5Cs Singaporeans should actually aspire to

Cash. Car. Credit card. Condominium. Country club membership. For decades, Singaporeans worked towards these “5Cs”. They were a recognisable picture of financial success, which we measured through possessions, income and social status.

But today, it seems many of us want a broader conversation about what makes a good life.

During the 2023 Forward Singapore exercise, which engaged more than 200,000 people, more Singaporeans said they wanted a definition of success to include fulfilment, meaning and purpose.

Money of course remains important.

• It buys us security, convenience and experiences.
• Owning a car or condominium are also perfectly worthwhile personal goals especially if they benefit our families.

But maybe it is time for us reframe these goals into a new set of 5Cs, one that values emotional and mental well-being over personal possessions.

These five may be worth considering: cushion, coverage, choice, connections and contentment.

1. Cushion: having enough savings to weather difficult times

Losing a job, dealing with a family emergency or facing an unexpected expense can put even a reasonably high-earning household under financial pressure.

• The experience can be considerably more stressful if you have little money to fall back on.

That is why the first of our new Cs is a financial cushion.

Most financial experts recommend keeping at least three to six months of expenses as emergency savings. Those with irregular incomes, such as freelancers or commission-based workers, may need a larger buffer.

Your emergency savings should be readily accessible, preferably in savings accounts or other low-risk, liquid instruments. Money tied up in investments for instance may be difficult or costly to access when needed.

It may also help to separate your emergency savings from money earmarked for other goals. Having S$100,000 in the bank may seem reassuring, but less so if most of it is needed for an upcoming renovation or property purchase.

A useful starting point is to work out how much your household spends on essentials each month, including loan repayments. You can then estimate how long your available savings would last if your regular income stopped.

2. Coverage: protecting yourself against life's bigger risks

An emergency fund may help you through a few months without income. But some financial setbacks last years.

Imagine someone who develops a serious medical condition and can no longer work.

• Hospitalisation insurance may help cover eligible treatment costs. Yet the person's household still needs to pay for food, utilities, housing and other expenses.
• If the condition results in a permanent disability, those financial responsibilities could continue for decades.

This is where insurance becomes particularly important.

In Singapore, MediShield Life provides all Singapore Citizens and Permanent Residents with basic protection against large hospital bills and certain costly outpatient treatments.

CareShield Life provides monthly payouts for qualifying severe disability. Singapore Citizens and Permanent Residents born in 1980 or later are automatically covered from age 30, while eligible older residents can choose to join.

These schemes form an important foundation, but they may not address every possible financial consequence of illness or disability.

Depending on your circumstances, additional protection such as critical illness, disability income or life insurance may be useful.

• Hospitalisation insurance helps pay eligible medical bills but does not generally replace income lost during an extended period away from work.
• Critical illness or disability income insurance may help address some of those financial consequences, depending on the policy.
• Life insurance may also be particularly important for someone whose spouse, children or parents depend on their income.

The amount and type of protection you need may vary considerably, dependent on your circumstances.

• Someone in their 20s with no dependants may be primarily concerned about medical expenses and the loss of their ability to earn an income.
• A parent supporting young children may also want to ensure that the family can continue meeting its expenses if something happens to them.
• Even people with substantial savings have reason to think about protection. A serious illness could require them to draw down investments or retirement savings much earlier than planned.

That does not mean accumulating as many insurance policies as possible. Paying excessive premiums can itself place unnecessary strain on your finances.

Instead, review what protection you already have, which financial risks you can reasonably absorb through savings and which could have serious long-term consequences.

A financial representative can help you assess whether your existing coverage is suitable for your needs, particularly after major life changes such as marriage, having children or approaching retirement.

3. Choice: having the freedom to spend your time and money on what matters

A condominium remains an aspiration for many Singaporeans.

• For some, upgrading from an HDB flat represents years of hard work and an improved quality of life.
• Others may have little interest in making that move. They might prefer to travel more frequently, spend on experiences with their families or direct their savings towards an earlier retirement.

There is no reason to think one goal is less important than the other simply because it is less visible.

In fact, research suggests the way we choose to spend our time and money influences how satisfied we feel with our lives. In a 2019 study, researchers followed approximately 1,000 university students as they graduated and entered the workforce.

