Agensi Kaunseling Dan Pengurusan Kredit (AKPK), a wholly-owned subsidiary of Bank Negara Malaysia, was established to ensure that the public is able to manage their finances prudently. AKPK’s primary role is to educate people from all levels of income to ensure all Malaysians are equipped with sound personal financial management skills. AKPK offers three core services free of charge, which are: Financial Education; Counselling and Debt Management Programme (DMP).
The last issue of Ipoh Echo featured one success story of AKPK’s intervention. What follows is Success Story #2.
Christine (not her real name) realised that the man she loved had tricked her. Could she forgive him? Should she let this one slide? After all, her husband had acted out of good intentions. Nonetheless, because of his mistakes, Christine is now in big trouble.
“I’ll think about that later,” Christine mused. Right now, her priority was ensuring that the banks stopped chasing her. Wearily she sought AKPK’s help.
Christine was in debt. And it wasn’t a small amount; it was a startling RM375,000 in credit card and personal loans. What was worse was that she did not spend a single cent of the money she owed.
How did this happen? Her husband, Edward, was unemployed and a bankrupt. Thus, Christine, a teacher, was the sole breadwinner while Edward devoted himself to doing the housework and earning a little by giving private tuition to some kids. They were not particularly affluent, but they coped; the bills were paid and there was food on the table. They even had enough to send their only daughter to a good school.
Edward wanted to provide for his family – he wanted to give his loved ones a more comfortable life. But Edward made a wrong move. He became a victim of a gold investment scheme.
To make matters worse, Edward used his wife’s personal documents, without her knowledge, to apply for credit cards and personal loans to invest in the ‘get-rich-quick’ scheme. This was a case of identity theft and Edward could be charged for this criminal act. The investment scheme was later revealed to be a scam and Edward had no way of getting back his money. Christine, however, was under legal obligation to pay the banks’ dues.
Christine wondered what had she done to deserve this fate. She had been a hardworking teacher for years; devoted herself to taking care of her family, even if it meant late nights and little sleep. She had to bear a great financial burden because of her husband’s recklessness.
Rather than wallow in self-pity, Christine knew she had to face up to reality. With AKPK’s aid to reschedule her loans, Christine now has a chance of settling her debts by enrolling into AKPK’s Debt Management Programme.
AKPK’s Tips on Spending
Guidelines to help you spend wisely and responsibly:
Spend within your means
Always be aware of your financial situation and how much you can comfortably afford to spend.
Prioritise your spending
Different people have different needs – some tend to spend more on clothes while others spend more on food. Whichever you choose, prioritise your spending and stick to it.
Plan ahead of time
Leaving arrangements for the very last minute is not encouraged since there is a tendency of going overboard due to the lack of options to choose from.
Keep your savings in mind
Don’t neglect your savings (minimum 10% of monthly salary) while planning your festive budget. It might be tempting to leave savings out “just this one month” to accommodate the festive spending but you will be glad that you stuck to your savings in times of emergencies.
Financing the Festivity
According to a survey by iMoney, more than 10% of respondents resorted to borrowing money for the purpose of celebrating Hari Raya and over 15% of respondents spent more than RM3000 on top of their normal expenditure for the celebrations. How do we change this?
Never take money from unlicensed moneylenders or cash advances from your credit card.
Do not take loans to finance the celebration. Loans should only be taken for productive purposes. While some may argue that a celebration is a productive purpose, ask yourself, “What about next year and the year after? Will I continue doing this? What repercussions will it bring to my budget?”
Where possible, avoid taking cash advances from your salary for the festive period. You are going to have to pay the cash advance back to your company at some point.
Avoid using your credit card for purchases, use cash instead. This will not only help you stick to your budget and track your expenses, it will also save you the money you would otherwise pay for interest.
Don’t buy it only because it’s on sale
Make sure you can afford it
Buy it only if you need it, but also be cautious of a purchase if you have to spend more on it.
For example, if you are eyeing a particular attire, and feel that you will need to make further purchases (accessories, shoes, etc.) then the purchase of the attire may not be worth it as it will lead to additional expenses.
Check items thoroughly for any defects – the paying price must correspond to the quality.
AKPK Ipoh Branch Unit B-2-1 Greentown Square Jalan Dato’ Seri Ahmad Said 30450 Ipoh. Tel: 605 242 8319 Fax: 605 242 8452 Website: www.akpk.org.my