I came across this interesting article “Generation Debt” on TheSundayTimes today.
It says that according to survey, age of 20-something have the highest rate of loan default in Singapore, with those who are married the worst of the lot.
As a 28 year old, I have seen a lot of my friends belonging to this generation.
I used to be in this category, but i manage to pull myself out of it by clearing my debts as fast as possible. It sucks and sucks even more. But its worth the effort and determination.
Living like a hermit during the debt-clearing time, I cut down as much as possible on the expenses and output as much as possible of my pay to repay the debt.
Made use of 0% fund transfer from banks (they charged a fee of 1.5% to 2% though) and borrowing from a few close friends (thanks buddies, saved me a lot in interest rates and bank fees) to tide me over the dark period.
No entertainment, no merry making, no eating out, no life.
Thats my determination!
Time passed and I am glad that I have saved enough to prepare for my customary wedding and buying a house and going on a honeymoon.
*Tip* It helps to have a wife who is a saver!
These young adults buy things based on wants and not needs.
They change handphones every other month when new models are released, buying every gadgets from Apple such as iphone and ipads. Often spending more than they can afford to.
It is important to know where your money goes to, this can be done by tracking every expenses for a month or two which then you can work out a budget based on your spending habit.
Start financial planning as early as possible, learn ways to invest the savings to make higher returns.
Make money work hard, not work hard for money!