25 Mar 2020
My dad is also making a loss as a taxi driver from rent, he is in retirement age with zero savings.
I almost never spend money on non-essentials and I spend less than $3 on meals to save money, yet my family is still struggling. How do I help my family live more comfortably and reduce our debt?
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25 Mar 2020
Life Alchemist at School of Hard Knocks
There's not too much info, so I would rather prompt you to probe in these directions
1) why is your dad driving taxi a loss? A few directions to look at - a) he is not making profitable trips, b) he is driving around looking for business where there is none, c) there are earnings but its not enough for him to eat or pay bills, d) the earnings are going somewhere (eg gambling, women, loan to friends).
each of these has a different answer, but you need to talk to him and find the root cause. While working at an old age is a good way to keep him active (and avoid things like dementia), doing it at a loss does not make sense. There may be things he is not telling you, the worst possible is gambling, women, drugs, or alcohol. If it is just not enough profitable trips, you might want to help him explore how to identify and make profitable ones.
2) what types of debt does your family have? Where does it come from? The killer type of debt is loan shark and consumer loans, including credit cards. Credit card interest on unpaid amounts can be 2% monthly or more. Ask them for the statements, the total amount owed, work out what is the highest interest bearing debt. Work on clearing that off to the max of your ability. Interest can kill folks and make things unprofitable
how to identify effective monthly interest charges - look for the interest charge amount on the statement, add any fees including late payment fees, admin charge, fx charges etc. Divide (interest + fees) / debt owed = effective interest rate. I will not be surprised if the effective interest is more than 5% monthly, you will have to work out what is the key driver and tackle that. If the effective interest rate is as high as I say, you will need to approach debt counsellors or feel free to reach out further.
2nd part of tackling debt - calculate the amount of debt owed / parents' income. If this is 6 mths or less, you can tackle this pretty easily (within 3 years). If it is 12 months or more, you got a big problem. If it is 18 months or more, you may need to consider asking them to file for bankruptcy to make the problem more manageable.
I will wait for your comment / reply. You seem like you may need real financial advice to tackle debt.
Ernest Yeam Wee Leong
24 Mar 2020
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You might want to reach out to Family Service Centre in your area to see how they can help or see if you're able to leverage on their network to another organisation that could help.
CDC has a tie-up with Maybank on a financial literacy workshop to teach about financial knowledge and money management skills. It's offered to low-income families referred by Family Service Centre and 4 other partners.
I'd think means testing is required. You may want to consider to see the Family Service Centre can offer any insights.