As a further research into household income, I am assuming if someone wants to buy a place and a car together. In my previous post, I mentioned that imagine if the combined income of a couple is S$8,000.00 (maximum cap for public housing), and say the property costs S$600,000.00.
With S$8,000.00, there will be about S$1,840.00 per month in the Central Provident Fund. The downpayment will be S$60,000.00, remaining payment S$540,000.00.
If the couple is buying the flat for the first time and they bought a flat near where one of their parents are staying, they can get a grant of say S$20,000.00. Hence, the remaining payment is S$520,000.00.
Out of these, the couple can only get eighty percent of a housing loan, making it S$416,000.00. So the remaining S$104,000.00 still has to be paid via cash or Central Provident Fund (if enough).
Now for the monthly repayments. Imagine the tenure of the housing loan is thirty-five years (the maximum), and the annual interest is 2.5%. So for thirty-five years, the interest will be S$364,000.00.
Which means the monthly repayment will be (S$416,000.00 + S$364,000.00) / 35 / 12, making it S$1,857.14 per month. Assuming the couple does not utilise their Central Provident Fund because they rather save it as their retirement fund, this is the amount they have to repay each month.
Now, if the couple decides to buy a car. Assuming they buy a normal sedan at say S$70,000.00. If they are able to get a loan with an interest of three percent and a tenure of ten years, the total interest will be S$21,000.00. So the monthly repayment will be (S$70,000.00 + S$21,000.00) / 10 / 12, making it approximately $760.00.
If we round up the housing repayment plus the car repayment, it will be S$2,000.00 + S$800, making it S$2,800.00 per month. That is assuming the couple really has a combined income of S$8,000.00 per month to play with, otherwise things will be really tight after paying for the flat and the car.
So if both are working and the cost is split, assuming both are earning four thousand every month, each has to come up with S$1,400.00 per month. After deducting the amount put into the Central Provident Fund, the take home income per person will be S$3,080.00.
Hence, with the take home income minus the monthly repayments, each person will have just S$1,680.00 left for the month. If they wish to save up ten percent (make it five percent per person), they only have S$1,596.00 left for the month.
That is if all things are equal. This is still excluding household bills like electricity, telephone, parking (if any), marketing, food, water, allowance to parents, own expenditure, ad-hoc things. All things considered, they can well just have approximately S$1,000.00 left each month.
What about insurance? Assuming one pays S$300.00 per month for insurance (and that is quite low already actually), this makes it S$700.00 per person. It is able to get by with S$700.00 per person.
Assuming the monthly expenditure of someone is S$400.00 (that is if they really scrimp and save), they will still be able to have S$300.00 left. That is not including the inflation rate through the years. Imagine if the cost of living has become higher and the income still remains the same yet still have to service the same payments, things may just get tighter and tighter.
And that is just with the couple alone! What about if the children come? Whatever extra after all household bills will go to the children. How is anyone really going to save up, if one does not earn at least five thousand per person? Even with just four thousand per person, expenses are already going to be pretty tight.
They have to continue the payments for ten years, after which they still have to pay off the housing loan after the car loan. If they are lucky, they can sell the car after five years, then use the money to repay the car loan and perhaps have enough for a new car. Or they sell off the flat after five years, then make a profit from it, using the money to get a new flat and pay off the existing loan.
Because of this, despite many of my friends hoping to be homemakers, they have no choice but to continue working, as without a dual-income, it is really difficult to raise a family and maintain a household. Unless the girl happens to be lucky and the guy holds a high-flying job that earns him a five-figure sum, or he is the heir of some big family business, otherwise many households just have to make do with a dual-income, public housing and just one car.
These are just the basics. What if the couple wants to have three kids, and want all their kids to go to good schools, be educated in sports and music and be all-rounders? More money will then be forked out to send the kids to the various lessons. And they may want to travel once a year too. Without a decent income, all these are not that possible.
