Making good life decisions is important. So is making smart financial decisions.
In most cases, the two overlap. Choosing not to spend on an expensive handbag or a luxury car you do not need is often both a wise financial decision and a sensible life choice. You keep more money to invest while avoiding becoming overly fixated on status or material possessions. Likewise, giving up late-night drinking in favour of more rest is usually good for both your gut health (a good life decision) and your bank balance (a smart financial decision).
But that is not always true.
Sometimes, the right decision for your health, relationships, personal fulfilment or peace of mind may come with a financial cost. It may mean earning less, spending more and taking longer to reach financial independence.
In other words, not every good life decision will need to be a good financial decision.
Here are seven examples of choices that may make perfect sense for your life, even if they do not always make the most financial sense.
#1 Having Kids
Having children is one of the clearest examples of a good life decision that is not necessarily a good financial one, especially in modern Singapore.
The truth is that having kids in Singapore will literally cost you your retirement. This is because our conservative estimate of the cost of raising a child in Singapore, from birth to age 18, is about $273,000, which exceeds the current Full Retirement Sum of $220,400 as of 2026. You can now understand why the current fertility rate is 0.87.
But good life decisions are not always made on a spreadsheet. For many couples, having children is something they deeply want, even if it means spending more, saving less, and delaying other financial goals. The financial trade-off is real, but so is the personal fulfilment and joy (and exhaustion) that parenthood can bring.
#2 Paying Off A Low-Interest Home Loan Early To Be Debt-Free
Paying off your housing loan early so that you can live debt-free sounds like a great milestone to achieve. And from a life perspective, it often is. There is real peace of mind (that money can buy) in knowing that your home is fully paid for and that you no longer owe the bank or HDB anything.
But being debt-free is not always the best financial decision.
For example, if you are servicing an HDB concessionary loan at 2.6% per annum, there are like good opportunities to earn a higher return elsewhere. Even if you don’t know how to invest and simply leave the money in your CPF Special Account for retirement, you can earn a compounded interest of at least 4.0% per annum, which is already higher than the interest cost that you are paying on the loan.
This is a classic example of a decision that makes sense in dollars and cents, but may still lose out to emotional comfort. Choosing to keep a low-interest loan while your money earns more elsewhere may be the smarter financial move, but some people may still prefer the certainty and peace of mind that comes with being completely debt-free.
And that is a perfectly good life decision to make as well.
#3 Buying A Car
For people trying to be financially disciplined or aiming for financial independence, buying a car in Singapore is often seen as a cardinal sin.
That is not hard to understand. The cost of owning a car for over 10 years can easily add up to around a quarter of a million dollars. In other words, that is money that could otherwise go towards investments, a home, or even a Full Retirement Sum. From a purely financial perspective, it is difficult to argue that buying a car is a smart move.
But life is not lived simply about saving as much money as possible
For some families, owning a car can meaningfully improve daily life. The convenience of being able to drive the children to school before work, visit elderly parents more easily or head out for weekend trips to the beach, parks or even Malaysia can make family life smoother and more enjoyable.
So yes, buying a car in Singapore is likely to be a poor financial decision. But for some households, it may still be a good life decision because of the convenience, freedom and family experiences it makes possible. Just make sure the amount that you spend on your vehicle is within your financial means.
#4 Owning A Pet
Owning a pet is another example of a decision that can make a lot of sense in life, but very little sense financially.
In Singapore, the cost of owning a pet can add up quickly. For a dog, upfront costs such as adoption or purchase, vaccinations, and initial supplies can easily exceed $2,000 to $5,000. On an ongoing basis, expenses for food, grooming, routine vet visits, and occasional medical treatments can range from $1,500 to $3,000 a year. Over a typical lifespan of 10 to 15 years, the total cost can realistically range from $20,000 to $40,000, assuming no major medical emergencies.
From a purely financial perspective, this is money that does not generate any monetary return. In fact, it is a long-term financial commitment that reduces your ability to save and invest.
But, as with many of the examples before this, the value of having a pet is not measured in dollars.
