Here is the financial position of a person that I know. He’ the son of an ex-colleague I used to work with. He grew up in Penang, took his tertiary education in Kuala Lumpur and then remained there to work. He is now in his early 30s, still single and earning a relatively decent and progressively growing income. I shall call him Daniel.
Daniel is so very typical of the young executive-about-town in Kuala Lumpur. With his salary, he should easily be able to afford an apartment in Kuala Lumpur. But that’s not how it seemed.
Several months ago, his parents began to pressure him to buy a medium-cost apartment in the city centre. But Daniel had problems. Though he had been working for the last six years, he found himself unable to afford the basic down payment for the unit, not to mention all those miscellaneous fees that come along with buying a home.
That’s baffling to people around him. How can Daniel, whose monthly take-home pay is about RM4,000, be unable to come up with the cash to secure a city pad? Daniel knows the answer but he just couldn’t tell his parents.
The reason was, he’s been affected with high credit card debts for several years now. He has a savings account, into which his monthly salaries are credited, but there is just no savings. Due to his excessive spending habit and monthly obligations, his savings balance is left to a mere minimum.
“It’s an experience of regret and disappointment, as I realised that I’ve not been managing my finances well. I need to re-assess my financial position,” Daniel acknowledges.
His excessive spending, high debts and poor savings are some of the most common financial shortfalls faced by young adults. If not rectified, financial experts warn, these mistakes could lead to further regret and much inconvenience in the later years of one’s life.