ONLINE SHOPPING: Personal Financial Advice for Shopaholics

There seems to be a sleek online shop for everything these days as personal debt in Singapore is on the rise.

By Mel Zhu, Associate Financial Services Manager of Ignite Wealth Group, SG Alliance Pte Ltd

‘Oniomania’, the uncontrollable urge to buy things, has become
somewhat of an ‘acceptable addiction’ these days. With more people confined to closed quarters and working from home due to pandemic movement restrictions, online shopping has become a convenient way to access necessities, grab great bargains, and even quell boredom.

According to BestInSingapore1 , online shopping websites like Shopee, Lazada and Qoo10 have gained huge momentum, in the wake of the COVID-19 pandemic. Analytics reveal that some of the largest purchases were made by Singaporeans falling under the demographic of 25-34 years old, with an average S$440 being spent per shopper on e-commerce platforms. According to Credit Counselling Singapore2 , more than 10,000 people have fallen prey to financial troubles arising from overspending.

A recent Straits Times report3 reveal that personal debt for young people in Singapore has soared during the pandemic; the average personal loans and overdraft balances for under 30 rose by about 23 per cent in the first quarter of this year over the last three months of last year.

Arm yourself against financial cartastrophy

Know your Debt-to-Income (D:I) Ratio

Being aware of your debt-to-income ratio can help you take a reality check on your financial health every now and then. It’s important to keep track of your income inflow.

Get your debt-to-income ratio by dividing all your monthly debt payments by your gross monthly income. The lower the ratio, the healthier your financial shape to repay your loans.

There are other important ratios to calculate to determine financial well being both for the present and the future (i.e. savings, debt servicing ratios etc). As an experienced financial consultant, I can help you get an accurate picture of your financial fitness

Create a Budget and build an Emergency Fund

To have a strong financial plan and stay out of debt, it is important to lay down budgets – for even the most commonplace of activities like purchasing clothes, furniture, food, etc. Budgets help in keeping one’s balance in check – at the end of the day, it’s just math. On top of that, set aside at least three to six months of emergency funds as a buffer for any unforeseen events.

Start a Savings Fund

Every millennial has some large financial goals – to travel, buy a house or a car, or invest in education. Each time you think about making an online purchase, put that money aside into a savings fund to get one step closer to a larger goal instead.

As a financial consultant, my rule of thumb would be to set aside 20% of your take-home income as your savings. As much as half of that should be devoted to insurance protection. Saving more is fine, however, less may mean you will have to save over a longer period. Meanwhile, another 50% (maximum) should go toward necessities, while 30% towards discretionary items which includes online shopping.

Clear your Credit Card Debt

Most people fall into a debt trap because they fail to clear out their credit card debt. Credit cards involve payment of not just the principal debt, but the interest amount as well. It is in your interest to clear this out at the earliest, instead of allowing it to accumulate and deplete your wealth.

Practice better Self-Care

Many of us condition ourselves to believe that online shopping is the therapy we need. While making purchases does provide bursts of happiness, it may also be a subconscious way of dealing with deeper emotional issues such as anxiety and depression. It is important to be aware and adopt healthier forms of self-care like taking time out for ourselves, spending quality time with loved ones, exercising, and more, rather than rely on the temporary buzz that comes when a package arrives in the mail.

Craft your Financial Vision, write it down and run with it!

As the saying goes “The man who fails to plan, plans to fail.” When you don’t see a future filled with promising ideals and financial objectives to meet specific needs, you won’t be paying much attention to what is required in the present to save up and accumulate for. Few wonder why the wise are seldom seen splurging away their wealth but make careful decisions to build their wealth either through savings, or through informed investments.


Mitigating online shopping whims is just one of the many small ways you can set yourself up for a brilliant financial future. If you are unsure on how to start your financial journey, drop me a line and let’s have an enlightening chat over a cup of coffee.

1 BestinSingapore
2 Straits Times
3 Straits Times


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