Almost Twenty Credit Card/Line Accounts

I am in my 40s and holding a management position drawing more than $10,000 a month presently.  To some, I would probably be considered a high-income earner.  However, I had to overcome many hurdles before reaching where I am today. My journey, initially burdened by debt, began almost 10 years ago.

In the early 2000s, my family was facing a very difficult time financially. Our financial predicament was a result of my mismanagement of the close to 20 credit cards and line accounts that I had applied for over the years.

I owed money to almost all the consumer banks in town. The same banks that had for many years granted me their credit facilities and treated me like a VIP, suddenly referred my accounts to their Collections Department and listed my accounts as bad debt. I constantly received collection calls and letters; it was overwhelming and needless to say, caused much stress.

I felt cornered by the debt collection efforts of the many creditors, and decided to engage a private debt-consulting firm to negotiate with the banks on my behalf. I paid a few thousand dollars to the debt-consulting firm for the service rendered.

Unfortunately, the debt consulting firm’s service was ineffective. By then, the amount of my unsecured debt had grown to more than $150,000.

Acknowledging the Problem is the First Step to Debt Recovery

In desperation, I approached The Association of Banks in Singapore for help, and they in turn directed me to Credit Counselling Singapore (CCS) for assistance. After analysing my financial situation, a CCS counselor worked with me to draw up a family budget plan that allowed me to put food on the table and simultaneously offer a reasonable debt repayment plan to my creditor banks.

My Family, My Support

My family members were very supportive, and they cooperated to help contain expenses so as to enable me to free up a greater portion of our income to be channeled towards my debt repayment.  I am grateful that my family members were fit and in good health during those tough times.

Having seen my predicament, my teenage son, had learned to save up part of his pocket money. For me, it is a big consolation to see that he has cultivated the good habit of saving. I have noticed that he is able to spend within his allowance, and has never requested for anything other than necessities from me. I am confident that my son will be financially healthier than I was at his age as he has cultivated the good habit of spending within one’s means.

Pain of a Father

Like all fathers, I wanted to offer the best to my only son when he was pursuing his pre-university education in Junior College. However, due to my huge debt, almost three quarters of my monthly income was used to repay the debts of my (approximately) 20 credit card and line accounts.

I could not afford to hire a tutor even though I knew that my son would have benefited from extra lessons and guidance. My son, ever understanding, did not even request for it. I guess he was sensitive to my financial troubles and tried to relieve the family from having to spend its scarce resources, even if it was to support his academic efforts.

Remember the Lesson Learnt

I had learnt from my dealings with CCS that a budget plan is a useful tool for every individual and family.  It serves as a tool to spend within our means. It is an important skill for every father to acquire and to impart to his children. It is simply too risky to leave this skill to develop by chance, or worse, through circumstances such as what we experienced.

My debt repayment arrangement ended about a year ago, after almost 10 years of struggles. And even now, though debt-free, my family still uses the family budget plan that I first learnt from CCS. I believe that drawing up and keeping to the budget is a good financial habit to be cultivated. Over these years, there are two important points that have been embossed in my mind:

1. Live within your means

2. Find ways to increase income and reduce expenses to tackle a debt problem

My Debt Repayment Strategies

During my debt repayment years, I took up a part time job during weekends to supplement the family income.  But I also reckoned that upgrading myself was the only way to improve my earning capacity in the long term. A higher education qualification enabled me to assume a senior management position, which in turn helped to increase my income, and ease cash-flow strains.

With focus, discipline and support of my family, I managed to obtain my Bachelor's degree in 2005 and attained my Masters degree in 2007.  After having achieved a higher education qualification, I was promoted to a senior management position. With the increased income, I also managed to clear my debts sooner than expected.

CCS is well recognised by the banks. Given my experience, my advice is if you are having problems with credit card debts, talk to CCS first before your situation becomes worse. With their guidance and your determination, you will be able to resolve your debt problem and achieve your financial freedom one day.

Thankful Relief

Much to my relief, my son managed to pass his ‘A’ levels and gained entry to study at the Singapore Institute of Management.  He has just started on his first year in university. I am proud of him, although I have mixed feelings of pride and guilt. He probably could have achieved better results if I had been able to support him with hiring a good tutor to help him reach his potential academically.

With the support from my family, I caught sight of the light at the end of the tunnel, and achieved a debt-free life! I am glad that I chose to approach CCS despite my bad experience with the private debt-consulting firm.

About the Author: The author of this interview is a father of a 19 year-old son who is currently serving NS. He had worked in the financial industry since 1989 and recently joined a VWO to do financial education work. His advice to fathers is that it is never too late to start financial planning for the family.

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