QUESNEY21(Day 12): Personal Finance Series #1: Living Without Debt

in #money6 years ago (edited)

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Last year Hubby and I decided to learn a little more about financial principals from the Bible through the Institute of Basic Life Principals. Their Financial Freedom series was indeed a huge eye-opener. It was a series of 20 lectures exploring all the different aspects of finances related to personal, family and even business. One of the lectures particularly touched on debt and it kind of hit a sensitive nerve in me. I remember when I started my first job many years ago and I got my first credit card...Citibank was then giving out credit cards practically to everyone and anyone who applied and you could get free movie tickets every month! It was exciting! A whole new world of what I could buy suddenly opened up. I didn't need to worry whether I had the cash or not, I could just use my credit card!

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A long spiral of debt!

To cut the long story short it was a story spanning nearly 12 years of constantly being in credit card debts. It is really easy to rack up the bill I tell you. A little swipe here and there and the next thing you know, you owe the bank quite a thousand Ringgit. Fast forward to 2014 when we had our first child, it was then that I told myself enough is enough! I have said this a couple of times before, and I am saying it again, having children really changes you for the better. I was finally fed up of paying the endless interest that came every month with the credit card bill as I was only paying my bill partially and yet I continued to spend. You see I was paying more than the minimum payment but not quite the full payment that was owing. The straw that broke the camel's back came when I decided to study one of my lesser used credit card statements a little more in detail. To my horror, I realised the following:-

  1. My outstanding bill at that time was about RM500 plus. This was a credit card issued by AEON Credit
  2. I had made a payment of about RM400 plus as I didn't really check the bill properly. The remaining unpaid amount was less than 1 Ringgit
  3. The finance charge, however, was a few Ringgit!

It was then that I swore I was going to do two things which were to clear all my outstanding credit card debts and moving forward pay my credit cards in full every month! I did a couple of things immediately, I took up as many interest-free balance transfers that I could get my hands on and basically stopped spending money on stuff that didn't matter! (I will elaborate more about this in my future posts) I paid all the monthly instalments faithfully and by 3rd quarter of 2015 I was credit card debt free! Just then I also started an experiment to document my expenditure every month and to go on a clothes buying ban! You can read about ithere the results of this experiment which I wrote about earlier last year in my personal blog before coming on Steemit.

I believe that we cannot be truly financially independent whilst we are still in debt. For me, this includes all the debt that is considered "normal" for everyone to have, like a car loan and a housing loan. A friend who owed RM 40,000 for a failed business venture recently shared with me the horrible stress that she goes through every month when the repayment becomes due. The anxiety and fear of not being able to make the next payment, the unhappiness and distraction...I have also heard about marriages and families being torn apart because of debts.

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Image source from Unspash

Borrowing is like heading for financial death!

Borrowing creates a relationship of servitude to a creditor, be it the credit card company, finance company or bank. Even if you owe your friend some money and was unable to pay it back in a timely manner, your relationship then becomes strained. Your friend may still be kind and not pressure you to pay back but wouldn't you feel a little ashamed and indebted to them?

I have also come to understand that borrowing does one more thing to us...it literally brainwashes us to think that t it is ok to live beyond our means and then traps us into being slaves working to pay back the debt. Borrowing is really presuming on our future ability to earn back the money that we borrow! What is something happens to us and that ability is taken away? Lastly, debt really robs you of even a good sleep at night. So the bottom line is we want to make living without debt a reality because we believe that it is a start towards true financial independence.

Our Plan

  1. To accumulate enough cash equal to our loans in 1000 days to be set aside! We will be collating all the outstanding debts that we have and work out how we can do that.
  2. Stop incurring any new debt immediately
  3. Invest to make better returns (I will be also be doing more postings about how and what we invest in)
  4. Live more simple and prudent lives - ie. spend less
  5. Save 30% of our income (at least whilst the kids are still young. I am guessing they are going to cost a lot more when they are older!)

So far, I have been credit card debt free since 2016, meaning I pay off my credit bills in full every month and I am so looking forward to paying off the final payment for my car loan this month! (One post on that coming up too!)

Please do share your thoughts on the following:
1. What do you think about debt?
2.Do you think having some debt is ok?

I would love to hear from you especially if you have managed to reduce or live debt free!


