A new year is almost upon us. This means it’s time to review your resolution goals and make new ones! If you’ve decided to really double down on your debt for 2019, here are a few tips to craft your milestones!

Common Forms of Debt

There’s good debt and bad debt, but at the end of the day, all of them are debts and need to be repaid. Common forms of debt the typical Malaysian will incur in their lifetime will include credit card debt, home loan debt, personal loan debt, and student home debt, in addition to any installment purchases you may make.

Create Your Budget

It’s a good idea to have a budget list that you can update every year, or better yet, every quarterly. A budget is a way to keep you conscious about your expenditure and income levels, and it can quickly raise red flags if your income and expenditure levels are at risk. Once you’ve kept track of your income and expenditure for a few months, you should have a good idea about how much spare income you can put towards your debt. Don’t worry if you’re new to budgeting; because your budget is flexible, budgeting and debt repayment an go hand-in-hand.

Synergise Your Goals

Image via Better Humans

Yes, your resolution can be focused on reducing your debt, but it doesn’t mean that debt must stand alone! Pore over your budget plans, or create one if you haven’t done so. Are there any areas you can trim? Perhaps you can lower your food budget by making healthier, home-made meals, thus reducing your budget and achieving your health goals at the same time. That’s a good way killing two birds with one stone!

List All Your Debts

Now that you have a refreshed (or new) idea about your monthly cost of living and available spare income that can go towards your debt, it’s time to update (or list anew) all the debts that you have. Key information you might like to have would be the loan value, the interest rate charged, the debt tenure, and the minimum monthly payment, if available. With these information, you will be able to work out the absolute minimum monthly payments you have to make every month – now it’s time to strategise and go way beyond that minimum, so that you can achieve your debt-free goals!

Determine Type of Interest Charged

Not all loans charge interest the same way. In general, there are two types of interest rates, namely the flat rate and the reduced rate. A flat interest rate will cost you the same amount of money regardless of how early you pay off your debt, while a reducing balance rate will charge interest based on the balance debt, causing you to pay more interest up-front but less interest as you polish off the debt, with a more flexible time-frame. Therefore, it makes little sense to pay off a flat-interest debt early, and you have extra incentive to pay off debt with a reduced balance interest rate. Use this information to stretch every repayment ringgit you have!


Carrying debt is a normal part of adulthood. Don’t be afraid of it. Plan your budget carefully, allow yourself some looseness to enjoy your life, and you’re well on your way to control your life and eventually become debt-free!

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