SINGAPORE — Even with a take-home pay of S$10,000 a month, Mr Leon Tan, 32, is using a "buy now, pay later" scheme, which is a payment method allowing consumers to pay for purchases down the track in instalments.

Mr Tan, a compliance officer at a fund management firm, is not alone in trying to ease cost-of-living pressures by deferring payment of some of his purchases.

A joint survey by the Institute of Policy Studies (IPS) and news channel CNA has just found that nearly seven in 10 young Singaporeans have used such a scheme, with higher income earners more likely to have done so.

The researchers surveyed those aged 21 to 39 to try to understand financial attitudes and behaviour among younger Singaporeans. They also investigated attitudes and behaviour related to debt, savings, coping with the cost of living, as well as planning for the future.

The survey was done in 2022, with the full findings released on Monday (April 15). Some of the initial findings were discussed on an episode of CNA's Talking Point programme in April last year.

TODAY looks at five key findings from the survey.

1. About two-thirds of respondents (65.4 per cent) have used a "buy now, pay later" plan, with high-income earners or those with credit cards more likely to have used at least one

Respondents aged 30 to 34 were the most likely to have used such plans, with 72.3 per cent in this camp. In contrast, only 53.2 per cent of those aged 21 to 24 have used at least one "buy now, pay later" plan.

Mr Tan said that he uses SPayLater, a plan offered by e-commerce firm Shopee and another plan called Atome to pay for purchases in instalments.

He uses such methods only when they offer no interest charges because he is "penny-pinching" in the midst of the rising cost of living.

"A dollar today is worth more than a dollar in the future, so I think it is worth it to use a 'buy now, pay later' plan to save on costs now," he told TODAY.

Among those earning between S$6,000 and S$7,000 a month, more than eight in 10 respondents indicated that they had used at least one "buy now, pay later" scheme.

On this finding, Dr Teo Kay Key, a researcher with IPS who was involved in the survey, said that high-income earners will have more liquidity in their bank accounts to use for different expenses than low-income earners and they can spend more in general.

"To these high-income earners, they likely do not see indebtedness as something to be avoided; with a steady stream of income and savings, making purchases using these schemes likely does not incur additional financial risk, and can be seen as the savvy thing to do."

2. Almost nine in 10 respondents do not spend all their income each month, with younger respondents spending a smaller proportion than their older counterparts

A significant majority of respondents (88.8 per cent) said that they spend within their income every month.

About 42.3 per cent of respondents aged 30 to 34 feel that they definitely or probably spend more than they earn, compared to under 36 per cent of the other three age cohorts in the survey.

Across income brackets and employment, those earning below S$3,000 were most likely to think that they spend more than they earn, while full-time employees are the least likely to think so.

Respondents in the youngest age cohort, 21 to 24 years old, reported spending a smaller proportion of their income than other groups.

The study identified reasons such as "fewer financial obligations", "different lifestyle", and their parents "paying for some expenses in their stead" as reasons for this.

The vast majority of respondents (92.6 per cent) have felt personally affected by the rising cost of living, with those aged 21 to 24 (70.7 per cent) generally feeling more heavily affected than older respondents.

Why the difference? Perhaps because younger respondents, being in school, have not started working full-time, or if they are earning, they are not on higher incomes and have less savings.

One younger person who has felt the pinch is Ms Laura Lee, a 24-year-old business management student at the Singapore Institute of Management.

She used to spend about S$200 to S$300 a month on private-hire cars and food deliveries but has cut back in these areas when other costs have risen.

Ms Lee, who earns an average of about S$1,500 to S$2,000 a month from her two part-time jobs, said that she now tries to cook and eat at home more frequently to cut costs.

4. Those aged 25 to 39 spent the most on food, clothes and footwear, and utility bills, while those aged 21 to 24 are more likely to spend on hobbies

Respondents aged 25 to 39 tended to spend the largest chunk of their income on food (around eight in 10), clothes and footwear (over six in 10), and utility bills (about six in 10).

Telco bills for mobile devices were another key outlay for those in this age bracket, with more than half of them naming this as one of their top monthly payments.

For the youngest cohort, aged 21 to 24, food was not surprisingly a key outlay, named by 82.4 per cent. However, fewer of them listed utility bills (38.7 per cent) than older respondents. 

Ms Lee said that she spends on her hobbies about "once every other month". Recently, she spent S$15 on a karaoke machine, adding that she now tries to think a bit more before splurging on frivolous items.

"I did consider before buying it. I would usually stack up items online in my cart and I won't buy them straightaway. I might regret it, but I don't mind buying it as I usually go for karaoke sessions with my friends," she added.

Mr Asyraf Ahmad, a 23-year-old student studying linguistics and psychology at Nanyang Technological University, told TODAY that he has tried to cut down on his spending.

Still, he sometimes splashes out on car rentals because his hobby is going on car rides "for fun". 

Some 70.3 per cent of respondents had a retirement savings plan or had "more or less" done so. Older people were more likely to have done this, whereas those aged 21 to 24 were slightly less likely to be sticking to a retirement saving plan.

Almost two-thirds, or 65.1 per cent, of those aged 30 to 34 have a retirement savings plan, compared to just 40.7 per cent of those aged 21 to 24 who do. About 60 per cent of those aged 25 to 29 and 35 to 39 have also tried to figure this out.

Ms Lee saves regularly and has investments and endowment plans allowing her to earn a lump sum after a few years.

Still, she admitted that she was slightly behind in her plans given that she is on the lower end of the income spectrum.

As for Mr Ahmad, he works part-time as a financial adviser and makes about S$800 a month.

"I do set savings goals and just try to save whenever I can, but I don't have a concrete plan in place because I am still in university and circumstances can still change — I still have two more years to go before I graduate, so I think I still have time to think more deeply about it," he said.

Dr Teo from IPS said that the survey findings indicated that young people are "not that impulsive when it comes to their budgets".

"They do take note of what they can and cannot afford as well as the costs of living, and make their financial decisions accordingly. It does debunk the myth that young people are impulsive and do not have any plans for the future," she added.