Farah Afifa: AM I GOING BANKRUPT?!

Welcome back to another long overdue post. This was in November 2019 and yes I have been saving this over a year now but it's time to share with everyone hereeeeeee.

For UiTM students, we have Co-curricular activities as subjects. 3 credit hours, 1 per semester. So, 3 semesters in total. Sounds simple and easy isn't it? It would be fun if you chose something fun for yourself and you can enjoy the classes instead of stressing out about it more than your core subjects 😂

For me, I chose something that was fun and I can score easily.

Whatever choices you make makes you. Choose wisely. - Roy T. Bennett

Hence, I chose Financial Management! Personally, it's very simple. It feels like going to finance seminar once every week instead of a class where you need to learn and apply it in your assignments etc. For our final semester (Co-curricular activity), we need to give back to the society. We came up with a collaboration programme with the Entrepreneur Club from USM, Penang. The audience/participants were from first year students in USM.

UiTM- USM CONNECTION DAY
MONEY LIFE HACKS

It relates to our subject Financial Management. Hence, we put our utmost efforts in giving awareness of the importance of managing their finance and consequences of lavish spending especially in enjoying their next few years in the university.

This was a forum discussion. On the left side, a final year student in USM who actually opens up a business in the university that also includes food delivery (giving chances for students who wants to do part time job in the uni). Such a great initiative and the goal is always to help those who are in need.

I remember telling them (the participants) how easy it was for youth to be declared bankrupt in the future. Especially when you start of with having debts right after graduation. What debts? If you took your study loans, you'll automatically be in debt after you finish your studies.

Also at that point of time, a statement came out by the Minister of Finance where a total of 100,610 Malaysians were declared bankrupt, of which 60% were between 18 and 44 years old in between 2013 and 2017 where the bankruptcy threshold from RM50,000. If you have that amount of debt and unable to pay that amount you might be declared bankrupt. In addition to that you must have defaulted in payment for a period of six months and resided in Malaysia for at least one year.

What was the initiative made by the government now?

The government has agreed to raise the minimum bankruptcy threshold from RM50,000 to RM100,000 in the Insolvency Act 1967. In other words, creditors may only file for bankruptcy action against their debtors if the debt owing is more than RM100,000.

Did you know that Section 5 (which is on the minimum bankruptcy limit or minimum bankruptcy threshold) of that Act has been amended four times now?

Since the Act came into force in 1967, the original minimum debt threshold was RM2,000. Since then, the minimum debt threshold has increased to RM10,000 in 1992, RM30,000 in 2003, RM50,000 in 2017 and subsequently RM100,000 in 2020.

Is that enough?

Apparently no. What we need is to increase financial literacy among us.

What is financial literacy?

According to the National Financial Educators Council, financial literacy is the ability to manage financial resources effectively for a lifetime of financial security.

Being a financial illiterate, we will end up making poor financial decisions such as overspending and keeps exceeding the limits of our credit cards.

I have found a great initiative made by students for students 💖

Meet Financial Literacy for Youths (FLY). Do check out their publications especially on personal finance!

Also, get yourself a financial planner guys.

How should financial planner looks like?

If you have read my planner post : SYABAB PLANNER and purchase it, you'll receive a financial planner. So, you're on the right track.

However, we can always take baby steps.

Make your own financial planner by keeping track of your monthly expenses.

Yes, have a notebook specifically for your financial management. Jot down all your expenses either daily, weekly or monthly. Additionally, if you're working or receiving any allowance please jot down in the notebook as well.

How to avoid overspending?

1. Set a budget.

Start by adding up all your sources of income and then tally up all your fixed expenses, such as car payments, rent, debt repayments, etc.
List your variable spending, such as groceries, gas and entertainment, allocating funds to each category based on how much you’ve normally spent in the past.
Then you can adjust on which categories should you spend more or less

2. Choose cash over credit cards

It's so easy to purchase when all you need is to swipe the card or enter a pin number. You'll only get a receipt of how much you spent not how much you have left. For me, I would have cash in my purse and I would only put in of how much I target to spend on that day. If I'm out of cash, I would remind myself to stop spending hehe.

3. Understand what triggers you to spend more.

Why do you have the need to splurge?

Environment?

Do you live next door to a shopping mall and tends to splurge there? I experienced this in 2019 and yes that was exactly my issue 😂

Emotions?

Do you spend your money when you get all stressed out?

Understanding what triggers you can help you avoid overspending.

If we can really understand the problem the answer will come out of it because the answer is not separate from the problem. - Jiddu Krishnamurti

We only spent a day with the USM students but we hope that it benefits them 💖 Here are some photos from that day.

An ice breaking session with the participants

Lunch! We conducted an explore race as well. Theme : Finance

Remember Izyan? Here's Adleen who I felt that she's super similar with Izyan. I wish both of them get to meet each other one day 😉

Here are my amazing classmates for 2 semesters. My lecturer in the middle at the back also hehe! Thank you for not putting much burden on us for this subject.

I am grateful for this outreach programme as it helped me a lot to get along with my classmates better. Throughout our classes, my aim was just going to class and get good grades but this programme brought it to another level.