  • Lower interest rates upon request
  • Flexible repayment plans
  • Debt restructuring

Explore Debt Consolidation Plans (DCPs)

MAS-approved DCPs are available through major banks like HSBC, Standard Chartered, and POSB. They allow you to merge multiple unsecured debts into one lower-interest monthly repayment.

✅ Tip: You must be a Singaporean or PR earning between $30,000 and $120,000 annually and have debts exceeding 12 times your monthly income to qualify.

Seek Professional Help from CCS

Credit Counselling Singapore (CCS) offers:

• Personalised financial counselling
• Debt Management Programmes (DMPs)
• Free educational workshops

They are non-profit, impartial, and discreet—ideal if you’re feeling overwhelmed and unsure where to start.

Build an Emergency Fund (The Singaporean “Safety Net”)

This step might sound counterintuitive while in debt—but it’s essential. Without a buffer, even a small emergency (e.g., a sudden hospital visit, retrenchment, or car repair) can push you back into deeper debt.

Aim to save 3–6 months’ worth of basic expenses, starting with just $50–$100 a month. Keep it in a separate savings account (preferably not linked to your main one).

🎯 Why it matters in Singapore:
In a high-cost city where losing your job can mean no CPF contributions and paying full medical costs, an emergency fund gives you breathing space without relying on credit cards or payday loans.

Pro Tip: Use DBS Multiplier, UOB One, or OCBC 360 savings accounts to earn higher interest as you build your fund.

Conclusion: The Road to Financial Freedom Starts Now

Getting out of debt in Singapore may feel daunting, but it’s entirely achievable with the right mindset and a clear plan. In a high-cost environment like ours, taking control of your finances means making tough but necessary changes—cutting back on non-essentials, budgeting realistically, and exploring extra income streams or debt consolidation options.

It’s not about instant results, but about steady, consistent progress. Celebrate small milestones—like paying off a credit card or sticking to your budget for a full month—and use them as motivation to keep going. Don’t be afraid to ask for help. Organisations like Credit Counselling Singapore (CCS) offer professional guidance and support that can make a real difference.

Whether it’s opting for public transport, cooking more at home, or picking up a side hustle, every smart choice adds up. Reclaiming your financial future starts with one committed step.💪 Start your debt-free journey today. Your future self will thank you for the effort you begin now.