No More Car Loan Installment Payment of RM820 from August, 2010 Onwards!

I had been waiting, waiting, waiting and finally the buyer deposited the money into our auto loan account to settle the remaining loan balance of RM12,000 this morning. Phew, what a relief!

According to the bank officer, we will get the release letter by Friday afternoon. This means the transfer of title and registration can only be done on Friday afternoon or Monday morning.

From next week onwards, our car (1996 2.2 Toyota Camry) will belong to hubby’s buddy while his car (1995 1.5 Proton Wira) will be ours. He sold his car to us for RM8,000 while we sold ours to him for RM20,000.

Starting next month, there will be no more car loan monthly installment of RM820 and yearly road tax renewal charge of RM560. It’s really a burden lifted from our shoulders.

I am so grateful to have sold the car at a reasonable price successfully. Now I am waiting to receive good news from the school for a full time job employment.

If I am employed, there will be extra RM1,000 every month to be saved as emergency fund.

What’s God’s New Plan For AKPK Debt Management Programme Blogger?

God has to be kidding with me. Just as I was so blessed with my personal savings, rental income and increasing online income (AKPK DMP Blogger is Back to Financial Track Slowly and Steadily) , boom, my Google AdSense and paid review earnings dropped tremendously.

Yes, a sharp decline in my online income! From making around $1,000 a month to less than $300 now! Boo hoo hoo. This is totally unacceptable as it came out of no where and caught me off guard.

All of a sudden, the online assignments given by an advertising network dropped by 70% starting 3 weeks ago. And then my Google AdSense earnings began to see a decline from more than $10/day to $5 a day to, oh my God, less than $1 today!

If there still aren’t many online assignments this week, it’s for sure that I must look for a full time job to supplement my online income that falls to less than $300 or RM1,000 a month.

This RM1,000, plus hubby’s RM2,000 ++ income, is simply not enough to pay our AKPK debt repayments (RM680), auto loan (RM820), home loan installment and bank overdraft charge (RM525), flat rental (RM270), internet connection fee (RM110), utility and cell phone bills. Besides, there are still meal expenses and groceries.

A cut of 70% on my online income! Is it temporary because of the 2010 FIFA World Cup fever? I don’t know.

If the advertising network I am working for still gives out very few online assignments this week, I think I will have to start making appointments for job interviews.

God, are you showing me your new plan? If so, it has got to be a better plan than the one I am having now, okay? Have faith in You.

30-Day Challenge of Tracking Every Dollar & Cent – Day 1 – RM32.60, Day 2 – RM31.10, Day 3 – RM41.25, Day 4 – RM341.60, Day 5 – RM47.70, Day 6 – RM110.60, Day 7 – RM14.60, Day 8 – RM20.05, Day 9 – RM6.50, Day 10 – RM101.45, Day 11 – RM17, Day 12 – RM89.70, Day 13 – RM58.20, Day 14 – RM13.90, Day 15 – RM26.60, Day 16 – RM268.15, Day 17 – RM15.90, Day 18 – RM61.70, Day 19 – RM47.70, Day 20 – RM17.70, Day 21 – RM47.90, Day 22 – RM69.20, Day 23 – RM120.10, Day 24 – RM22.90, Day 25 – RM16.40, Day 26 – RM81.70.

Day 27 of 30-Day Challenge of Tracking Every Dollar & Cent:

Breakfast – RM2.50
Lunch – RM8.40
Dinner – RM7.80
Total Spent: RM18.70

Day 28 of 30-Day Challenge of Tracking Every Dollar & Cent:

Breakfast – RM3.20
Lunch – RM7.90
Dinner – RM7.50
Total Spent: RM18.60

Day 29 of 30-Day Challenge of Tracking Every Dollar & Cent:

Breakfast – RM2.50
Lunch – RM11.50
Weight Loss Powder – RM39.90
Chicken Essence – RM64.90
Dinner – RM9
Total Spent: RM127.80

Day 30 of 30-Day Challenge of Tracking Every Dollar & Cent:

Breakfast – RM7
Lunch – RM5.90
Fruits – RM4
Dinner – RM8.20
Fluorescent Lights – RM119 (for house in Ipoh)
Total Spent: RM144.10

* AKPK debt repayments of RM680, car loan installment of RM400 and Streamyx broadband access service bill of RM112 are fixed payments.

