22 July 2014
By Sakini Mohd Said
KUALA LUMPUR (Bernama)
-- Her furniture was in good condition - its colours still bright and its
structure still solid. The curtains in the two-storey house still look like new,
too.
In fact, everything
looked fine. Nothing was old, ruined, or faded.
"Abang, let's just
change our sofa set. The design is outdated. I am embarrassed to let our guests
see it", Sofia complained.
Her irrational request
was undoubtedly met with her husband's disapproval. An annoyed Sofia tried to
come up with other excuses to buy new furniture.
This is the short sketch
on wastefulness when spending for Hari Raya, which was aired on television
recently.
Although it was meant to
be humorous, Sofia's story is all too familiar in today's society. Many believe
that it is alright to spend freely in celebrating upcoming festivals. Few
realise how detrimental such wastefulness can be.
DISCOUNTS AND GIMMICKS
It cannot be denied
shopping centres too tend to take advantage of upcoming holidays and festivals
by offering incentives to consumers so that they spend big.
Those on a different
budget have the option of visiting the numerous bazaars set up during Ramadan
selling items like tablecloth, traditional clothes and "kuih raya"
(cookies).
These traders are simply
competing with each other in the bid to push up sales.
Some place hefty
discounts, others put on "raya" songs to get visitors in the buying
mood, while others resort to other gimmicks.
Taglines like "buy
now, pay later!" and online promotions can prompt many to make hasty
decisions and spend beyond their means.
"Malaysians tend to
celebrate Aidilfitri or other festivals on a grand scale. They would buy new
clothes, change their furniture and other items.
"Some go overboard
with the spending and find themselves in a financial quagmire after
Aidilfitri", said Mohd Yusof Abdul Rahman, the communications director of
the Federation of Malaysian Consumer Associations (Fomca).
SPEND FIRST, THINK LATER
The typical mentality
among these big spenders is that "raya only comes once a year", so
why not spend a bit more.
Those with poor budget
management sometimes fail to maximise the benefit of the early disbursement of
salary and the additional raya bonus.
They will spend to their
last ringgit, and continue their shopping frenzy with credit cards, without
sparing a thought to the possibility of running a serious debt.
"People tend to
overspend when they don't pay by cash.
"It would not be a
problem if they can manage their debts well. But what if they fail? Thus would
it be better to use cash or debit card", asked Mohd Yusof.
Failing to settle credit
card debts does not only mean that they may have to tighten their belts by the
end of the month. It could also mean that they will not be able to pay for
their house and car installments, utility bills and other recurring monthly
expenditure.
IN DEBT?
More worrying is the
trend to borrow from "ah longs" (loan sharks) because they have
exceeded their credit card limits. This is an unhealthy development that can
lead to serious consequences, as often highlighted in the media.
"I have been told
that an overwhelming number of people go to unlicensed money lenders prior to
the festive season.
"This shows that people
are running themselves into a debt in preparing for the celebration", he
said.
This begs the question
whether taking such risks in the name of celebrating a festival are all that
necessary.
Is it worth it to borrow
money to spend on a new car or a new phone for Hari Raya, at the risk of losing
one's life to moneylending thugs?
Mohd Yusof said a survey
by Fomca revealed that 37 per cent of young people spend outside their means.
Meanwhile, 47 per cent
of respondents use 30 per cent of their earnings to repay loans.
BANKRUPTCY
Those who like to pile
on debts may soon find themselves on the brink of bankruptcy.
The Malaysia Department
of Insolvency showed that 23,397 people who were declared bankrupt from 2007 to
September 2013 were between 25 to 34 years old.
Even more worrisome is
that there are those who have yet to reach 25 years old, but are already
bankrupt.
"Societal awareness
on financial management is still low. This is because it is hardly impressed
upon in school.
"It is only in the
recent years that there have been programmes on financial management education.
This came about after the Insolvency Department reported that 61 people are
declared bankrupt everyday", he said.
Meanwhile, the Credit
Counselling and Debt Management Agency (AKPK) Head for Johor Bahru, Mohd Nasir
Mustafa said the worse thing was that some of them did not even know what a
budget meant.
This is despite how easy
it is to budget for the festive season, considering it only occurred once a
year, with ample time to save for the celebration.
READY TO HELP
To address this problem,
AKPK is ready to help the public become smart consumers.
The agency launched many
programmes to help individuals take charge of their financial situation and
gain peace of mind due to wise credit management.
Among them is the Power
programme, aimed at helping the young manage their personal finances as well as
provide counselling services for them.
"It is not wrong to
spend, as long as it is within one's means. Try not to succumb to the temptation.
"We need to
allocate at least 10 per cent of our salary for savings and emergencies",
he said.
-- BERNAMA
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