For many people, pets provide companionship, emotional support, and even a sense of routine and responsibility. Coming home to a pet after a long day at work, spending time walking your dog, or simply having a constant companion in the house can significantly improve one’s overall well-being. For families, pets can also play a role in teaching children empathy and responsibility, while creating shared experiences that become lasting memories.
Read Also: How Much Does It Cost To Own And Keep A Dog In Singapore?
#5 Regular Family Holidays
Going on regular family holidays is often seen as a luxury, especially if you are trying to be financially disciplined.
From a purely financial perspective, holidays are a clear expense. A family of four travelling once a year to a location like Japan or Australia can easily spend $5,000 to $10,000 annually. Over 10 years, that adds up to $50,000 to $100,000. If that same amount had been invested instead, it could have compounded into a significantly larger sum over time.
In that sense, regular holidays are not a “smart” financial decision, especially if you are always travelling during the school holiday peak period. But, like many of the examples before this, the value of holidays is not purely financial.
Travelling as a family creates shared memories that are difficult to replicate in everyday life. Being away from work, school routines and daily distractions allows families to spend more intentional time together. Whether it is exploring a new city or navigating a foreign place together, these experiences often become some of the most memorable moments for both parents and children.
So while regular family holidays may not make financial sense on paper, they can still be a worthwhile life decision if they are time and money well spent.
#6 Taking A Lower-Paying Job That You Are Passionate About
In an ideal world, the job that suits us best and that we genuinely enjoy would also be the one that pays us the most. Unfortunately, for many people, that is not the case.
Choosing a lower-paying job, even if it is more meaningful or aligned with your interests, comes with a clear financial trade-off. A difference of even $1,000 a month translates to $12,000 a year, or $120,000 over a decade, even before we factor in bonuses, increments and investment returns.
From a purely financial perspective, this is not an optimal decision. Higher income generally provides more options, whether it is investing more, upgrading your home or building a larger retirement buffer.
But work doesn’t need to be just about income.
For many people, job satisfaction and mental well-being play an equally important role. In fact, spending more time in a role that you love with people you enjoy working with can be a better life decision than working in a job that you absolutely hate, even if it pays you more and requires you to work less.
There is also a sustainability aspect. A higher-paying job that leads to constant stress or dissatisfaction may not be something you can sustain over the long term. In contrast, a lower-paying role that you are passionate about may allow you to perform better, stay longer and build a more fulfilling career.
So, while taking a lower-paying job may not maximise your financial outcomes, it can still be a good life decision.
#7 Transiting From A Dual-Income To A Single-Income Household
Lastly, transiting from a dual-income household to a single-income household can be a very difficult financial decision for the family, but it may also prove to be a good life decision.
In a dual-income household, giving up one salary, even for a few years, can have a meaningful financial impact. A parent earning $5,000 a month would be giving up $60,000 a year. Over a 5-year period, this amounts to $300,000, excluding CPF contributions, bonuses and increments, and career progression.
From a purely financial perspective, this is rarely the optimal move.
But life is not always about optimising income. Sometimes, a parent may want to be more present during a child’s early years. In other cases, it may be necessary to care for an elderly parent who is unwell and needs support through treatments, hospital visits or daily living.
There Is No One-Size-Fits-All Answer
Should you make a decision based on what is good for your life, or your finances?
The answer depends on what you value most. For some people, the priority is clear: maximise income, grow investments and retire as early as possible. For others, money matters too, but mainly as a tool to support the kind of life they want to live. That may mean spending more time with family, choosing meaningful work over higher pay, or making decisions that improve overall well-being even if they slow wealth accumulation.
Ultimately, the point is not to label these decisions as right or wrong, but to clearly recognise the trade-offs. Not every good life decision will make financial sense, and not every good financial decision will lead to a better life. The key is to be intentional, understand the costs, plan for the impact and make choices based on what matters most to you at different stages of life.
After all, money is meant to support the life you want to live, not become the goal in itself.
Read Also: 5 Types Of Quiet Luxury In Singapore