This is a series of posts about ‘AKPK DMP Blogger’s Book Review: Tip-Tip Kewangan Untuk Rakyat Malaysia by K.C Lau’ – Part 1, Part 2, Part 3, Part 4 and Part 5.

05.05.2010 3.19 p.m.

Finally, the much anticipated book, Tip-Tip Kewangan Untuk Rakyat Malaysia, which was written by K.C. Lau, arrived at my doorstep this afternoon!

It’s a 353 mm x 250 mm envelope that’s too big to be stuffed into my mail box, so the postman left it on my door mat. Inside the envelope were two books sent by K.C. Lau.

One being his own book, Tip-Tip Kewangan Untuk Rakyat Malaysia while the other one, The 8-Day Internet Wonder by Edwin John.

I personally requested K.C to send me these two books for reviews because the topics fit my blog, www.FreeDebtManagementProgram.com, perfectly. My blog covers topics like credit card debt, AKPK debt management plan, emergency fund, saving money, spending, expenses, income streams, …

05.05.2010 6 p.m.

Okay, I am ready to share with you some of the tips!

As you can read from the title, Tip-Tip Kewangan Untuk Rakyat Malaysia, it’s written in Bahasa Malaysia. No sweat if you are a Malaysian, right?

There are 4 parts in the book:

Bahagian 1: Tip Kewangan Bijak
Bahagian 2: Tip Menjana Wang
Bahagian 3: Tip Menjimat Wang
Bahagian 4: Tip Melindungi Wang

As I am currently in AKPK debt repayment plan and very interested in picking up more saving money tips, I jumped to Bahagian 3 first.

Bahagian 3 – Menjimat Wang (Tip #13 – #17):

Tip #13 – Miliki Kereta Pertama Anda Secara PERCUMA. I totally agree with buying used/second hand cars to save money!

The first car hubby bought was a new one, Ford Laser 1.5, with RM826 monthly installment. He paid a total of more than RM55,000 for a 5-year auto loan and when he sold it, he got back only RM21,000.

The second car was a used Proton Wira 1.3, with RM620 monthly installment. The selling price was RM28,000 and it was at RM15,000 after 3 1/2 years.

The third car is a used Toyota Camry 2.2, with RM820 monthly installment and RM594 yearly road tax. It was bought before we  got into very deep credit card debt.

During the time of struggling with increasing credit card debt, we did think of selling it to cut down spending, but we couldn’t. The amount of car loan still owed to bank was simply larger than the car selling price; there’s still a need to fork out a few thousand ringgit.

Now that with less than RM14,000 car loan to go, hopefully it can be paid off without difficulty by August 2011.

Go to ‘AKPK DMP Blogger’s Book Review: Tip-Tip Kewangan Untuk Rakyat Malaysia by K.C Lau’ – Part 2.

30-Day Challenge of Tracking Every Dollar & Cent – Day 1 – RM32.60, Day 2 – RM31.10, Day 3 – RM41.25, Day 4 – RM341.60.

After having breakfast with my younger sister and her hubby this morning, I went to school with hubby to help him print out the mid term exam papers and notices.

As last night’s dinner and this morning’s breakfast were kind of heavy for me, I decided to skip lunch and dinner.

Tired now. Maybe I should go to bed early.

Tomorrow, remember to deposit May’s rental to the landlord! After paying RM270 for rental, it’s going to be a few weeks before I pay for my AKPK debt management program repayment, hubby’s AKPK dmp repayment, bank overdraft interest charge, home loan interest charge, car loan installment, Streamyx bill and other utility bills.

