A Lifestyle We Can't Afford

Sep 18, 2006
SITNews: Paying for a lifestyle they can't afford
by Nur Amira Abdul Karim

UNDERGRADUATE Chua Wei Jun, 22, is majoring in finance - but his own accounts are in a mess.
He is deep in debt: He owes $600 in mobile phone bills and close to $3,000 in credit card payments.

He is one of a growing number of young Singaporeans who are losing control over their spending. They are borrowing money from banks, going wild with supplementary credit cards and tapping friends for loans.

Mr Chua's troubles began when his father gave him a supplementary credit card on his 21st birthday.

Since then, he has used it to buy a pair of Gucci shoes ($800), a PDA phone ($1,000), an iPod video ($500), branded clothes ($800) and a digital SLR camera ($1,900).

He also borrowed $600 from a cousin and $400 from his best friend to pay his credit card instalments and phone bills.

His parents have refused to bail him out.

His mother, Mrs E. Chua, said: 'My husband and I are very disappointed with our son's behaviour and we don't want to encourage it by helping him pay his outstanding bills.'

He is now giving tuition, earning about $800 a month, $550 of which he spends servicing his debts.

His cellphone line has been disconnected and he now uses a pre-paid card.

The only child of a restaurant manager and a housewife is seeking help to curb his compulsive spending habits.

The undergrad said: 'I have been seeing a counsellor in school about my problems. Some days, I can't sleep worrying about my debts.'

While Mr Chua's parents are aware of their son's debt problems, some young people YouthInk spoke to have managed to keep their financial woes fairly quiet.

Ms Suriyah M.A., 19, owes close to $2,000 to three friends for helping her finance a trip to Bali.

The Institute of Technical Education student went there for a week-long holiday, staying in a four-star hotel and splurging on partying, wakeboarding and diving lessons.

Her parents still think the trip was paid for by the school.

Ms Suriyah said: 'My parents would never let me go if they knew I had to pay for it. So I just looked for a way to finance it on my own.'

The nursing student, who works part-time at a manicure parlour and earns $700 a month, believes she can pay off her debt soon.

But fresh graduate Tan B.L., 24, has bitten off a bit more than he can chew.

Currently without a job, he saw his two-year-old Mazda sedan repossessed recently because he defaulted on his monthly instalment payments.

He owes $3,500 to the car dealer and has been threatened with legal action.

The aspiring model said: 'I wanted a flashy lifestyle - and I'm paying the price. I don't want to be sued. I can't afford to have such a stain on my record.'

Some other youngsters are in debt, too, but for less frivolous reasons.

Mr Muhammad Nasir and his friend, Mr Chandran S., both 26, each have $150,000 worth of education loans to repay.

The housemates studied law in the United Kingdom and are now working in a London law firm, each earning £4,000 (S$11,650) a month.

Mr Chandran said: 'Half my salary goes towards paying the loan. I basically live from pay cheque to pay cheque.'

Mr Muhammad, who has three younger siblings, also sends about $1,200 to his parents in Singapore every month.

But he does not see his financial commitments as a burden, 'they're merely my responsibilities'.

Not very many youths here share his sentiments, largely because they do not have a viable exit plan.

Should this trend continue, Singapore youth may share more than a love for pop culture with their American counterparts.

In the United States, young people under 35 have 30 per cent more debt than other age groups.

Said Mrs Chua: 'We should have set a credit limit on our son's card - but we trusted him.

'Hopefully, other parents will be more vigilant.'

The writer is a third-year political science and law student at the Singapore Management University

SLEEPLESS OVER DEBTS
'I have been seeing a counsellor... about my problems. Some days, I can't sleep worrying about my debts.'
MR CHUA WEI JUN, an undergraduate who owes $600 in mobile phone bills and close to $3,000 in credit card payments.

PRICE OF A FLASHY LIFESTYLE
'I wanted a flashy lifestyle - and I'm paying the price. I don't want to be sued. I can't afford to have such a stain on my record.'
MR TAN B.L., 24, a fresh graduate and currently unemployed. He owes a car dealer $3,500 and has been threatened with legal action

Ben and I were discussing about applying for a credit card. Our payslips have never really qualified us for one (mine actually) but recently, Ben's has, but we haven't really discussed about it coz we've been living on one paycheck for the last 2.5years. Coming from a family that's been torn apart by bad debt and instant gratification, I am hesitant about committing myself to a 'luxurious lifestyle' and 'instant ready credit'. I was given a vision before - one of a barrel of tar that's covered by a pretty top. It looked gorgeous and when a person fell into it, it was almost impossible to clean off the tar. I think it applies to credit cards also. Living in a generation of instant gratification, it's dumb to be still paying for that meal you ate a few months ago when you can't make the end-of-the-month credit payments and starts snowballing with interest.

So Ben and I have decided. There's really no need for a credit card. We've got a debit card each, and it works even better. There's no end of the month bills to 'look forward' with fear and trepidation to, and we can use the Mastercard facility just as well. Also, debt puts unnecessary strain on the marriage and the family, and life already provides enough strain for us not to add any extra. Also, I've seen how my mother has bailed her ex-husband (incidentally my dad) out countless times, and we've realised that lending money to pay off other people's debt essentially is saying goodbye to our money which we are trying to be careful with. It just isn't fair when we're trying so hard to be careful with our money and have someone whom we can't say no to ask to borrow from us and then possibly fret when we say no. It is not fair. If we lend, we deprive our children and others whom we can bless plentiful blessings. The borrower may think, "If you lend me, you're blessing me!" But we'll be cushioning the borrower from real consequences and the borrower can happily continue the mindless lifestyle. We don't want to pay for other people's stupidity. That's not fair to anyone at all.

As for our own stupidity, we pray that we will tread carefully in the area of finances. None of us dare to overconfidently proclaim that our marriage can withstand the storms of self-inflicted selfish decisions. Instead, we need to protect our marriage so that our children will grow up in an intact family. We really don't need that extra pair of Gucci shoes or the latest gadget. Great to have it if we can pay with budgeted cash, but it doesn't really hurt not to have it. Like the saying goes, "We buy the things we don't need with the money we don't have to impress the people we don't like (or don't know)." Even without a credit card, we already need to pay off personal loans, which we hopefully will clear by the end of next year. (We've already got a taste of being in debt. Sigh. But we won't ask anyone to bail us out coz we deserve to experience being responsible for our own debt.) What more with the game of using cards to roll debt around? We're definitely not susceptible; we're humans, therefore we have to be extremely cautious because we know we may fall into that trap too.

So we've learnt - if anyone (including ourselves) need to be charged for bankruptcy because of our own stupidity, it's not the end of the world. Be charged, clear the debt ourselves and start afresh. We really don't want to burden other people with any debt and deprive them from whatever they deserve for the money they've so diligently been a good steward over. It's really not fair to them.