Due to the rising cost of living, we must not to be over-committed in our spending and budget our income wisely. By budgeting and planning our financial commitments as well as income, we can avoid debts and make the most of our income.
We have to be realistic about what we can afford. It is easy to become financially over-committed. Our monthly commitments and extra bills would increase for example when we sign up for a new service such as satellite tv or a post paid mobile line ( by contract ) buy something on hire purchase or add to a credit card debt.
Another reason for financial over commitment may be a change in personal circumstances resulting to a drop of income, for example, if one loses his job or meet an accident resulting in loss of earning or the need to stop working. When this happens, we have to change our spending priorities.
The most important thing a person has to do is to review his or her budget as it can help them plan ahead and make the most of their income if any of the above happens to them. They must identify their commitments, for example, mortgage, rent, bills, cars and work out how much they cost?
It is also important to review the budget regularly, because circumstances are likely to change. By working out the budget we'll know how much money we have for our essential living expenses, such as household bills, rent or mortgage and food and how much we can afford to commit to other plans, like buying a car, taking out another mortgage, going on holiday or saving for the future.
By prioritizing our commitments we can make sure our basic needs are met and then we can decide what else we can afford and what we have to save for or do without. By shopping around and negotiating, not just for goods and services but also for financial products such as loans and credit cards, we can make our money go further.
If one is over-committed and have a debt problem, please, in my view, do not ignore the problem, hoping it will go away. It is also important to decide which debts are priority debts and which are not.
Signs when an individual may have a problem includes :-
1. Having rent or mortgage arrears
2. Taking out new loans to pay off old ones
3. Only paying the minimum amount on the credit card
4. Using a credit for day-to-day purchases
5. Ignoring letters from creditors
From debt cases that i've handled, too many people let debt take control over their life before they sought assistance to settle their problems. Consumers are encouraged to take control early to help stop spiraling debt especially at this time of year when people can be prone to mounting credit and debt as their thoughts turned to Puasa and Hari Raya expenses.
If one is really in financial trouble, one could seek help and assistance from Bank Negara, through their Credit Counseling and Debt management Agency ( AKPK ). The AKPK offers a helpline, providing free and impartial financial advice to people with debt problems.
The most important thing a person has to do is to review his or her budget as it can help them plan ahead and make the most of their income if any of the above happens to them. They must identify their commitments, for example, mortgage, rent, bills, cars and work out how much they cost?
It is also important to review the budget regularly, because circumstances are likely to change. By working out the budget we'll know how much money we have for our essential living expenses, such as household bills, rent or mortgage and food and how much we can afford to commit to other plans, like buying a car, taking out another mortgage, going on holiday or saving for the future.
By prioritizing our commitments we can make sure our basic needs are met and then we can decide what else we can afford and what we have to save for or do without. By shopping around and negotiating, not just for goods and services but also for financial products such as loans and credit cards, we can make our money go further.
If one is over-committed and have a debt problem, please, in my view, do not ignore the problem, hoping it will go away. It is also important to decide which debts are priority debts and which are not.
Signs when an individual may have a problem includes :-
1. Having rent or mortgage arrears
2. Taking out new loans to pay off old ones
3. Only paying the minimum amount on the credit card
4. Using a credit for day-to-day purchases
5. Ignoring letters from creditors
From debt cases that i've handled, too many people let debt take control over their life before they sought assistance to settle their problems. Consumers are encouraged to take control early to help stop spiraling debt especially at this time of year when people can be prone to mounting credit and debt as their thoughts turned to Puasa and Hari Raya expenses.
If one is really in financial trouble, one could seek help and assistance from Bank Negara, through their Credit Counseling and Debt management Agency ( AKPK ). The AKPK offers a helpline, providing free and impartial financial advice to people with debt problems.
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