I read this article a couple of days back. It’s been going viral (kind of) because it’s titled, “Why Most Singaporeans Are in Debt” and because it probably resonates with many people who lament at the perceived lack of social mobility in their lifetime or the increasingly difficult conditions that we’re living in (check out the latest inflation rate figures, especially the figures for housing and transport which generally are necessities).

However, if I wrote an article with that title, my answer would simply have been:

“Because they bought an apartment/flat.”

C’mon. It’s not that difficult to figure out that if one is like the couple profiled in the writer’s post (actually this is where I disagree with the article again because it should have been ‘most young Singaporean adults looking to get married/just married’), buying your own place to stay would have effectively dropped you in the ‘in debt’ category.

Technically, since the banks/HDB has given a loan, you won’t be considered in a net debt position if your current home value is above the value of your existing loan but let’s not get there because in reality, most people wouldn’t voluntarily give up their homes in order to stop paying the home loan.

The thing here is that are most Singaporeans (going by that writer’s definition of Singaporeans) really over-extending themselves? Debt in itself is not a bad thing. Otherwise, my grandfather would never have set up his own company in the 70s and my family wouldn’t have moved up to the middle-class; Students from lower income families would never have the chance for higher education and therefore lift their families out of poverty (In general, higher education is still one of the best ways to escape from poverty); Young couples wouldn’t be encouraged to produce next generation’s labour. Debt only becomes bad when you put yourself in the situation where it gets out of control and servicing it becomes unsustainable (applicable to countries too).

My feel is that despite the good intentions of the writer, it would have been better and more accurate if first, he focused on the demographics- are most Singaporeans really like the ones profiled in his story? Then second, what is their level of prior savings compared to the level of spending on the wedding, honeymoon, jewellery, car and other expenses mentioned. Is the debt level sustainable vis-a-vis cashflow from monthly income?

I don’t have the answers to that but my take is that if one were truly concerned about this issue, one needs to approach the issue with a better view of reality rather than overly rose-tinted or whatever the opposite of that is.

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