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ISN'T it wonderful how our financial framework allows us to enjoy things we can’t yet afford? On second thought though, maybe that’s not so great. Our world’s economic system hinges on the expansion of consumer credit. This has made the providers of our credit, namely banks and credit card companies, immensely wealthy. We readily understand this side of the business equation.

The flipside, though, is less savoury. You see, when we misuse credit, we impoverish ourselves tomorrow even as we enrich financial companies and their shareholders today. (That, by the way, is why all of us should learn to save and invest wisely — my subject for a different time.)

Our focus here is the toll too many regular repayments take on our often too modest monthly cash inflows. My decades spent observing consumer behaviour — in my life, as well as those of friends, family members, clients, live audiences, viewers, listeners and readers — have convinced me that most of us start out as careful (or at least tentative) borrowers.

Our obliviousness stems from our capacity for losing track of our mounting liabilities because we forget to tally the total amount we’ve borrowed and, instead, unwisely only focus on each relatively small monthly payment.

You see, those tiny payments have a way of stacking up, sticking together and morphing into a granite mountain that looms between us and our cherished dreams. Those aspirations include gaining long-term financial strength, achieving our funding goals for our families and ourselves, and attaining financial freedom down the road.


A long time ago, well before the advent of widespread consumer credit, when our farming ancestors said they could afford a cart to transport their vegetables and handmade wares to the market, that meant they had saved up ALL the money needed to buy the cart outright. Today, when we buy our version of that cart, called a car, to take us to our workplace, we determine affordability by a different metric: Can we afford the monthly payments?

Let me assure you I’m not picking on you like some self-righteous “expert” who has never suffered sleepless nights because of debt-fuelled worries. I have messed up royally in the past... repeatedly. Thankfully along the way I have picked up a few liberating lessons.

Regular readers know I ended up in deep credit card problems twice in my life; first in the UK in the 1980s and again here in Malaysia during part of the 1990s. What I’m going to share with you now, though, pertains to my Malaysian car purchases, which have been carried out more intelligently than my previous credit card excesses.

Every car I’ve ever bought has been financed partly by a finance company (in the old days when we still had those) or by a bank. The tenures of my various car loans have been two, three or four years.

Thankfully, those relatively short durations are less damaging than the more common five- to nine-year car loans most Malaysian car buyers find themselves mired in for the fastest depreciating major asset most of us will ever buy.

Of course, given the sorry state of the public transportation system in many parts of Malaysia, a car (or at least a motorcycle for those with better balancing skills than I possess) is a huge boon to our professional and personal lives. Yet we each must ask ourselves if our vehicle’s primary purpose is REALLY transportation, safety or status.


It’s not for me to judge you if your honest answer is “status”. It’s your life and it’s your money. (Also, as I’m currently blessed to be driving a beautiful — albeit ageing six-plus-year-old — product of German precision engineering, I have no right to lecture you about your selected status symbols.)

But YOU should be 100 per cent honest, at least with yourself, about your spending choices, and whether they’re intentionally geared to make you look richer or more successful than you actually are, and what the long-term consequences of such decisions are on the person you will be and the life you will lead three or four decades from now.

If you’re sick and tired of feeling sick and tired about being broke (even if no one else knows it), then perhaps this January can be the month you don “honesty specs” and assess your finances (or, more accurately, your lack of finances).

The solution to that fiscal quandary lies in our capacity to make laser-focused changes in how we manage our money. In The Total MONEY Makeover, author Dave Ramsey writes:

“Focused intensity, life-or-death intensity, is required for you to reset your money-spending patterns, and one of your biggest obstacles is DENIAL.”

Are you in denial? If you’re unsure, Ramsey’s follow-on observation may prove helpful: “The sad thing is that you can be financially mediocre..., financially flabby, and still be average.”

Of course, if you wish to be much better than average, a lot can, and must done. Therefore, I’ll focus on practical debt eradication steps next week. Till then, though, humour me and make a list of all your present liabilities. Then promise the person in the mirror you will NOT add on any more debt on frivolous impulse purchases this week.

Can you be good for seven days?

© 2020 Rajen Devadason

Rajen Devadason, CFP, is a Licensed Financial Planner, professional speaker and author. Read his free articles at; he may be connected with on LinkedIn at, or via [email protected] You may follow him on Twitter @RajenDevadason.

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