Whether you’re a fresh graduate struggling with student loans or someone with heavy card debt, you don’t have to live with debt forever. The original version of this article was published on HelloGold.com.
Can’t catch a break under the crushing weight of credit card debt, student loans and living expenses? You’re not alone. Almost 50% of youth in Malaysia are deep in debt as of 2018.
We’re here to help you get out of debt as quickly as possible so you can start growing your wealth.
1. Track your expenses
We’ve written about the importance of tracking your expenses and how to start. Before you start getting out of debt, you should first know exactly where all your money is going.
Are you spending too much on boba teas, your car installment or new shoes? Finding out moves you one step further to eliminating debt.
2. Adapt to a low-cost lifestyle
Now that you know where your money is going, it’s time for the hardest part: sacrificing luxuries and some level of comfort.
Getting out of debt can be done quickly if you cut out on all the things you don’t need as soon as possible. The key is to have as much disposable income to start paying off your debts and loans.
Here are things you can do to significantly cut down on expenses:
Start a cheap diet
From making your own meals to going vegan, there are many ways to cut your food expenses by half.
The average Malaysian in KL spends around RM200 on meals a week. That’s up to RM800 a month! This means you can save up to RM400 a month just by changing your diet.
Limit entertainment costs
Visiting local museums, exploring different hiking trails, and swimming are all fun, free activities.
The key is to stop or limit things you don’t need, so you can save to clear your debt. For example, skipping 5 movies a month saves you around RM60.
- Save up to RM120 a month when you cancel your mobile data plans (depending on your provider)
- Save up to RM180 a year when you cancel your Spotify
- Save up to RM204 a year when you cancel Netflix
- Save up to RM2,400 a year when you cancel your gym/club memberships
3. Renegotiate your payment plan
Having difficulty paying off your PTPN or student loan?
Visit your loan branches to discuss extending your payment period by lowering your minimum monthly payment. This gives you more time to pay your loan at a lower monthly commitment.
With credit card bills, many banks and institutions offer consultation and advice on debt management. Visit your local branch and discuss your current financial situation.
Some banks may negotiate several repayment options such as:
- Turning your debt into term loans with lower interest charges
- Offering lower interests on your cards
- Balance Transfer Program (transfer all your debit to one card with low to zero interest rates).
4. Sell your stuff online
If you can do without some of your stuff, you can sell your things online. Consider selling your phones, cameras, electronics, books, clothes, or furniture. If you want to settle your debt even quicker, consider selling your car, heirlooms and jewellery.
Where to sell your stuff?
5. Get a part-time job
Whether it’s selling baked goodies or freelancing from home, getting additional income is a smart and quick way to pay off your debts.
Some possible side jobs in Malaysia include:
- Being a GrabCar driver
- Starting a blog (lifestyle, fashion, finance, movies, etc)
- Freelance work (writing, video editing, graphic designing, etc)
- Putting ads on your car (mybump, moola)
6. Start paying off your biggest debt first
High interest rates hurt you in the long run. The longer you leave debt hanging, the more you end up owing banks.
Once you’ve minimized your spending, renegotiated your payment plan and found extra cash, start paying off your cards, starting with the biggest debt before moving on to your smaller debts.
Conclusion: Take control of your finances and start growing your wealth
Debt is not a shameful situation to be in. Everyone has difficulty managing their finances at least once or twice in their lives. Once you have taken the right steps to stabilize your finances, you’re one step closer to growing your wealth and achieving financial success.
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You May Also Like:
- AKPK Debt Management Programme
- 5 Tips to Clear Multiple Credit Card Debt
- Understanding Bankruptcy in Malaysia
- How to Handle Calls from a Debt Collector
- 4 Steps for Handling Financial Peer Pressure
What other steps have you taken or considered towards starting a debt-free life? Let us know in the comments.