Trapped By Lure Of The High Life

[MaCe 3]

Trapped by lure of the high life

ONE was an unemployed woman who bought a $7,000 home theatre system on hire purchase.

Another a young executive who chalked up $5,000 on each of his five credit cards.

Then there was a couple with children who took a $100,000 bank loan to renovate their four-room flat.

Come crunch time, all could not pay.

MPs and social workers say they are seeing a significant number of residents turning to them for help to clear their debts.

This picture emerges despite, or perhaps because of, the booming economy and nearly full employment.

The issue was highlighted on March 15 by Prime Minister Lee Hsien Loong at a Malay community event. He said that MPs 'often see families who have over-committed themselves financially' - for instance, those who had been 'extravagant in doing up their homes using renovation loans'.

Others had 'bought expensive furniture or large-screen TV sets on hire purchase'.

'Those with the most serious problems have bought homes which are larger than they can afford, and taken mortgages which they are then unable to pay,' he said.

In Pasir Ris-Punggol GRC, MP Charles Chong said he sees about three such cases each week at his Meet-The-People sessions.

Over in Tampines GRC, the number of such cases is about five to six each week, said MP Masagos Zulkifli.

The stories are often similar: The debtors had signed up for large house or car loans or hire-purchase agreements; or chalked up high credit-card debts. Sooner or later, they ended up unable to keep up with the monthly payments.

While such debtors cut across all races and income groups, more than half are Malays belonging to the lower-income group, said the 10 MPs and social workers interviewed.

While the problem is not new, MP Zainudin Nordin of Bishan-Toa Payoh GRC, who sees about five to six such cases each week, said it was 'definitely a worrying trend'.

MPs and social workers agree there will be the 'hard luck' cases - those who experience a sudden loss in income or have family members hit by major illnesses.

But they say there are others who simply cannot separate 'needs' from 'wants'.

In fact, the consumerist urge in a time of affluence could worsen the problem: the proverbial 'keeping up with the Joneses'.

Mr Zainudin, who is also mayor for Central Singapore District, said: 'There are those who expect to live as well as their peers.'

Ms Nur Hilyah Saparin, who is the centre head of Ang Mo Kio Family Service Centres (Sengkang), observed the same pressure.

'Their logic is that they must provide the best for their families. If they don't, they reason that they are not being responsible,' she said.

Pasir Ris-Punggol GRC's MrChong once met a man who bought a $4,000 bed for his family when he earned only $2,000 a month.

Jurong GRC MP Halimah Yacob recalled meeting an unemployed woman who bought a five-room flat that required a monthly payment of $1,500.

The situation is not yet alarming, the MPs and social workers say. But they worry that if the economy slows down and more jobs are lost, it could get worse.

The growth in credit card numbers and hire-purchase agreements is part of this nexus, especially when consumers lack discipline.

Credit card numbers have grown, according to the Monetary Authority of Singapore. In 2005, there were about 4.45 million cards. In January this year, the number jumped to 5.72million.

The average spending per month of credit card-holders is rising: from $3,755 in 2005 to $4,272 last year, figures from the Credit Bureau (Singapore) show.

Last December, the total amount of 'rollover' credit debt - when a card holder pays only the minimum allowed every month, carrying over the remainder to the following month - also hit a new high, crossing $3 billion for the first time.

Such numbers should be watched closely, said Mr Kuo How Nam, president of Credit Counselling Singapore, a non-profit organisation which gives advice to debtors who have trouble repaying credit card bills or bank loans.

He also worries about the effect of a downturn on people with rollover debts. He said the message that credit cards are a means of payment but not a means of borrowing should be drummed into the public.

Ms Anne Tay, OCBC Bank's vice-president for group wealth management, suggested that people should go for financial health checks.

She has this advice: 'Living within your means is not enough because it means you spend what you earn. Try to live a lifestyle below your means instead.'

Or as Pasir Ris-Punggol GRC MP Penny Low asked: 'Is it the high cost of living or the cost of high living that is leaving us breathless?'

jamieee@sph.com.sg

chenmy@sph.com.sg

[TYM 0]

Or as Pasir Ris-Punggol GRC MP Penny Low asked: 'Is it the high cost of living or the cost of high living that is leaving us breathless?'

The perils of spending "future money". But unemployed woman spending $7k on on HT system, what was she thinking?

Cost of living is definitely rising, should not use this article as an excuse.

[compassvale 0]

The result of readily available personal credit, interest free installment plans and credit card, available to all income brackets.

They will be doing ok as long as they are earning a stable income each month and able to pay the installments off. What happens when they lose jobs (touch wood) under circumstances which are beyond their control (e.g. bear stearns saga)? Sigh

[LadyLuck 0]

lack of knowledge, or physio by banks or agent lor.

[ahjane 2]

some people may wan to have more, own more, own better as compared to their peers. But there are just too many things to compare and will never end. Jus hope everyone live within your means and comfortably.

Recently i am renovating my 2 toilets, and merely plastering my masterbed room, hacking the wardrobe, window grill (no use for grill and dun like to clean it), paint the MBR and fix some powerpoint and lighting points. The total cost incl the toilet faucets and accessories and lighting for the MDR + toilet already 13k.

Everyone ask why i dun reno the whole house, presuming i can get reno loan since both of us are working.

I told them i dun wan a life with huge debts to pay.

Luckily i dun own car and kids. if not, i will forgo my coach bags and hols. Without them, i will be miserable.

[applefreak 1]

only one word - IRRESPONSIBLE

[MaCe 3]

some people may wan to have more, own more, own better as compared to their peers. But there are just too many things to compare and will never end. Jus hope everyone live within your means and comfortably.

