How to curb your debts

Good spending habits can help curb debts. It’s discipline that matters most WAGES is a sensitive matter and with the economic downturn, there are suggestions for it to be paid on a weekly or even fortnightly basis.

A system of weekly salary payments, said reader Saad Hashim in his letter to the editor on Monday, would help people plan their budgets better and hopefully, avoid going to the Ah Long.
With modern technology, he reckons that this should not be too difficult for companies to implement.

Many feel that getting weekly wages enables them to plan their cashflow better with one person suggesting that it could be more useful to those in the lower income group.

This is the group that manages their expenses on rather tight cashflow. A weekly wage system would help them plan on a more realistic basis when it comes to big ticket items. These items usually require lump sum payments on a monthly basis and those who got caught in the initial euphoria of such large purchases, may find that they don’t have much left after that big monthly payment.

What if there are several of these payments? With the sudden downturn in the global economy, many companies find their sales and exports zooming down, leaving them with little recourse but to cut working days, freeze salaries and bonuses.

In view of the protracted economic downturn, it may be timely for companies to look into suggestions for weekly or fortnightly salary payments, depending on the needs of their employees.

Some worry that it may be even more difficult to plan with weekly wages as sizeable items such as rentals are usually paid monthly here. Again, with modern technology, arrangements can be made for deductions via Internet banking.

In fact, with so much gloom and doom outside, the excitement of receiving wages on a more frequent basis may be an event to look forward and become a motivating factor. This is especially so for those who were used to receiving bonuses, allowances or ex-gratia payments in between. Nowadays, there doesn’t seem to be much to look forward to apart from fixed salaries.
Even as investors, many have turned risk averse and learned to accept very low savings rates. Once in a while, they rush to snap up some savings bonds, whenever they are offered.

There is also a large group out there who can’t be bothered with small wage payments every week or once in two weeks. They could be the more disciplined group who stick to an overall budget allocation for specific items every month. Some suggest monthly salary payments are more feasible for this group which are likely to have surplus funds and therefore, may not need to budget so tightly.

In fact, some may have used up their surplus funds in the stockmarket; those who got burnt may want to opt for weekly wages to help them tide over! In the long run, it is personal discipline and good spending habits that will help curb debts which can be incurred as a result of addiction to drinks, gambling and other vices.

Many also have a tendency for showing off, living beyond their means and keeping up with the Joneses, which can be difficult in the current economic situation.

● Senior business editor Yap Leng Kuen advocates careful spending amidst hard times as the debt spiral can be disastrous in terms of ballooning payments and damage to otherwise, enduring relationships.