I’ve previously posted the first part on how I got out of debt here. Being in debt for years was really painful. I had totally ignored my debt situation and make no efforts to get out of it. However deep down, as much as I tried to ignore it, I know a certain part of my life was pretty screwed up.
Getting a good bonus, working out a debt repayment plan, and sticking to a budget were the first few steps I took to get out of my debt situation. I have to ensure not to fall back into debt again, like how I did before.
1) Changing habits/lifestyles
– Quit shopping
I realized whenever I’m bored, I’ll go online hunting for things to buy. Be it dresses, bags, accessories, or even gadgets. Shopping keeps me occupied and happy for awhile, until I received my new loots, then I’ll get bored and hunt for something else again. The first step to implementing a change is to identify the problem. In my case, it was the lack of self control, and the need for instant gratification. I made it a point to stop online shopping and I avoided shopping malls too, until I’m comfortable enough to just look and not buy. I also stop visiting designer bags forums, and stopped looking at advertisements of luxury products.
– Stop eating at restaurants
I used to dine at places like Ding Tai Fung, Crystal Jade, Ichiban Sushi and Sushi Teh whenever I meet up with friends or my boyfriend for dinner, which is like almost every other day. I even spent over $20 for lunch during weekdays. Now I eat at food courts and coffee shops, and I have to say I enjoy such local treats too! I still dine at my favourite places, but it’s usually reserved for weekends. Now on normal weekdays, $10 is more than enough for both lunch and dinner. One tip here, stop ordering drinks when eating out, just order plain water. They are not only free but much healthier too! I completely stopped buying bubble teas and Starbucks coffee back to the office post lunch too. It’s usually the small amount that adds up.
– Stop taking taxi
Compared to spending a few hundred dollars on transport previously, I now only spent about less than $100 a month on public transport.
2) Goals setting and setting of priorities
I never knew what I want in life and was just drifting through and enjoying life as it is. I guess everyone went through that stage when they were younger. After getting my bonus, I really sat myself down and started thinking of what I want to achieve in life. I want financial freedom. I want to be debt free, to enjoy the small things in life, not be bound by material things, and to finance my lifestyle using passive income. It is then that I realised I need very little to make me happy. Good health, being surrounded by people I love, good food (not necessary expensive), and self development are what matters. All these does not cost me a lot of money.
Once I sorted out my priorities, decisions making became easy. I know clearly what I want, and what I do not want. I’m no longer tempted by designer stuffs and the “finer” things in life. I no longer have temptations to shop and buy thing. Even for my upcoming wedding, I planned and budgeted in such a way that even if we make losses for the banquet, it is still affordable for my fiancé and I. I don’t care if it’s not extravagant. What I want is an awesome marriage, not be debt ridden after all the glamour is over. And we all know the number one problem couples usually face is financial difficulties. I don’t want that to happen to my fiancé and I.
3) Change in environment
I would say the biggest catalyst in helping me get out of debt and turning my financial situation around is due to the fact that I changed my job. I made many good friends from my banking days, and they are still some of my closest friends. However, I’m not entirely agreeable on their spending habits (sorry folks!).
My current colleagues on the other hand, they aren’t the most exciting or fun loving people. They are in their late 30s to early 40s, but they sure know a thing or two about amassing wealth and they know the importance of being debt free. One repaid his HDB loan within two years, and one within seven. My Finance Manager fully repaid his 5 room BTO the day he moved in. They are frugal, yet generous people. Being in such an environment prompt me to save and work hard for my goal of attaining financial freedom.
So all in all, without my current job (for the bonuses and the good influences), I’ll probably still be in debt, and most likely carry debt into my marriage and into my 30s.