Tuesday, March 18, 2014

Financial freedom..or shackles

With the wedding and all those nonsense out of the way, I guess there's something that I should confess: I'm in debt.

Nope, it's not because of the wedding. In fact the wedding was a fairly budget but fun event with the average budget breakdown (+ all those other random nonsense) amounting to as such:
- Wedding photoshoot = $5.2k
- Actual day photographer = $1k
- Balloon decorations = $0.5k
- Wedding banquet = $10.3k (marginally above budgeted of 9k + GST)
- misc items = $1k

But these are not the key concerns as they are already taken care of before the wedding. Rather, the debt that I speak of is credit card debt. I must confess that I'm quite the spendthrift in the 1st few years when I first started work and owned several credit cards.

It has been like 1-2 years since I'm knee-deep in debt and everytime the bonus comes along, somehow there will always be large item expenditures (eg diamond ring, maldive trip, etc) that comes in place. This debt initially started when I contemplated borrowing on credit to invest in stocks. Having a return of 8-10% then within 3-6 months period seems very attractive given that I'm financing at 1.5-2.5%.

But the problem all started when I liquidated the stocks but did not pay back all the proceeds. With spare cash in hand, you tend to spend them on online shopping, drinking and other stuff. Or so you get the drift.

So at various stages in life, I was splurging on things like sunglasses (had like 4-6 pairs of Oakleys), online shopping (that explains the shitload of Adidas gear I have), shoes (many running shoes), all those Bandai toys and other misc items.

In short, I have been shackled instead of achieving a certain degree of financial freedom. And without a doubt, that left me with little choice but to sit things out and wait for the debt to be cleared while cutting down on my spendings. To date, I'm looking at around 30+k of debt to be cleared.

Let's see if I can achieve my intention of clearing all these debts by Aug. Perhaps this confession should serve as a red-flag and warning light to many other younger folks to practise financial prudence.

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