Worried About The Upcoming GST Hike? Try These Money-Saving Tips
Theoretically, we can reduce our consumption to avoid being hit by the GST hike. In reality, this is easier said than done.
By Dawn Cher -
It might be tempting to lament about the impending GST hike and rant about how we consumers will be worse off for it. But this is the new reality that we’d best start getting used to, along with changes in our budget and spending habits.
With families affected by both inflationary price pressures and the higher GST (nine per cent) by the start of 2024, I’ll be covering what you can do now to reduce your bill later, and share some tips for your budget.
While a one to two percentage point hike might seem small, the reality is that this extra cost compounds over the entire supply chain. As the end consumer, we will feel it most when businesses pass on these higher costs of production to their suppliers and distributors, who then charge it back to us.
We already feel it happening on the ground. It wasn’t too long ago when cafe dates used to cost me $20 - $25 for a main and a drink; today, that bill comes closer to $30 - $40 per person.
In theory, the easiest way to avoid being hit by higher GST is to reduce our consumption. In reality, that is easier said than done, so here are some practical tips instead to help you along.
Bring forward big-ticket purchases to December 2023
If you have any planned big-ticket expenses coming up, like furniture, home renovation or flight tickets, consider buying them before the year ends. As long as you pay for the goods or services before Jan 1, the GST rate will still be charged at eight per cent.
For instance, I personally requested an advance invoice from my child’s enrichment centre to pay for his 2024 classes ahead of time. We have also purchased our flight tickets for my friend’s wedding next year to avoid a higher fare.
Use a credit card that gives you rebates on your spend
If you’re still using cash, PayNow or your debit card to pay for your purchases, consider switching to a credit card instead.
There are credit cards that can give you eight to 10 per cent cashback on your groceries and dining spend, which can go a long way in helping to offset your expenses every month. If your monthly spending is already above $800 a month, you may want to consider getting one of these cards.
Of course, make sure that you spend only within your means and pay off all your credit card bills on time every month. If you’re worried about busting your budget, you can impose a lower credit limit on your cards and make use of free apps like Dobin to track your spending for you.
Offset your spending with online shopping vouchers
Many people don’t know this yet, but online shopping platforms like Shopee and Lazada have been incredibly generous with offering cash vouchers that can go as high as $150 to $250 off. As someone who does most of my shopping on Shopee, I’ve been a beneficiary of their generous incentives.
During the recent 11.11 sale, for instance, Shopee was giving a $70 off $500 spend for consumers. My friends and I used this chance to load up on our gadgets and health supplements for the year, while spending less than what it would otherwise cost us.
Use cashback and coupon sites
For those of you who shop online, try going through cashback platforms such as ShopBack, Fave or HeyMax wherever possible so that you can clock additional rewards.
If you have to eat out, there are also several (free) food discount apps such as Eatigo or Grab Dine-In where you can easily get 15% to 50% off your food bill.
Eat at home more often
Eating out is a major expense, often costing anywhere between $15 and $30 per person at most eateries in shopping malls. With the upcoming GST hike, you can expect your bills here to increase even further.
As such, one lifestyle change that you may want to consider making is to cook at home more often. What’s more, compared to eating out, home-cooked meals are not only cheaper but healthier as well.
Save money and keep healthy? That’s a win-win situation.
Consider second-hand items
One of my best budgeting tip is to go for second-hand items wherever possible. Given how much Singaporeans shop and buy new items, you’ll be surprised at how many brand new (or hardly used) items I’ve been able to find on Carousell or Refash for a fraction of their original price.
Children toys, furniture, books and clothes are some of my favourite items to get preloved. Not only does it cost me less, but it also allows me to do my part towards reducing environmental waste.
We may not be able to do anything about the impending GST hike, but we can certainly reduce its impact on our budget by making a few lifestyle changes, and bringing forward big-ticket items to this year instead.
Dawn Cher is a mother of two boys who chose to hire a confinement nanny and recuperate at home. As the founder of leading financial blog SG Budget Babe, she also shares various money hacks and tips on how parents can do more while spending less.