• Students who placed greater importance on time than money tended to choose activities they found more personally rewarding.
• A year after graduation, they also reported greater happiness, even after researchers accounted for factors such as their initial happiness and socioeconomic circumstances.

Another study published in 2017 found people who spent money on time-saving services, such as cleaning or other household tasks, generally reported greater life satisfaction.

• In a small experiment, participants reported greater happiness after spending money on a time-saving service than after making a material purchase.

Money gives us opportunities to make these choices, but our financial responsibilities affect which ones are available to us.

The next time you receive a bonus or pay rise, it is worth considering what you would most enjoy doing with the additional money. You may find that what you want most is something you cannot put in your living room or park in your driveway.

4. Connections: having people who make life better

The original “country club membership” represented more than luxury facilities. Part of its appeal was the opportunity to socialise, build relationships and belong to a particular community.

Those needs have not disappeared, but meaningful connections can be found in considerably less expensive places.

Friendships formed through school, work, sports, neighbourhood activities or shared interests remain important throughout our lives. And there is evidence those relationships matter for our health.

• A 2021 study involving researchers from Duke-NUS Medical School and Nihon University found older adults in Singapore who experienced loneliness tended to have shorter life expectancies and fewer remaining years in good health.
• At age 60, those who reported feeling lonely could expect to live approximately three to five fewer years than peers who did not report loneliness.

The findings show an association rather than prove loneliness alone causes shorter lives. Nonetheless, they highlight the importance of social well-being as people age.

There is also a financial aspect to supporting the people closest to us.

• Parents may want to provide for their children's education, while adult children may need to consider how they can support ageing parents.
• Making arrangements such as a will, CPF nomination or Lasting Power of Attorney can help loved ones manage important matters if something happens to us.

The value of a social circle has little to do with how exclusive it is. It is more about having relationships that we genuinely enjoy and want to maintain.

5. Contentment: knowing what is enough for you

Perhaps the most difficult of the new 5Cs is contentment.

• There is always someone earning more, living in a larger home or driving a more expensive car.
• And when we finally achieve something we have worked towards, it may not be long before another goal takes its place.

A promotion may lead to a higher salary, followed by an upgraded home, a better car or more expensive holidays. These can all be enjoyable rewards for years of hard work.

The difficulty comes when our expectations increase just as quickly as our incomes. We may end up needing considerably more money to maintain a lifestyle that once seemed luxurious.

Economists have studied this relationship between income, aspirations and happiness. A 2004 study found people with higher income aspirations tended to report lower life satisfaction, after accounting for other factors.

• The researchers also observed income aspirations increased alongside people's incomes and the average income of those around them.
• It helps explain why someone can become wealthier without necessarily feeling much better off. As their circumstances improve, their expectations may rise too.

That does not make ambition undesirable.

• Wanting to earn more, provide a better life for our families or achieve professional success can be powerful motivations.
• Financial progress also has real benefits, especially for people who are struggling to meet basic needs.

Contentment involves recognising which ambitions are genuinely important to us.

• For someone who loves driving, buying a dream car may be a goal worth saving for. Another person may be perfectly happy taking public transport and spending the money on travel instead.
• A larger home could make sense for a multigenerational household. For a couple whose children have moved out, downsizing may create more financial flexibility.

It can help to occasionally review major spending goals and ask whether they still reflect what you want from life.

You might discover that a goal you set ten years ago no longer matters quite as much. Or that something you once considered an indulgence has become more important.

What should a new set of 5Cs accomplish?

There is nothing wrong with wanting cash, a car or a condominium. For many Singaporeans, these remain worthwhile goals.

The difficulty was treating them as a universal checklist, as though everyone should aspire to the same possessions regardless of their circumstances or interests.

A new set of 5Cs should avoid making the same mistake.

• You may care more about your career than retiring early.
• Another person may prioritise family time, travel or maintaining good health.

What is useful about our five Cs is the opportunity to think about finances differently.

The original 5Cs were easy to recognise because they were things people could see.

The new ones are more personal because they support the things we want to do, the people we care about and the kind of life we hope to lead.

Written by: Great Eastern Lifepedia team

Frequently asked questions