So if I do not get a raise in the next few years, either I have to fight for it, leave my job for something better (if possible), or else forgo owning my own property and car and continue staying with my parents!
With S$8,000.00, there will be about S$1,840.00 per month in the Central Provident Fund. The downpayment will be S$60,000.00, remaining payment S$540,000.00.
If the couple is buying the flat for the first time and they bought a flat near where one of their parents are staying, they can get a grant of say S$20,000.00. Hence, the remaining payment is S$520,000.00.
Out of these, the couple can only get eighty percent of a housing loan, making it S$416,000.00. So the remaining S$104,000.00 still has to be paid via cash or Central Provident Fund (if enough).
Now for the monthly repayments. Imagine the tenure of the housing loan is thirty-five years (the maximum), and the annual interest is 2.5%. So for thirty-five years, the interest will be S$364,000.00.
Which means the monthly repayment will be (S$416,000.00 + S$364,000.00) / 35 / 12, making it S$1,857.14 per month. Assuming the couple does not utilise their Central Provident Fund because they rather save it as their retirement fund, this is the amount they have to repay each month.
Now, if the couple decides to buy a car. Assuming they buy a normal sedan at say S$70,000.00. If they are able to get a loan with an interest of three percent and a tenure of ten years, the total interest will be S$21,000.00. So the monthly repayment will be (S$70,000.00 + S$21,000.00) / 10 / 12, making it approximately $760.00.
If we round up the housing repayment plus the car repayment, it will be S$2,000.00 + S$800, making it S$2,800.00 per month. That is assuming the couple really has a combined income of S$8,000.00 per month to play with, otherwise things will be really tight after paying for the flat and the car.
So if both are working and the cost is split, assuming both are earning four thousand every month, each has to come up with S$1,400.00 per month. After deducting the amount put into the Central Provident Fund, the take home income per person will be S$3,080.00.
Hence, with the take home income minus the monthly repayments, each person will have just S$1,680.00 left for the month. If they wish to save up ten percent (make it five percent per person), they only have S$1,596.00 left for the month.
That is if all things are equal. This is still excluding household bills like electricity, telephone, parking (if any), marketing, food, water, allowance to parents, own expenditure, ad-hoc things. All things considered, they can well just have approximately S$1,000.00 left each month.
What about insurance? Assuming one pays S$300.00 per month for insurance (and that is quite low already actually), this makes it S$700.00 per person. It is able to get by with S$700.00 per person.
Assuming the monthly expenditure of someone is S$400.00 (that is if they really scrimp and save), they will still be able to have S$300.00 left. That is not including the inflation rate through the years. Imagine if the cost of living has become higher and the income still remains the same yet still have to service the same payments, things may just get tighter and tighter.
And that is just with the couple alone! What about if the children come? Whatever extra after all household bills will go to the children. How is anyone really going to save up, if one does not earn at least five thousand per person? Even with just four thousand per person, expenses are already going to be pretty tight.
They have to continue the payments for ten years, after which they still have to pay off the housing loan after the car loan. If they are lucky, they can sell the car after five years, then use the money to repay the car loan and perhaps have enough for a new car. Or they sell off the flat after five years, then make a profit from it, using the money to get a new flat and pay off the existing loan.
Because of this, despite many of my friends hoping to be homemakers, they have no choice but to continue working, as without a dual-income, it is really difficult to raise a family and maintain a household. Unless the girl happens to be lucky and the guy holds a high-flying job that earns him a five-figure sum, or he is the heir of some big family business, otherwise many households just have to make do with a dual-income, public housing and just one car.
These are just the basics. What if the couple wants to have three kids, and want all their kids to go to good schools, be educated in sports and music and be all-rounders? More money will then be forked out to send the kids to the various lessons. And they may want to travel once a year too. Without a decent income, all these are not that possible.
So if I do not get a raise in the next few years, either I have to fight for it, leave my job for something better (if possible), or else forgo owning my own property and car and continue staying with my parents!
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