Recently i am renovating my 2 toilets, and merely plastering my masterbed room, hacking the wardrobe, window grill (no use for grill and dun like to clean it), paint the MBR and fix some powerpoint and lighting points. The total cost incl the toilet faucets and accessories and lighting for the MDR + toilet already 13k.

Everyone ask why i dun reno the whole house, presuming i can get reno loan since both of us are working.

I told them i dun wan a life with huge debts to pay.

Luckily i dun own car and kids. if not, i will forgo my coach bags and hols. Without them, i will be miserable.

i even skipped my toilets(didnt do)

[ahjane 2]

i even skipped my toilets(didnt do)

cant leh..mine is a 20years original HDB toilet (resale). I bought and stayed since Year 2000 and never reno, only change toilet bowl and basin. Only one toilet has shower facilities. Only now then reno cos the toilet tiles are white and light light blue, very very easy stained and dirty. Very eyesore.

[raincole 0]

Dunno why govt should help them, they are not the people who are really in need of govt financial aid.

If u overbudget for a house, worst case is to downgrade. If u buy on hire purchase and cannot pay, let the company take back the TV lor.

[gohkm 1]

Just my 2 cents worth of view.....

for me i save by keeping my renovation cost low........my reno cost only 20k for my 5 rooms flat.......include all floor tiles(toilet included), metal window grills, house painting, kitchen done etc etc.....cos i met a nice reno uncle... and also my concept is to have a spacious house rather than a well decorated house.....when i see newspaper it say that reno cost for 5 rooms is 80k to 100k......i am thinking.....too high......but it maybe high to me but shillings to many super rich.......so is subjective....

i save by buying those NTUC made products at NTUC........not buy those import product......i feel those NTUC brand products are cheaper.

I also save by not owning a car but i have BMW instead......bus MRT walk..........i take bus to work and encourage my wife to do so........i remember last time i walk with my wife in the rain to take bus.....my friend drive pass me and joke with me the next day.......he say he saw me and wife walk in the rain look so pitiful.....i just laugh it off..........what to do..........at least i owe nobody anything......

actually i feel a person take taxi 10 times a month is ok...........but i usually take less than that.......if the place really super ulu.......i usually take MRT to its nearest MRT station then take a cab there.......

i also exercise at the school i work in. I swim on my school swimming pool and jog in its stadium....i dont like to pay to exercise......i dont like to pay for entrance into gym or swimming pool....to me, exercise should be a right and should be a free thing.....

Just my personal view

Rgds, James

Edited March 24, 2008 by gohkm

[Cantona7 0]

Me feel so ashame after reading all these comment.

My HTS (incld TV) cost ard $10k and even take loan to reno my hse.

Now still thinking whether shld I get a car.

Can feel I am slowly suck into the Lust curse.

[applefreak 1]

if you have done planning and know how to handle the installments in case you lost your job, there's nothing to be ashamed of

me took a loan to 'buy' my flat too, coz i believe i should have the earning power to clear my housing loan in due time

to me it's simply this

what lengths are you willing to go to clear your debts?

or will you just sit down and expect handouts from the government?

there's no right or wrong lifestyle

it's a matter of choice how you live your life

[gohkm 1]

if you have done planning and know how to handle the installments in case you lost your job, there's nothing to be ashamed of

me took a loan to 'buy' my flat too, coz i believe i should have the earning power to clear my housing loan in due time

to me it's simply this

what lengths are you willing to go to clear your debts?

or will you just sit down and expect handouts from the government?

there's no right or wrong lifestyle

it's a matter of choice how you live your life

what applefreak says is very correct.........theres no right or wrong..........it depends on what your needs is...

for me.........though my wife and i are working.........but i save and invest alot rather than enjoy cos i got a very poor childhood....when i am young my family is so poor that we have no money to pay electrical bill...i remember my family always quarrel over that.........and so poor that when even my neighbour lose their shoes, they will say we are ones who stole it........

my personal goal in life is not to enjoy in life.......but to be secure in life.........i want to have 2 house before i semi retire at 40 years old........so that no matter what happen, my house will always have water, power and gas and we wont be hungry ....i am striving hard on it.........dragging my wife along.....sometimes i feel i let her down...........

the choice is yours and theres no right or wrong........

just my 2 cents of view...

[ahjane 2]

We are not comfortable with having a big reno load. hence i choose to do stage by stage over long period of time. So we feel comfortable and not under huge pressure of not meeting payments. We try not over purchase, only allow ourself to buy something (say 3k TV) when a instalment for one item (2k sofa and 1k cabinet) has been paid up.

We did not aircon the whole house cos there is only two of us. My mentality if you have it, you will use it. If dun have it, no use it loh. Fan is just good enuff.

I also agree with apple that there is no right or wrong cos you are spending your own money and entitled to spend it your own way.

Edited March 25, 2008 by ahjane

[MaCe 3]

there is right and wrong lifestyles.

right as in being independent and plan expenses cautiously.

wrong as in BUYing whatever loan/credit card can secure and WAIT for family members/friends/gov to bail out. knowingly that their income cant never sustain the amount. ; I have peeped on a lady's app form who is queueing in front of me back then> combined income 3k+, guess what they are buying? 360K prime area 4room!!

even in the case of buying a hdb flat by commiting 100% of their current mthly OA contribution for the loan or worse CASH TOP UPs - how many out there actually did think of WHAT IF losing their job at 40 yrs old? or being jobless for mths?

and if the gov bails them out - where the money comes from? from taxpayers!!! thats wrong!

Edited March 25, 2008 by MaCe