SINGAPORE – It took a pandemic to make many people realise that health is more valuable than wealth, proving that adversity is still life’s best teacher.

In a recent survey by insurer AIA Singapore, around 30 per cent of respondents said nothing is more important than staying healthy and being able to take part in activities they enjoy.

Some even said that instead of focusing on just growing their wealth, they would like to strengthen their immune system, a sign of the Covid-19 pandemic’s indelible impact.

In comparison, almost the same number of respondents said that luxury items and indulging in the high life were no longer important. With inflation further propelling the costs of daily necessities, they said they would give up splurging on non-essential items in a flash if they needed to tighten their belts.

After all, when the outlook is uncertain, it is better to have a healthy bank account than a closet full of branded items.

Not surprisingly, AIA Singapore’s Live Better study revealed that mounting economic uncertainties have taken a toll on the quality of life for many people. When it comes to achieving a desirable lifestyle, one in every two respondents indicated being far from achieving his goals.

Here are some highlights from the survey and how you can manage your expenses better.

Top five money woes

If you shop for groceries regularly, you would have noticed that many items have gone up in price.

While the costs of essential food items have been mostly stable, those who prefer finer fare like exotic fruit and snacks would feel the pinch as prices for some of these items have shot up by 10 per cent to 30 per cent.

1. Rising costs

Not surprisingly, the AIA survey found that having to shell out more money each month is the top concern for most families here. If you feel that your pocket is being hit, it is time to start looking closely at your expenses.

While it is hard to increase your household income immediately, you can certainly slash expenses overnight, especially for non-essential items. After all, overspending is the reason many people end up in debt.

If your family has been dining out frequently, having more home-cooked meals will immediately slash outlays on food and transport.

2. Insufficient savings

You will naturally find it hard to save more if you are spending more. The way to reverse this trend is to keep tabs on how everyone in the family spends and find expenses that can be cut.

The last thing you should do is to try to maintain your lifestyle with credit cards and then roll over the debt. That just leads to a debt trap that will inflict more pain later.

Finally, not splurging on overseas trips can help in saving more money for rainy days.

3. Rising healthcare costs

You can reduce this financial risk if you have adequate medical coverage. At the very least, plan for healthy savings in your MediSave, which pays for the national health insurance plan that helps defray hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy.

MediSave can also pay for CareShield Life, a long-term care insurance scheme that provides basic financial support should you develop severe disability, especially in old age.

4. Retirement

If you are facing money problems while you are still working, imagine how tough life would be when you retire and don’t have a monthly income. This is why it is crucial to start planning ways to get continuous monthly income in your old age.

The easiest and most cost-effective way is to ensure you have a decent sum in your Central Provident Fund (CPF) so that you can join its lifelong annuity scheme, which pays holders up to $2,500 a month from age 65.

Go to the CPF website to learn more about the CPF Life scheme.

5. Inadequate insurance coverage

Many people, especially those in their 30s, are so focused on investing that they forget that they are not invincible and can be hit by severe illness or other calamities. If you truly care for your loved ones, you should plan for such risks so that you still have enough money to weather life’s worst storms.

Many people view whole-life policies as poor cousins to stocks and investment funds, which yield better returns. But they forget that life policies also offer protection, on top of allowing them to save a bit more for old age.

High-income earners feel the pinch too

The AIA survey shows a common problem faced by people who enjoy high monthly incomes – the more they earn, the more they spend.

It seems hard to believe, but many high-income earners have high amounts of debt because they overspend on big-ticket items such as property, cars and luxurious lifestyles.

Close to 40 per cent of those who earn $40,000 or more a month say they are not prepared for unexpected expenses, which are the main obstacles that derail their plans.

Indeed, those who say so admit that they do not have much money left every month after settling all the bills because they have too many loans that have started to eat into their savings.

No wonder their biggest fear is losing their jobs or getting a big pay cut as this puts them at risk of bankruptcy.

Money woes can impact health

While having money alone may not solve all of life’s problems, not having enough can lead to sleepless nights.

For instance, poor financial habits that result in overspending and high debt are among the top causes of mental health-related issues for those aged 25 to 44.

In addition, dealing with healthcare and hospitalisation costs is also one of the top struggles faced by most age groups when tackling mental health issues.

Some of these problems could be avoided if people watched what they ate and exercised more. The survey found that those aged 35 to 54 were the least committed to taking care of their physical wellness by not exercising and sleeping enough and not watching their diet.

If there is a lesson to be learnt from the survey, it is that everyone should cultivate the discipline of managing both health and wealth well. You cannot choose to neglect either because they are intertwined.

If you manage your finances well and do not overspend, you will probably sleep better at night, and this, in turn, will not negatively impact your overall mental well-being.

Similarly, if you invest the time and effort to take care of yourself better, you are likely to avoid many serious ailments that are caused by lifestyle-related habits.

Otherwise, you may end up spending more on healthcare, leading to a vicious circle of reducing your savings and impacting your well-being in old age.

There is a huge incentive for you to excel in both these areas – you can live better because with better health, you will definitely enjoy spending your wealth and in more ways too.