Breakfast – RM24.30 (breakfast with sister and her hubby)
Lunch – RM7.50
Toile Rolls – RM15.90
Total Spent: RM47.70

How’s my savings going on? Well, sehr gut or very good. From RM1,500 when I mentioned it in December’s blog post, Thank God for AKPK Debt Management Program, Steady Income and Good Health, to RM3,000 now.

An increase of RM1,500 in two months! Amazing, right? This has got to do with a sudden increase in the number of online tasks in January. This doesn’t always happen though I hope it will.

Has my hubby found out my personal saving? Well, I am pretty sure he knows I am stashing away money. Just that he doesn’t know the exact amount.

I still need RM500 to reach my RM3,500 saving goal. I am thinking of transferring RM500 from hubby’s bonus and Ang Pao to my saving so that it hits RM3,500.

Speaking of hubby’s bonus, both of us are a bit disappointed with his half month’s bonus. We thought he could get a one-month bonus as said/mentioned by the principal when he was interviewing hubby.

Anyway, hubby only started his work in July 2009, so it’s actually fair to get half month’s bonus, right? Oh, not to forget that hubby got a RM200 salary raise starting January 2010!

Besides, there is still Ang Pao or money gift. According to hubby’s colleagues, it’s going to be given out on Friday, that’s tomorrow! Hopefully it’s between RM500 and RM1,000.

Be grateful, you AKPK DMP blogger! Count your blessings, please! Do you know that you and your hubby:

1. are now both in AKPK free debt management program that helps you pay down credit card debt with lower monthly repayments of RM320 and RM360 respectively;

2. have a dual income between RM4,600 and RM5,000 every month;

3. have an emergency fund of RM3,000 in the saving account;

4. have money to pay auto and home loan installments, utility bills and flat rental in time;

5. have extra money to spend on clothes and personal supplies;

6. are healthy and strong;

7. …

Thank You God for what I am and will be having. Wuahaha!

You have a debt problem, but it’s not serious enough to get you into AKPK debt management program yet? Lucky you! If you don’t want to resort to enrolling in AKPK’s DMP or declaring bankruptcy in future, then make sure you start managing your personal debt now.

Here is Raymond Roy Tiruchelvam’s article on How to Manage Personal Debt.

THE “easier said than done” phrase latches on to this topic like ants to sugar. While getting into debt is made easier today with the many innovative marketing plans undertaken by financial institutions, getting out of if, leaves much to be pondered.

For those who do not see the light at the end of the tunnel, Bank Negara has introduced AKPK or Credit Counselling and Debt Management Agency. I am assuming a single source of funds being financial institutions, and not “ah-longs” and other unconventional sources.

There is actually one step to be undertaken prior to managing your debt, which is managing your cash flow. It does not mean that if one is a millionaire, there is no need for debt management … well perhaps there is no need, since the ability to source for debt is high, but everyone will need to manage their cash flow, let it be millionaires or paupers.

Let’s look at some steps that we can take to ensure that we are able to manage our personal debts so that we do not go into the “PN4” or “PN17” status (which for companies implies a financially distressed state).

Let’s start with liquid debts, credit card and car loans. For the former, never follow the minimum payment requirement of the bank, which is 5% of outstanding sum. The reality is that it does not diminish in 20 months (5% X 20 months = 100%) – which is the general misconception.

Instead, spread the payment over a reasonable payable period. For example, if you purchase a personal computer for RM1,500 perhaps, you want to make a RM300 monthly payment over 5 months, rather than pay RM75 in the first month, then RM71 for the second month and so on (assuming one follows the minimum 5% payment, excluding interest charge).

As a matter of fact, if one were to purely pay the 5% minimum payment, do you know that it will take 50 years for the sum to trickle down to RM100. And mind you, even with that, the debt won’t be fully settled.

