SINGAPORE – While inflation picked up across all household income groups in Singapore in the first half of 2026, middle-income earners like F&B business owner Jason Chua are feeling the biggest squeeze.
The rising cost of living has posed some challenges for the 34-year-old and his wife.
With a four-year-old son and a baby boy due in August, Chua said it has not been easy for them to manage daily household and childcare expenses.
For instance, he said, the price of a 1.6kg tin of milk powder recently climbed from $72 to $79.50. His son finishes one tin every five to six weeks, so their costs mount up quickly.
This Singaporean dual-income couple falls in the middle 60 per cent income bracket – households with per-member monthly incomes higher than the bottom 20 per cent but below the top 20 per cent.
Data from the Department of Statistics (SingStat) on July 23 showed the overall inflation rate for middle-income households doubling to 1.8 per cent, from 0.9 per cent in the previous six months.
Excluding rents of owner-occupied accommodation, their overall inflation rate was 2.2 per cent, also the highest among all household income brackets. Since people who own their homes do not pay rent, the consumer price index figure that excludes rentals is more representative of the average household.
Chua, the founder of home-grown food and beverage business Beng Who Cooks, also has to juggle rising business overheads alongside his family’s expenses.
Jason Chua, founder of Beng Who Cooks, says he is contented because he makes enough to ensure that his family is well-taken care of.
PHOTO: COURTESY OF JASON CHUA
The Iran war which broke out in February has disrupted supply chains, driving up his raw ingredient costs by $300 to $500 monthly.
Petrol prices have also jumped, from around $140 to around $180 for a full tank.
Transport is a hefty expense for Chua as he has to travel daily between his home in Bukit Batok and the eastern part of Singapore, where his three stalls are. This results in him having to top up his petrol once every eight days.
“The expenses have become so high that (my) income is not catching up,” he said.
What’s fuelling inflation in Singapore?
According to SingStat, the overall price increase for all households in the first half of 2026 was 1.7 per cent year on year, an acceleration from the 0.9 per cent pace in the second half of 2025.
Excluding rents of owner-occupied accommodation, the overall price increase was 2.1 per cent, up from 1.1 per cent in the previous six months.
SingStat said the main drivers of inflation in the first half were food, pricier cars, health insurance and petrol, largely mirroring the same cost pressures in 2025.
These inflationary pressures were partially cushioned by lower education costs as households benefited from financial assistance schemes and lower fee caps at pre-schools, which were implemented in January 2026.
While overall inflation remains below the peak levels of late 2022, the latest figures indicate that the price pressures are building up again after a period of cooling.
To cushion the impact of rising cost pressures from the ongoing conflict in the Middle East, more assistance will be given to households and businesses, the Government said on July 29. The support package will cost around $900 million and comes on top of the $1 billion support package announced in April.
Two-thirds of the funding – $600 million – will be used to support households. This includes $300 more in CDC vouchers for every household, as well as additional rebates in October 2026 and January 2027 to offset utility bills, Second Minister for Finance Jeffrey Siow announced on July 29.
Beyond price pressures, consumers have other worries. Sumit Agarwal, professor of finance, economics and real estate at NUS Business School, noted that greater uncertainty over jobs and the economic outlook is making people more cautious.
Canada-headquartered financial services firm Sun Life’s Financial Resilience Index showed similar findings.
According to its 2026 study released on June 9, 81 per cent of its 1,000 respondents in Singapore said rising costs have made it harder for them to cover their monthly expenses. Around 95 per cent of the respondents cited grocery prices and 94 per cent named utilities as their main sources of financial strain.
Vincent Oh, senior lecturer of psychology at the Singapore University of Social Sciences, said these cost-of-living spikes and retrenchment fears are not merely “all in the head”, but are “very real challenges and realities” confronting many families.
Living within one’s means
Walter de Oude, founder and chief executive of Singapore-founded financial services platform Chocolate Finance, believed it is possible to be on a limited budget and yet not feel stressed over finances if individuals manage their cash flow well.
Chua, the F&B owner, copes with his financial pressures by making Grab deliveries to supplement the income from his food business.
He said he is not stressed even though his budget is tight and he has to pay off $1,500 every month towards a debt from his previous failed business.
“I have no savings,” he said, adding that he has not been able to put aside money for two years now.
Nevertheless, he is contented because he makes enough to ensure his family is well provided for.
“I enjoy spending on my wife and son, so I do not mind putting my own wants aside,” he said.
When earning more means spending more
Despite earning relatively more, some families feel stressed because of lifestyle creep, a situation where individuals live more lavishly when their income goes up.
Agarwal noted that social media has normalised discretionary spending, meaning personal wants are now increasingly viewed as necessities.
When spending on these “new” necessities outpaces actual income growth, families inevitably end up feeling cash-strapped and anxious.
Oh agreed, noting that a high-earner who lives a lavish lifestyle can feel more financially strained or dissatisfied than someone who earns less but does not spend as much.
“From a psychological viewpoint, I think it is natural for people to wish to spend some money on things that bring them joy,” he said.
“To expect people to live strictly within a fixed budget with a regimental focus on daily necessities is likely not reasonable.”
However, it is crucial for people to spend in moderation and avoid decisions that would severely strain their finances and add more stress, Oh added.
As Singapore households grapple with rising costs, the Sun Life survey found that many are making short-term trade-offs – 24 per cent are drawing down savings while 14 per cent have paused retirement contributions.
This trend leaves families less equipped to cope with future financial shocks.
In fact, less than half – 41 per cent – of respondents stated that they could sustain themselves for more than six months without income or external assistance.
Strengthening long-term financial safety nets
David Broom, chief client and distribution officer at Sun Life Asia, emphasised that people need to build an extra financial buffer for unforeseen circumstances.
This safety net ensures that if something unexpected happens – such as a job loss or an inability to work – they are prepared to respond.
The general recommendation is for individuals to set aside at least three to six months’ worth of one’s expenses as an emergency fund.
Those with irregular incomes are encouraged to save more, setting aside 12 months’ worth of expenses for emergency purposes.
This financial cushion is vital for 40-year-old Louis Koay, a self-employed financial adviser and remisier whose monthly income fluctuates.
As the sole breadwinner for his wife and two children aged six and three, he must also be especially cautious with his spending.
Koay keeps two separate accounts: a spending account for monthly expenses and a savings account.
Every month, he transfers a fixed amount of his income into his spending account, with strict limits on how much is allocated for essential expenses and how much for non-essential expenses.
The remaining funds stay in his savings account until they are allocated towards investments.
“This approach helps me control spending and consistently build wealth over time,” he said.
While Koay has a clear financial plan of his own, de Oude suggested that families can consider splitting their money into three pots.
Pot 1 consists of liquid cash for the immediate future needs, including emergency funds.
Pot 2 comprises low-risk investments, insurance and Central Provident Fund savings, which are meant to protect and grow wealth.
Pot 3 is money allocated to higher-risk investments, de Oude said.
For individuals like Chua, building up these pots of wealth will take time.
For now, he has mapped out a plan to put money aside once he clears his debts in 2028.
He intends to save about 40 per cent of his income between 2028 and 2029.
Thereafter, he will save 30 per cent and allocate the remaining 70 per cent for family and personal expenses.
He also plans to put some of his capital into low-risk stocks and is looking forward to the day he clears all his debts and can finally buy his wife a gift.
“Although she never says yes, I know that she will be happy if I buy her something.”
