How I cleared a 5 figure debt in just 7 months

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As I was growing up, I’ve heard tons of horror stories of people falling into debt due to all kinds of reasons. More often than not, debt led to more problems and in the more serious cases, devastating consequences such as the breakdown of marriages and resulting in homelessness. I was determined not end up in a similar fate.

These stories contributed to my adoption of a more prudent approach towards my finances from a relatively young age, albeit it was driven out of fear of the alternative. As a single, young professional in her mid 20s, the only debt I had undertaken thus far was the loan for my tertiary education in a local university.

With a 5 figure study loan debt on my shoulders, I felt chained. I felt a sense of urgency to purchase my freedom (ie pay off my debt) as soon as possible. A week after my graduation ceremony at a local university, I count myself  lucky to begin full-time employment and consequently, get on track with paying off my debt. With only one source of income, my only way to pay off my debt is via savings. I managed to clear my 5 figure study loan 7 months into my first job, and was still able to afford to bring my family for a holiday trip to Hong Kong afterwards. Yay!

There are many ways to manage your finances well and my way is only one way to do it. Here’s how I deal with my finances:

1) Save first before spending

We all know saving money is important but why is it so hard to do it? One word: Discipline. It takes a LOT of discipline to save consistently. It helps if you have goals that you are driven to achieve. I know a lot more people who spend their money first before thinking about saving than vice versa. We tend to spend according to the budget we know we have. So it is often the case that, despite the best of intentions, people who spend first then save later, save lesser than planned or are unable to save at all. We also don’t want to keep counting our budget before we make every single purchase, right? So save yourself some trouble and do the hard part first. Save a fixed amount each month (or more in those months when you get bonuses!) first before you spend on anything. For me, I save 50% of my take-home pay. Especially if you’re new to saving, it will be hard but rest assured that within a few months, you will get used to spending on your revised budget, plus a steady stream of savings to boot!

2) Separate your savings from your expenditure

I talked about discipline earlier. No one is disciplined ALL the time. Hence, I felt that it would be beneficial if I created some form of structure to maintain discipline so that I would maintain my habit of savings even when my discipline slips. A few days after I got my first pay, I opened another bank account in a different bank for the sole purpose of holding my savings. Why? I thought that it would be too risky to have my savings and expenditure budget in the same account.

The fine boundary line between the two could be crossed easily and the temptation to do that would always be there. Personally, I thought that having a savings account in another bank would make it more difficult to access your savings, should the temptation arise to access them for spending. Having a separate account for your savings help to reinforce a clear dichotomy between savings and expenditure. The key is to have the mindset that your savings are ‘untouchables’, unless in a life or death scenario (and no, having that latest iPhone model is not a life or death scenario!).

3) Differentiate your needs from your wants

I know of a loved one whom, with all due respect, I fondly refer to as the ‘2 weeks rich, 2 weeks poor’ girl. She would shop at brands that I thought would be too expensive for her to afford, knowing her monthly salary, only to be totally broke in the last 2 weeks of the month. Her erratic spending habits caused her unnecessary stress and took a toll on her health as she deprived herself of having proper meals in the latter half of the month. It would be more difficult for her to sustain such spending habits in future when she have dependents relying on her. This cycle continues to repeat itself as she fails to differentiate her needs from her wants. Some questions that I ask myself when differentiating between a need and a want are:

  1. Do I already have something that is able to fulfil the product’s purpose?
  2. Am I able to borrow the product from someone who already has it?
  3. How many times am I realistically going to use this product?
  4. How would I feel about this purchase 1 week from today? 1 month from today? How about a year from today?


These questions saved me from a lot of impulse purchases, which would yield me little happiness. I’m not saying that you cannot buy anything nice for yourself. That’s not true. Identify your wants and be selective on the want of your choice. It is about stretching your dollar for maximum happiness.

4) Research before you buy 


I feel that comparing prices is somewhat of a Singaporean past time. I’m confident that you will know at least one person (or you’re one yourself!) who can instantly convert from Malaysian ringgit to Singapore dollar to quickly check if an item is a worthy purchase when shopping in Malaysia. Comparing prices is especially important for big purchases as there are opportunities for larger cost savings.


When I wanted to buy my first branded bag (yes, I have wants too!), I surveyed for prices both in stores and online. The price was a little too steep for my budget even for the ones online. But I really liked the bag and I was confident that I would use it regularly. After much research, I ended up buying a gently used bag on Carousell at half the price a brand new one costs.

I felt very satisfied with my purchase of a very well-kept bag that is practically brand new except for a very minor defect on the inside. I have ‘the bag of my dreams’ plus almost $300 worth of savings from a smart purchase. It pays to research and evaluate as many options as you can so that you can get the best possible deal.

5) Invest in yourself


Just as how every young start-up require extensive investments in terms of money, effort, and time, to grow, so do you as a young adult. Be it career, religious or even interest-related, go for classes/courses/workshops and learn from the experts. As a Muslim, I don’t mind paying for religious classes as I consider them investments for my Hereafter.

As young professionals, we’ll realize that our learning does not stop just because we ended school. The key is to think long-term. We’re only at the beginning of our careers so it is a time to ensure that we equip ourselves with and hone the relevant skills and knowledge. Learn as much as you can while you’re young and with lesser commitments.

Count yourself lucky if you manage to snag a mentor whom you admire and would like to emulate.  It is said that a mentor is essential if you want  to achieve your highest potential. Whatever it is that rocks your boat, ask yourself if you older self would  thank your younger self for having invested in such and such. Sometimes thinking backwards helps 😉

6) Filial piety and the Law of Attraction

Having grown  up in a family steeped in traditional values, the concept of filial piety has an influence on my financial management. To me, being able to give my parents money is somewhat of a rite of passage, a declaration of independence, a way of thanking them for having cared for me from young till today. I try to give them as generously as I can as I believe that obtaining their blessings is important for continued prosperity.



Another concept which I hold dearly to is the law of attraction. The concept is simple — the more you give, the more you get. Help those in need and in turn you will be helped when you need it. What comes around, goes around.


That’s pretty much how I manage my finances currently. It’s quite basic for now and eventually I’d like to consider delving into investments to grow my money in the long run. In the mean time, I hope you’ve benefited from the tips I’ve shared.


All the best in managing your finances!

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