SINGAPORE: Life has been rough for an unemployed 25-year-old man after he racked up S$50,000 in credit card debt.
He shared that his mental health has worsened over time, and he feels like he cannot catch a break. According to him, several companies he applied to conduct credit checks as part of their hiring process, and he suspects his poor credit score has been one of the reasons why they’ve rejected him.
“I’ve been paying the minimum every month, never defaulted, but my credit score is EE,” he said. “I’ve got another job interview lined up (not banking, more on the IT side) and not gonna lie, I’m scared. Scared they’ll check my credit and reject me again. It’s eating me up. I haven’t even started work and I already feel like it’s slipping away.”
Over the past few weeks, he said he has been trying to fix his life. He quit smoking, started going to the gym again, and cut off distractions.
Still, despite doing everything he can to get back on his feet, the debt, he said, feels like a “heavy weight he just cannot shake off.”
“I just really want to get out of this,” he lamented.
Ways to get out of debt
Being deep in debt can feel overwhelming, stressful, and honestly a little paralysing. It’s the kind of situation that keeps you up at night and makes everything feel heavier than it should.
That said, no matter how anxious or stressed you feel right now, it’s important to remember that it is possible to get out. No matter how impossible it may seem, there is a way out.
Here are some steps you can take, according to financial experts:
Assess your finances
You can start by gathering all your financial documents in one place. This includes your debt-related statements and recurring bills such as rent, utilities, phone bills, etc.
Then check your income. Look at your payslips or bank statements so you know roughly how much money comes in each month.
Create a realistic monthly budget
Once you have all the numbers, create a realistic monthly budget. Start listing your essential expenses first, such as rent, groceries, transport, and medical costs. After covering the basics, set aside whatever you can to pay down your debt.
Decide which debt to tackle first
There are two common approaches to paying off debt:
Debt snowball: This method focuses on paying off your smallest debt first while continuing to make minimum payments on your other debts. Once the smallest debt is cleared, you move on to the next smallest.
Debt avalanche: With this approach, you concentrate on paying off the debt with the highest interest rate first, while still meeting minimum payments on your other accounts. After the highest-interest debt is cleared, you proceed to the next highest.
If none of these work for you, you can also opt for a debt consolidation plan. This will let you combine all your debts into one single loan, which makes things easier to manage.
Cut back on your expenses
Until your debt is under control, try to cut back on things you don’t really need. You can pause subscriptions you rarely use, eat out less, and skip impulse buys.
Just think of it as a temporary adjustment rather than a permanent lifestyle change. Once you’ve made real progress or cleared your debt, you can slowly start treating yourself again.
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