How I got out of debt (Part 2)

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.


8 thoughts on “How I got out of debt (Part 2)

  1. Hi Jasmine,

    Thanks, Part 2 was an interesting read!

    Let me be the first to tell you that getting married itself already necessitate a change in lifestyle – you are moving out to a place of your own and will be “forced” to manage your finances without any parental guidance (or interference!). So things like budgeting and financial planning become even more important once you have your own apartment; in addition to managing the mortgage, paying your bills (on time) and savings and investing. It’s great that you are having an early start on this with your guy even before marriage! Thumbs up to that!

    For my family, restaurant dining will be a once-a-week affair, though sometimes it may be on Sat and Sunday. On weekdays I normally lunch at coffee shops though sometimes salads or sandwiches can cost quite a bit (Raffles Place is generally NOT cheap). I’ve learnt that some places give better value of money – it’s not how expensive it is but how good the food is relative to what you are paying. And oh yes, always bring your own water or order water – beverages are a serious profit generator for most F&B outlets and I don’t give them the pleasure of charging me!

    For me, I use cabs minimally (probably once in 3-6 months) and commute mainly through cycling, bus and MRT. They are used for emergencies, rainy days and if my girl is very tired or grumpy!

    In terms of setting priorities, I think it is important to be able to set a savings goal for you and your future hubby. In that way you can work towards a target and keep track along the way. The same also goes for investing – try to ensure you achieve a decent return on your investments without losing any big money. I would of course recommend value investing but it also depends on your temperament and passion (for numbers and financial statements).

    You’d be surprised to hear I have friends in banking who (still) tell me about the excesses there, and the comparing and preening about luxury labels and “who has what”. Apparently, the culture is still alive and well in financial institutions and it strikes me as being shallow and materialistic. Your new colleagues sound like a more grounded bunch who are probably more mature in their thinking and know what is important in life. That’s a very good change I think as we do tend to get influenced by our surroundings (sub-consciously). This is also why I live in an HDB – at least you don’t see people spending like crazy on stuff and cars and feel a need to keep up with the Lims and Tans.

    Have a good 2014 ahead and wishing you a Happy wedding!

    • Hi Musicwhiz,

      Thanks for dropping by once again. It’s always nice to hear from you and to read your comments, and I’m still hoping you can start blogging again!

      My new job and colleagues sure keep me grounded and I really enjoy saving money now. I’m even surprised at myself for not buying any designer bags for more than a year now.

      As for value investing, our friend Kyith did share with me some books and articles but it still remain too dry for me. I’ve been trading and generated a return of about 23% in 6 months. I would prefer to invest for long term instead of doing short term trading though. For now, I’ll stick to buying ETFs, blue chips and maybe some REITs for my risk appetite. I’ll also prefer to hold cash and to solidify my emergency funds, and also to work on earning a higher income.

      I have recently posted some photos from my wedding. Do drop by to look at them!


  2. how do you usually prevent an elephant from being startled when you are riding it? by not bringing it to an environment where there are many shocks.

    similarily, your tone down colleagues will have a profound effect on a person’s ability to wean off excesses

  3. Hi Jasmine,

    First of all, happy new year to you! 🙂

    Just to tell you how much I enjoyed reading your part 1 and 2 on how you managed to achieve debt-free status.

    I guess for a start, a good job that pays well is important as it will be the main source of your income. This will follow by prudent saving and constant investing to generate a stream of passive income.

    I am also planning for my marriage with my fiancé. With the same approach as what you have mentioned, we decided to only pick the kind of package that we could afford. We went through a few rounds of discussion and serious consideration, hence I must say communication between couple is very important to calibrate each other to have the same level of expectation.

    Happy planning!

    • Hi Spectraoflife,

      Thanks for your kind words and encouragement 🙂

      Although I’m an advocate for saving money, I do feel that there’s only so much expenses we can cut. It’s best if we can work on both ends. Maximize earnings and minimizing expenses (without compromising on the quality of life of cos).

      By the way, when is your big day? Congratulations to you! Lots of planning has to be done. I’ll be sharing my wedding budget soon!


      • Hi Jasmine,

        Most likely will be in the late 2015 or early 2016. 🙂
        But planning has to start now! haha. Been reading and visiting various forums to learn from seniors and I am already overwhelmed by the amount of information and intense effort required. Nonetheless, though is tough but we are enjoying the process.

        I will be looking forward to your sharing on your wedding budget too!


      • Hi again! Your wedding is in late 2015 or early 2016 and you’re planning already, that’s fast! I guess the very first thing you have to do with your fiancée is to determine the budget for your wedding.

        Happy planning and I look forward to hearing about yours 🙂

      • Yup. We have to start early. We don’t like to cramp things together, furthermore our BTO will ready next year too. Lots of planning and budgeting to do! haha faintz

        Yes, I will definitely share my experience in time to come. 🙂

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