Do you ever dread paying your monthly credit card bills or other loans? I personally feel so even though I don’t have much debt aside from my house & car loan. I bought my second car in 2020 when my first car was in a condition where it was giving me multiple issues. When I finally paid off my first car loan, I honestly felt relief that I don’t have to pay RM450 anymore each month. That moment of relief lasted me for almost 3 years & now I am stuck with RM1393 each month for the next 5 years with my new car loan. Rather than extending my car loan to 9 years & paying extra interest, I would rather pay more for lesser interest & shorter repayment tenure.
To be very honest, paying for any type of loans or fixed expenses can be really tiring in my opinion which is why I am trying hard to minimize my fixed expenses or stretch any of my loans. The reason why I am mentioning this is because of some of my observations on how some people are stuck in financial debt & struggling to get out of it. Two main reasons why they are still stuck in such a situation is due to the continuation of accumulation of debt & constant upgrade of their lifestyle.
Accumulation of debts is something that I find to be really tiring. If I were to choose to use my old car vs buying a new car, I would rather use my old car than spend extra RM1393 for my car loan. Of course, this situation is unavoidable as my 12-year-old car finally spoil & it became really expensive to repair. I have seen some people where they are upgrading their car every few years whenever their car loan tenure has ended or they will just upgrade it whenever they saw the car they like. Similarly, there are also some people who often purchase new phones each year even their old phones are still in good condition. Imagine if they are paying it with their credit card & convert it into a 12-month zero-interest payment period. 1 year later, they purchase another new phone & selling off their old ones. It is a never-ending cycle for their debt & paying it would be really tiring.
Another factor where some people will be stuck in debt is due to the constant upgrade of their “lifestyle”. If you are earning RM10,000 each month & your monthly fixed expenses are high vs those who have RM5,000 with low monthly fixed expenses, those who earn RM5,000 may have more savings than you. There is no correlation between having a high income equals high commitment or spending. Ask yourself, when you were a fresh grad & just started to work vs the current you that are working more than 5 years with a higher salary. Do you spend more money on your food or other expenses? Did you upgrade your “lifestyle” over the years? If yes, how much has it affected your finances? Do you find yourself in a situation where no matter how much you earn, you will still end up with no savings & having high debt?
I can truly relate to this as I had no savings until I turned 27 years old which was when I finally cleared my debt & started to have more savings in my bank account. It was not only due to my credit card expenses but it was also the so-called “lifestyle” where I try to keep up with whenever I earn more money. When I earned RM1,000, I had no savings but I was still able to survive & pay my car loan. When I earned RM5,000, I still had no savings while paying for the same car loan & accumulating more debts. It was truly due to those “lifestyles” where I am trying to chase but ended up making myself poorer. Thankfully, I learned my lesson & managed to turn my life around.
If you are stuck in a situation where you are having never-ending debt despite earning a high income, you should start to look into all this unless you don’t mind being in a situation where you have no savings & constant debt. If you are tired of having never-ending debt with no savings, you should truly start cutting all those debts that you have & start planning a better financial for yourself by “downgrading these lifestyles”.
OSS!
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