IT was reported that more than 290,000 people have become bankrupt since August, with Selangor having the highest number.
The statistics are alarming considering the efforts of banks and the government to educate people on managing their finances.
A report last year said an average 11 youths were declared bankrupt every day.
It was reported in 2012 that an average of 53 people become bankrupt every day.
Banks set up booths in shopping complexes and malls to entice customers to take up their offers of gifts and discounts when they sign up for their credit cards.
Many young people have more than one credit card and many spend lavishly.
Bankrupts are not allowed to travel abroad nor own property or a bank account unless it is for crediting their salary.
They are not allowed to own businesses unless permission is obtained from the authorities.
One of the ways the government can prevent more people from becoming bankrupt is to educate students on financial planning when they are in university.
Many young graduates think that having many credit cards is an indicator of success, not knowing that these cards can be a trap.
Once these cards are misused, they can inflict financial disaster.
The government has set up the Credit Counselling and Debt Management Agency and Insolvency Department to offer its expertise and programmes to prepare young people for the challenges they will encounter when they enter the job market.
This department ought to be at the forefront of educating youth.
We have heard that “it is better to have money in your pocket driving an old car than driving a big car but with no money in your pocket”.
Maintain a high degree of discipline and accountability in your spending habit and never allow sales to attract you.
Buy what you need, not what you want.
Value every ringgit as it is hard earned and to spend it is so easy.
To the young and the mature, limit yourselves to one credit card.
Cultivate the habit of long-term savings as soon as you start working.
Seek the advice of financial planners and bank experts who can provide advice on saving.
To bankrupts, you can get out of your financial mess and start afresh once that nightmare is over. Be careful in your spending. Do not return to your old ways.
DR TAN ENG BEE