HOW TO MANAGE YOUR DEBTS

If you have sufficient funds set aside for your retirement, you can look forward to your golden years with some peace of mind. However, the majority of us are probably still struggling to pay off housing loans and car loans. There is also the credit card debt to settle each month. The adult children have their own financial commitments to deal with as well, so we can’t expect much monetary assistance from them. There’re also medical expenses to cover, and expensive health supplements to purchase. Meanwhile, we watch the price of our shares on the KLSE nosedive, and wonder how much longer we can keep our heads above water. Circumstances like these can drive the hapless and helpless to consider taking desperate measures like seeking out Ah Longs – or worse.

So where can one turn to for some professional financial counselling? Try Agensi Kaunseling Dan Pengurusan Kredit (AKPK). It is an agency set up in April 2006 by Bank Negara Malaysia to provide financial education, credit counselling and debt restructuring services to individuals. All services offered by AKPK are FREE. Now that’s what I call public service.

I checked out the website and came away quite pleasantly surprised at the services offered. You can even download for free the e-book "Money $ense - Getting Smart With Your Money" to acquire the skills to manage your money wisely.

According to AKPK, if the following list applies to you, you are in need of financial counselling.

If you are not in control of your money;
If you have more debts than you can manage;
If you are living from paycheck to paycheck;
If you are only able to pay the minimum 5% on your credit card bills;
If you are taking cash advances from your credit card to meet your expenses;
If you do not have any savings to meet personal or family emergencies;
If you have debt collectors calling you regularly;
If you are being served legal notice of demand.

Here are some tips from AKPK on how to manage your debts:

· Calculate your total debt to income ratio – if your repayment exceeds 30% of your gross income, then you might want to start clearing some of your liabilities.

· Split your debts into “good” and “bad” categories. “Good” debts are considered necessary investments or debts that create value like home mortgages, business loans and education loans. “Bad” debts or consumer debts are for credit purchases that decrease in value with no potential to increase like buying a plasma TV set.

· List your debts from the highest to the lowest interest rate charged. Set a realistic repayment structure and a time frame within which to pay off your bad debts, starting with those with the highest interest rate charged.

· Limit yourself to one or two credit cards. Settle your credit card bills on time and in full.

· Restructure your debts. Look around for the most competitive interest rates and loan packages.

· Set a monthly budget and stick to it

· Curb your spending habits. Turn over a new leaf to avoid getting into debt again.

There are many sources of funds other than your pension or EPF. Perhaps your life insurance would have now matured. Consider selling your big family home, especially if its value has doubled or trebled; since your children would have left home by now. You could comfortably live in a smaller home with lower maintenance and the surplus from the house sale is yours.

To find out more about the Debt Management Programme (DMP) before you register for it, just attend the daily briefing at the AKPK office in Kuala Lumpur, Penang or Johor Bharu. Call their toll-free number at 1-800 88 2575 for more information.

BETTER SAFE THAN SORRY

By LINDA LIM


HERE are some tips that I would like to share with my fellow seniors.

When you go to bed, make sure that you have a torch-light within reach. Better still, have it under your pillow. This is necessary because in the middle of the night when nature calls and there is a blackout, you can make your way safely to the toilet.

My friend’s mother became bedridden following an unfortunate incident. One night during a blackout, she headed for the toilet; she swore she knew the way by heart. However, she missed a step and fell down a flight of stairs. A sad price to pay for carelessness.


The other day, my neighbour showed me a bump on her head. She had gone to the toilet in the wee hours of the morning and was too lazy to turn on the light. When she went back to her bed, she thought it was there as she made to sit on it, but landed on the floor instead. For one week, she was in pain because of the fall. So make sure you have a torchlight under your pillow; it is better to be safe than sorry.

I am sure most seniors are pill-poppers. They take pills for high cholesterol, high blood pressure, diabetes and more. Then there are the numerous supplements like vitamin pills. To make sure that you take your pills diligently, set aside a day in the week and put your daily dosage of pills in pill boxes. You can easily buy these boxes that indicate the days of the week. So fill in your daily supplement for the week. These boxes come in handy wherever you may be, and you will not miss out on any of the pills.

The next thing seniors should do is to get a calendar. On it, write down important days to remember, like anniversaries, birthdays, appointments with the doctor, visits to the dentist, when to pay quit rent, insurance, etc. Place the calendar within reach so that you can be reminded of things that you need to do throughout the year. Being seniors, we can be forgetful, so this is one way to ensure that we remember these important dates.


All seniors should also keep a diary. We should note down things that we have done for the day, for example, paid quit rent, re-sprayed the car, had lunch with a buddy. This is just for reference.

When a friend of mine checked her phone bill, she found an outstanding charge to an unfamiliar number. Nobody in the house admitted to making the call. She looked at her dairy and found that she and her family had gone for a movie that particular day and it was the maid who had made the call. Thanks to the diary, the mystery was solved.


I have a confession to make. I like to hide extra cash or, sometimes, even jewellery. And when I need to use them, I cannot for the life of me remember where I put those things. Then I get a massive headache trying to figure out where I have hidden those things. I turn the house upside down in a vain attempt to look for the missing items.

Of late I have become wiser. I write down in my diary where I put my precious things. So even if I changed the hiding place, I just refer to my diary, and viola they are there.

Most seniors have empty nests. To thwart would-be burglars, keep a spare set of car keys near your bedside. When you hear unfamiliar sounds like someone trying to open the gate or prise open the door, press the car alarm button. Hopefully the thieves will run away when they hear the alarm. There is no guarantee that you will be safe, but some precaution is better than none.


You may find it useful to keep an envelope with cash in your house. Should the robbers surprise you one day, give them the cash. Hopefully it will appease them and they will leave you alone and not harm you. Many of us use credit cards and have very little cash in our wallets. So the robbers may be furious when they find out that you do not have cash with you.