As for car loan, do not take a hire purchase (HP) contract for more than 5 years. What would a car costing RM80,000 be valued at after 2½ years? Depending on the type of car, continental or eastern, a 5-year HP term will value it at RM40,000 (assuming a simplicity straight line depreciation, 100% hire purchase financing, excluding interest with zero value at the end of the payment term).

Assuming one needed cash, don’t you think it’s easier to find a buyer at RM40,000 compared to if you were to take a 9-year car loan whereby you will need to find a buyer at RM62,222 (remaining loan balance after 2 years for a 9-year HP plan).

Naturally, one would say if not for the 9-year term, he or she will not be able to afford the vehicle … but that’s exactly the point. If you can’t afford it, then don’t buy it!

Next comes personal loan. Firstly, it baffles me that banks are giving out “clean” loans today, meaning non-collateralised, non-guaranteed loans as personal loans to almost everybody with a monthly pay slip. If you are unable to pay, there is little recourse, as compared to hire-purchase loan, where you may have the option of selling the car. Hence, unless you are sure of the purpose and that the usage of the funds will return a cash flow, do not indulge in one.

Using electronic means via Internet banking and online payment systems is a good way to manage your cash flow. Today many banks have this facility that allows you to also format standing instructions to promptly pay a fixed sum on a particular date towards debt settlement. This will help you ensure that priorities take precedence. Therefore, it’s only the balance cash after settling debts that will be available for disposal.

What will be the comfortable debt to income ratio? Zero is preferable, otherwise a 25% maximum limit of disposable income is recommended. For example, if you had bought the RM80,000 car mentioned earlier, on a 5-year term; assuming a simplified zero interest scheme, you would be paying RM1,333 monthly installment.

Therefore following the 25% debt to income ratio, you should be earning a minimum of RM5,333 per annum. This is after tax and EPF, therefore gross monthly salary should be about RM6,200. So after reading this, do you think you have overspent on your car? There is no under-spending by the way, since the ratio is only an indicator, and I am sure you would probably want to also invest in a housing loan.

You can also increase your capacity to loan, by simply borrowing money to invest where the returns are higher than the cost of funds.

If you can find one an avenue that guarantees this position, then do inform me, I too am curious!

Raymond Roy Tiruchelvam is a former senior manager – economics and investment analysis at an oil and gas outfit.

If you think that you do not see the light at the end of the tunnel, then attend AKPK’s briefing to see if you need a debt management plan to help you get out of debt.

Happy New Year 2010! It’s the 2nd of January today and I am so tired now after a few hours’ washing and cleaning the rented flat.

Though I am very exhausted, I am glad that the new phone line and Streamyx broadband access accounts are finally up and running smoothly.

Many thanks to God and hubby’s buddy who made applying and installing the accounts fast and without hassle.

How’s the Streamyx Combo 1.0Mbps speed? Well, I must say that it’s faster than my previous RM66/month package. Super fast? Well, not really.

Anyway, I will observe the performance of Streamyx Combo 1.0Mbps for a few more days. If it’s super fast, you’ll see no blog post ranting about Streamyx from me.

It’s the 4th of January today. I wasn’t able to finish the post I wrote on the 2nd of January due to endless cleaning and unpacking the stuff.

I am tired and having a headache now. But, I still feel like updating my AKPK debt management programme progress blog a bit.

How’s the Streamyx speed? Still great. Nothing to complain about so far.

How about hubby’s and my AKPK debt management program repayments? The repayments are still made on time, so there is nothing to worry about.

Auto and home loan installments? Fine too.

Hubby’s income? Should be fine. It’s a steady income from his full time teaching job in a high school.

As for my online income, I have been seeing a little decrease in Google AdSense earnings since the 23rd December. Hopefully it’s only because of Christmas and New Year holidays.

Updated on January 6th, 2010: Thank God, my Google AdSense earnings starts picking up again. Phew, what a fright!

