Asked on 12 Jun 2018
Look at what you are buying. Can they be ”scrapped” away or leased/rented to others?
Relook at what you bought and why did you buy them? Is it the environment? Is it the persuasiveness of the salesperson? Is it because you can’t reject a friend? Could you have chosen installment payments as they are 0% installment plans?
Are these valid reasons or excuses? If reason, it is debateable. If it is excuses, how to do you avoid them?
Lastly, I can’t remember who said this,but it goes something like this.
If you can’t buy it twice, you most likely can’t afford it.
First, stop anymore purchasing on instalment.
Finish off all instalments. Then start saving up for your next purchase.
Having too many instalments affects your credit score and your credit card limit too. It might affect you if you are buying house or car next time.
Downgrade to 'frugal' for 1 year and see, whether You're missing something.
Surely currently not sustainable expenses, change possible, however.
good luck !
Since you can't change your monthly instalment and repayment, the only way is to get a side job or decrease your expenses. Look at your monthly expenses and reduce any thing that you do not need.
I do not encourage to pay by monthly instalments simply because one pays more due to the interest incurred. It is more prudent to buy only what you can afford.
Clear off your instalments as soon as possible to prevent any interest payable from accumulating. Stop purchasing items through instalments for the time being until you have cleared off your existing instalments. Once done, you can start saving maybe 10-20% of your monthly salary first before purchasing items, try to pay in full rather than instalments
Clear it off asap. Never buy things on installment especially from courts etc. You're paying way more of the original price.
I am in this predicament as well.. Forced myself to list down the items on installments, plus a breakdown of my expenses into excel. And I'll look / update this spreadsheet come payday as a hard reminder of where money goes.. Motivation to countdown the months left before the installments finish so that I can channel the funds towards savings and investments.
Make a list of all item under installment.
list down the purchase price, monthly installments and outstanding.
Rate each item if is a mandatory must have that cannot do without and other items as optional good to have. Got to be very honest about it.
For all the optional good to have, negotiate and see if possible to sell back to merchants or try to sell in open market like Gumtree , carousell or fb marketplace.
Once you offload some , use it to quickly repay the mandatory items installment.
Meanwhile , do a listing of total Monthly income and expenditure. This will help you to see where you $ goes. Do the same as above to rate each item mandatory must pay and optional such as enjoyment. Look for any opportunities to reduce and can also ask the expert here on how to reduce the cost even on some mandatory items such as Telco bills.
Doing both above will reduce your leak and expenses and then apply the 50/30/20 by Seedly:
Remember , always pay YOUSELF FIRST(Savings). If savings is the last you pay, will definitely have no savings. Priorites and order must get it right first!
Hope you get out of debts soon! Try ! Cheers!
Stop any further purchases please
relook into current expenses and cut anything excessive
after you have paid off everything rebudget everything
If there is interest on the installment, you should definitely start focusing on repaying them as soon as possible before thinking about savings as the interest rate should be higher than what you get from the bank.
As you have recognised, you should not be having a high monthly installment bills as it will eat into your savings (which means lesser for investing). Like what the other answerers have mentiond, you should try to cut down the number of bills if possible!
Since you have already pointed out this, meaning that you are concern that there is no monthly saving. It is a good start.
The next thing to do is to "sell away" this thing if it is not essential, for example facial package, gym membership, spa package etc.
Simple is good and less financial stress.
It is the habit we need to instill in our mind that impulse purchase should be controlled and even if we did, need to think of solution to salvage the damage. We must learn to let go in my opinion.
Save now, invest later and use the passive income for the things you desire.
Looks like you have committed to more big ticket purchases that exceeded your available Monthly Income.
Do need to sort out the Wants and Needs List for future purchases.
Need to reassess your daily needs to see what are your monthly shortfall.
Do note that...
Banks charge a penalty for early repayment of 0% Interest Instalment Payment Plans through Administration charges.
Several 0% Interest Instalment Payment Plans come with an “administration fee” that’s a percentage of your purchase. This usually happens when the banks don’t have an existing agreement with the merchant.
If it’s insurance - hold it until it ends since canceling is a waste
if it’s loans - refinance
if it’s expenses - live your life differently, cut down costs, from food to all kinds of bills. Take austerity measures for a while to see the difference.
Find alternative income, freelance or shared economy - do anything that gets you the extra cash you need.
At this point, what you can do is pay it off til the end of the installment period or sell it off and use the proceeds to pay it off.
Going forward, best to check that whatever you are purchasing using installment is something you really need and that you already have the cash on hand to pay for it outright. Installment is just meant to help you smooth out your expenses over a period of time or use the cash for other investments, and not to let you buy things you really can't afford.
Bottomline - live within or below your means.