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So what is QUESNEY21? @joannewong and I are challenging each other to create great content for the next 21 days. Starting 26th of March and ending on the 15th of April. We needed the discipline and motivation that comes from being accountable to each other. Tell us if this is interesting to you, do you think you could benefit from your own QUESNEY 21?

Check out the other postings for this challenge:
QUESNEY21 (Day11): Persistence & Perseverance
QUESNEY21(Day 10): Review #1: Weaning Tots - Kid Friendly Restaurant
QUESNEY21 (Day9): 100 Degrees Steemit Introduction Session - 3rd April at Talentbank

Do check out @joannewong postings too for this challenge!

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Yeiey! Cheers to a debt-free life.

Yay! Definitely! I am so going to make it happen!

I hope you succeed with your plan, there's nothing worse for your mental health than having debt imo. It does sound totally doable!

Hi @daan, yes I do believe that too! I am going to get rid of debt sooner rather than later. What about you? Did you have a similar experience too?

Wow, girl! You went through many things with that debt, but the important thig is that you leatn how to solve that problem, and didn't sit there crying waiting for a miracle. I belive everyone goes through similar situations with debts, it's the only way to learn the value of the money and how to spend it. I'm really young but believe me, I try to mesure what I spend everyday! Great post, greetings!

Hey @gellyarenas, thanks for your encouragement. I am really amazed that you have been measuring what you spend. I wish that I had done it earlier but I guess better late than never!

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I did not learn much about money management till I was age 30 and as a result have accumulated a lot of unnecessary debt along the way.

Without educating yourself, debt is silent killer that can go unnoticed and does not scream at you during financially better days. But dogs you mercilessly during times of reversed fortunes.

I hope you never find yourself in that position. Do yourself a kindness and get educated about money and debt. It is a simple thing that can make all the difference in your life.

Hi @buzz.lightyear thanks for your comment. You are right, during bad times it can be really bad. Yes, I decided to become a little more concerned about my financial standings indeed. Did you manage to get out of debt? Do share!

most times it depends on the situation.... in some business ventures... others peoples money seems cheaper than using yours.
The issue arises when you have a bad payment habit.

@klynic thanks for your comment. For me I feel that debt is a mindset? Not just a payment habit? The buying of stuff that you don't really need, the "security"of spending even if you don't have cash to back it up...etc.

Debts are quite beneficial considering the amount of leverage they bring to your life. However, these debts must have low interest rates and flexible repayment terms.

95% of the business that I have seem boom from trash to millions have done so by leveraging their market edge using debts.

Thanks for dropping by my post @doktarufas! I can imagine, I guess there is a place for debt but I guess it is just not for me. Not at this point anyway.

I'm embarrassed to say I didn't know what a Ringgit was! So first I got to learn that :). I completely agree with you that debt is a terrible stress and we must all learn to live within our means. There was certainly a time when I too lived under the burden of debt. I can totally agree with you that life is far less stressful and worrisome when that cloud haning over your head is gone.

Now I only wish our countries would also follow your advice and live within theirs. The national debt in the U.S. is staggering and unsustainable - and yet we keep spending. I think I'll send them to get a lesson from you!

Hi @tamala! Hahaha! No worries, a Ringgit is the Malaysian currency, just like the USD. The abbreviation is MYR. Similar to 1 US dollar. Wow, how did you manage to get out of debt? Do share I would love to hear your story. Hahaha, I think every other country is doing that now...this overspending thing and national debt.

Well, I got lucky with a windfall situation which made it possible to clear my debt. Sometimes the universe just steps in and helps. Of course, when that does happen you have to use the windfall to get yourself out of debt and then change your habits to remain debt free.

I think some debt is okay and needed for your credit standing but a strict repayment schedule is necessary. It's scary isn't it?

Hi @artemisnorth, that is true too. No credit history would not be good either. But I guess, it is really the mindset when it comes to debt that I sharing about. Thank God, that I have always been ok financially even with debt but it came to a point that I just got tired to repaying stuff apart from the general bills.

This is a great post! The snowball method is a huge deal and it totally works. One of the first posts I ever wrote on Steemit was how my wife and I were able to get ourselves out of $20k US of debt when we were first together. Using low-interest balance transfer loans and the snowball method we were debt free within five years. Thanks for sharing your story!

Hi @bozz wow! I really got to check out your post! Would love to read about it. I am so thankful that during that time, 0% interest-free balance transfer was available! Would you be able to drop the link here for me?

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