Thank God that my PayPal withdrawal fund status is showing ‘Complete’ now! Woo Hoo! I am going to see the fund in my debit card account next week.

I did the fund withdrawal on November 17 and when I saw that the money was still not in my debit card account on the 21st, I felt that something’s wrong.

I logged into my PayPal account and was surprised that the status of the withdrawal was still showing ‘Pending’. You know, it normally takes a day only for the status to change from ‘Pending’ to ‘Complete’.

Instead of waiting for a few more days, I decided to send an email to PayPal. In a few hours, I received a reply from the PayPal’s customer support department.

It seemed that I was not the only one whose fund was still in ‘Pending’ status. I was asked to wait for a few days. If the money was still pending after 7 days from the initial transaction, I had to contact them again and they would help me deal with it.

You know, if this had happened before I enrolled in AKPK debt management programme, I would have worried to death! Why? I was so in need of the money to pay my credit card payments then.

I still remember the PayPal glitch that happened last September. I was still waiting for the approval of my AKPK application when my PayPal fund arrived late in my Tune Money Visa debit card. It took 38 days!

You won’t understand how worried I was during those weeks waiting for the money to pay the overdue credit card payments, utility bills, and car and home loan instalments.

And on top of that, I had to face with the possibility that my AKPK DMP would not be approved due to my online income statements.

September 2008 was a very stressful month for me!

This time I am not as worried and stressful. I have some savings in my personal saving account that I can use should there be any unexpected expenses. Touch wood! Who wants unexpected expenses?

I am grateful that the status of my PayPal fund is showing ‘Complete’ now. I am also relieved that PayPal glitch only happens once in a year.

Hubby’s full time teaching income has been increased from RM1,500 to almost RM2,000 after EFP and SOCSO deduction.

With hubby’s RM2,000 net income, together with my online income of RM2,500 (my income is between RM2,500 and RM3,000), I must say that I don’t have to worry much like I did last time when hubby didn’t have a fixed full time job.

After paying the AKPK debt repayments of mine and hubby’s RM680, auto instalment RM820, home loan instalment plus bank overdraft interest charge RM530, utility bills plus Internet connection and cell phone fees RM270, and food and grocery expenses RM800, there is still about RM1,400 left in hand to be save as emergency fund.

Of course, the amount of RM4,500 only started to appear on the 28th of October! Prior to that, hubby’s income was still RM1,500.

Though there should be RM1,400 left to be saved in the savings every month, we still haven’t got the chance to own the full amount of RM1,400 and save it in the account. Why?

Well, there had been a few unexpected expenses that sucked the extra money and personal savings away. Eye specialist fee, bifocals, vitamins, supplements, wedding gifts and funeral money gifts, …

Ask the Chinese Malaysians that you know, how many wedding dinners they have attended and how much they have spent on gifts and money gifts for wedding from the month of September till now?

And how many more wedding receptions and dinners they are going to attend and the estimation of wedding money gifts they are going to fork out this December?

Ask too if they have ever received two or three wedding invitations which are/were held on the same day?

These few months are peak season for wedding! Wedding is the bride and bridegroom’s business, why do they have to make the whole world busy and waste money?

I will never forget a wedding dinner that I attended Kuala Lumpur more than 10 years ago. It started at 9 p.m, two hours late!

I waited for two hours! I should say I wasted two hours waiting for the dinner to start. You know, it’s only a not-so-close colleague’s wedding.

Yes, from what I have written, I am sure you can figure that I hate attending wedding dinners. And also birthday parties.

I am now at the stage of life where I want to spend my time doing the stuff I like. I no longer want to use my time to do other people’s stuff or stuff that make others happy because I give them face but in the actual fact I hate it.

Of course, there are exceptions. I will still attend family members’ wedding dinners and birthday parties. I mean those who are really really close and those whom I like.

So, when do hubby and I really get the chance to own the amount of RM1,400 and save it as emergency fund in the saving account?