Many years ago, I struggled financially where I had piles of debt such as credit card debts, personal loan, mortgage loan & car loan. It was up to a point where I was unable to cope with those debts & I remembered I didn’t even dare to look at my bank statement or answer any unknown calls. Times were hard back then where I needed to pay everything with limited cash. That all resulted in delayed payments & my car was repossessed. Those were the bad days but I’m glad that it happened to me or else this blog will never exist.
It all started when I began my first job & had the mindset that I could buy whatever I wanted with my money. If I can’t afford to buy it, I could just use my credit card to swipe & figure out a way to pay it later. Things that I spent on include alcohol, branded clothes, handphones, holidays & other stuff. It was a moment where I had 2 credit cards & I had to pay minimum payment because I couldn’t afford to pay more. I had also took personal loan to start my gym business.
This whole bad money management cycle went on for almost 8 years & I finally came to a realization that I needed to change my life. No mater how much I earn, I still couldn’t have much saving with my bad spending habits. The only good thing that I did during that period was to purchase my first house which I managed to sell it DESPERATELY to clear a portion of my debt.
Clearing off my debt was not an easy journey. I had to plan my financial with high discipline & minimize my daily spending as well. After I sold my house, I had 4 personal loans, 1 credit card debt & my car loan to be paid off. Total repayment for all debt made up to RM2800 a month with some loans that was already long overdue that I was unable to transfer online anymore as they have removed me from their borrowing facility list. I had to renegotiated some of the repayment as well. Trust me, it was a nightmare & I can’t imagine myself going back to that life again.
In order for me to clear off each debt, I had to set a goal on a specific timeline. How soon do I plan to clear off my debt? Second question was, how much can I afford to pay on a monthly basis? So I went on to set my goal of 2 years to clear off my debt & my budget to clear off my debt is RM3200. That was a hard squeeze out of my salary with a daily meal budget of RM20. At that point my strategy was simple, maximizing my debt & loan repayment by paying extra & once one of the debts is paid off, I’ll use that money to pay for another debt. Each loans & debts have different timeline to be paid off & my first pick was the one with the shortest timeline.
It took me almost 2 years to clear my debts & while clearing my debts, I was also surveying on investment or business option once my debt is cleared. My life started to change when I decided to educate myself on personal finance. It all started with online article & blogs & I went on to read more books on personal finance & investment. The moment when I fully paid off my debts, I cant describe to you how relief & emotional I was but I even felt in while writing this to you. It felt really good at that point when I finally paid off my last debt which is my car loan. I managed to pay off everything 2 months ahead of my planned repayment timeline.
To some of you that are reading this, we will always have the urge to spend money or to make some wrong decision. Spending future money like credit card can be as simple as a swipe but paying it off can be very stressful & costly. If you are in debt, do not stress yourself out. All you need is a proper plan & discipline. I am sure you are able to clear it off.