TOO many of us are mired in loans. Our addiction to layering on liabilities often starts in early adulthood and then faithfully accompanies us to the grave. Here’s an important question for all of us to mull over: Must we accept being weighed down by the heavy chains of debt all our adult lives or is there a practical, realistic way to free ourselves from the burdens of miscellaneous personal lines of credit, hire purchase contracts, “family and friend” borrowings, unpaid credit card balances, car loans and mortgages?

Bottomline: Why are so many of us buried under consumer debt?

Here’s what I think:

We the people — the uninformed consumers of mass market credit — have been lured to elevate our lifestyles, sometimes beyond our wildest dreams in the short- and medium-term, by tapping into readily-available credit to buy nice stuff, fancy meals, and great services; all of which are acceptable IF we know how to use our respective lines of credit wisely.

Sadly, most of us don’t! We do not know how to use credit responsibly. After all, no one taught us this crucial subject in school. (Hopefully, with the now improved leadership at our Ministry of Education, this essential subject will be taught to all future generations of Malaysians.)

For us, however, too many of our peers use credit stupidly; and when I look back upon my more than five and a half decades of life, thus far, I’m inclined to think I am the stupidest of the lot. Be that as it may, the reason so many of us don’t wake up to how badly we are mismanaging credit is that on our perceived “cruise-through-life” we find ourselves surrounded by fellow credit addicts on a ship that we learn, far too late — when it is in deep waters, out of sight from land — is an overladen (creaky and leaky!) ocean liner.

In my opinion, the crux of our society’s credit problem is that we’ve allowed the ceaseless siren calls of advertisers and lenders to lull us into a false sense of economic health. Our initial thoughts often go something like this: “If clever, well-paid, generous bankers are willing to lend me more and more money, they must think I’m in great shape. Therefore, I must be financially strong. Good for me!”

Sadly, that is often not the case. But for those who manage their money superbly, kudos. Well done! If that’s you, you might wish to stop reading; but I hope you don’t!


Instead, you might choose to continue ploughing through my column to help someone you care about who is currently in denial about how bad his or her finances are. What’s more likely, though, dear reader, is that after honestly assessing your finances, you’ll wake up to the need for help in the areas of budgeting, cash flow management, debt repayment and financial rehabilitation. If so, do read on…

1.If your debt situation is so bad it is about to implode, contact AKPK or Agensi Kaunseling dan Pengurusan Kredit immediately and ask to speak to a debt counsellor. Its helpline number is 03-2616-7766.

2.If you aren’t quite in such horrendous financial shape and simply wish to learn more about financial planning, read my past New Sunday Times columns; and focus on those that most closely relate to your circumstances:

3.If you’re 100 per cent serious about making a fresh start at better managing your personal finances in 2020, you'll be interested in this intriguing piece of American business history...

In his best-selling book The Total MONEY Makeover: author Dave Ramsey writes:

“Henry Ford thought debt was a lazy man’s method to purchase items, and his philosophy was so ingrained in Ford Motor Company that Ford” — the company, not its famous founder — “didn’t offer financing until 10 years after General Motors did. Now, of course, Ford Motor Credit is one of the most profitable of Ford Motor’s operations. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt.”

You might want to mull over that. Also, if you want to start dealing with your debt problems, here’s what you should do:

1.Work harder, smarter and more to increase your monthly active income;

2.Sell some stuff you own but that you no longer want or use so as to raise some “dry powder” to attack your portfolio of debt;

3.Decide if you wish to attack those loans using the “highest to lowest interest rate” (mathematically most efficient) strategy OR the “smallest to largest outstanding balance” (psychologically most effective) strategy;

4.For regular non-ah long or loan shark loans, I recommend using the “smallest to largest” strategy; therefore, please list ALL your loans in a notebook or Excel spreadsheet;

5.Then, for each such liability, write its description, the amount you still owe, its APR, your monthly payment due date, and your minimum monthly repayment;

6.Between today and next week, DON’T borrow ANY fresh money from anywhere... if possible; and

7.Finally, return here on February 2. I’ll show you how to exterminate your debts from smallest to biggest.

Till then, please exuberantly daydream about how much happier and “lighter” you will feel when you no longer owe anyone anything.

© 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.