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Debts like all Money Problems often Start from these 3 Reasons

Crazy credit card debt sufferers are most of the time like people who put on a lot of weight.

Why is that so?

We would always like to think that money is independent to other things in life.  

If a person spends frivolously it is because the person is not financially literate.

The person doesn’t know how to save. The person spend too much!

Touch your heart and think how many of your friends and family who suffer from money problems have never learn to save money, save for rainy day and don’t spend too much.

I’m going to show you that the usual starting point has got less to do with financial literacy than 3 things:

  • Awareness
  • Having too much time on their hands
  • Limited Willpower and Decision Making Power

And how we are going to tackle these problems better.


People usually know for a certain area of life, what they should do and should not do.

You know eating too much excess is going to be a problem. If you eat too little its also bad enough so adjust and eat enough.

You know that if you do not patch your computers, watch where which website that you surf, your computer will be less compromised.

If you save enough, watch your spending, you will do ok. (If you look at my Wealthy formula, its not much different from this really)

Why we failed, is because we do not have a birdseye view of what we are doing, when we go overboard, we do not pull ourselves back enough.

Having too much time on your hands

This one may be subjective but I will state my case, at least for common problems like unexpected weight gains and debts.

If you are a workaholic, you probably have only time to eat, sleep, work, family. You probably do not have enough free time for anything else.

What If you are a junior staff who just  graduated. You have less scope of responsibility and have more slack time. You have more time to meet friends, go for dinners at restaurants, more time to browse online retail shops.

If you have gotten yourself in a managerial position and are competent, you may have more free time on your  hands. You can do what the junior staff do, except the problem is you have more money to spend.

When you have a lot of slack time, and you don’t spend it with family, or want a lot of me time, you need to find things to do. This includes eating, meeting folks to drink. In the unfortunate case, you go to gambling clubs.

Excessive time leads to excessive lifestyle and that most of the time results in money problems, health problems and in worse cases addiction with addiction to a decadent life that you think is right being the most dangerous.

Limited Willpower and Decision Making Power

Whenever you tried to help someone who gets into money, health or addiction problems, you tell them they need to have stronger willpower.

Willpower is not an abundant resource that you can increase and not have it deplete.

The more decisions you make the more will power we sap.

You will also notice that for people who make big decisions at work, after a long day, some of the things that requires your attention, you may let them slip by, you passively approve them instead of scrutinizing and thinking about them more.

You make the tough choices at work, but come the end of the day, where to eat, you don’t want to make that decision any more!

The more strain you become at work, the faster your willpower depletes and you can make lesser well thought out decisions.

Hence you let yourself go when it comes to shopping online, or in shops, what you order at gatherings, how do you split the bills.

You make easy justifications that after putting in so much work, you deserve to spend to make up for it.

Learning from the Credit Card Debt Case Studies

The New Paper recently have more case studies from the Credit Bureau Singapore.  There are 3 case studies so let us get through them to see if we can find traces how these money problems got out of hand.

Mr Toh

Mr Toh owed in total $103,000 to the banks. He was earning a good salary of $7,500/mth which many of my peers will be very envious about.

The 39-year-old, who now works as a sales officer and part-time taxi driver, was a regional sales manager in 2005 and frequently travelled. He carried several credit cards to cover his travelling expenses, which his employers reimbursed the following month.

Despite the reimbursement, he’d pay only the monthly minimum sum of $2,500 for his five credit cards for about three years.

He wanted to give his family a better life, and that with credit cards he can pay back the following month. What happen was that he lost track of how much he was spending and how much he could claim. This includes paying $1000/mth for parents medical cost and bringing his family of 7 for weekly entertainment and value added meals which can come up to $300/night.

He quit his job to become a sales officer and taxi driver earning $3500/mth but that amount couldn’t cover the $2,500 minimum payment.

As harsh as I may make it sound, having time for family is important, however, when paired together with a lack of awareness how much they are exactly spending and which category it belongs to, it becomes a potent poison.

In a past write up, I relate how folks find it a chore to budget, and come up with excuses so as they do not have to do it. And I said, you do not need to budget, provided you have great awareness of how your money flows.

According to cases like these, how many of you guys and gals really have good awareness that you have the license not to budget?

Mr Nor

Mr Nor, 57 earns $2,000/mth as an administrative assistant and $1,000/mth as a part time driver. He frequently uses the credit card to shop in Malaysia and Indonesia. He also likes the convenient nature of credit cards in paying first without using cash that he use credit cards for everything.

When he lost his part time job, he incurred a debt of  $60,000 and no matter how he tried paying the minimum sum of $2,000/mth, it still remains as large.

I would have thought having 2 jobs will keep him well occupied but perhaps the period where he can truly de-stress ends up to be a time to  be poisoned by the credit card devil.

When you owe money, your future self have to somehow find money to pay for it. If your future self earns more than current self, it usually is a better situation. Both these situation starts unraveling when the future self earns LESS.

We do not have all the information, but it seems Mr Nor is not very well educated on the dangers of credit card debt and interest expense. This is a justification of financial literacy.

Still, you got to have enough free time to be able to go on frequent trips to the 2 countries. Everyone enjoys the convenience of credit cards, the problem is that Mr Nor lacks the awareness that what he spend on is more than his income, and that his future self needs to bail him out time and time again.

Mr Lee

Mr Lee, 44 is a regional product manager rack up $550,000 in debt from gambling.

At first it was to bring foreign visitors for entertainment purpose but later, bored after work, he decide to bet for fun. However his bet became bigger and bigger and somewhat he couldn’t stop, even as he was paying the minimum sum, he was still gambling.

At a certain point, you know you are out of control. Financial literacy or not, big amounts of debt should tell you that you are in over your head on this.

It is difficult to have the discipline to stop and seek solutions. The easier way is to delay making any decisions, hoping things will work out.

Mr Lee got himself hooked on gambling but only because of a lack of meaningful activities after work.

When attention is not put to good use, or not managed properly, problems tend to occur.

Some Solutions

If financial literacy is not the solution, then how do we tackle this problem. From the figures provided in the article things are getting worse.

101k of people are paying less than minimum sum or not paying in 2015 compared to 73k in 2011. 566k of people are only covering minimum sum, up from 510k.

These amount mean nothing much but if put into the context that in 2015, there are 1.6 mil credit card holders in Singapore.

Its like 35% of credit card holders are only paying minimum sum!

Find something meaningful to do with your free time

Much of the problems with people in addiction, money issues or a life of decadence is that they have a void that they need to fill.

The problem here is the void and the solution is to fill the void with meaningful things.

This can be spending time with family, good friends or to have great side projects that have a good objective so that you can spend your time tinkering with it.

If you have family or relationship problems, its time to find the right solutions for them, instead of finding the wrong way to fill this void.

Alcoholics Anonymous was rather successful because they sought to solve drinking problems with solutions.

The first one is applicable here, which is that a large number of folks started drinking because of loneliness, so the group creates an avenue to fill that loneliness void.

Rely on a good System / Process / Habit instead of Willpower

The second solution is that they attempt to replace alcohol with coffee. And they drink a lot of it.

Rather than rely on discipline and willpower which will deplete from time to time, what they sought to do is to shift the person’s processes by replacing the action with something less harmful.

So instead of surfing an online boutique, find something that you will enjoy as well, but not in the context of shopping.

Instead of eating with your normal plate, use a smaller plate so that it “looks” to be filled much more easily, so that you will eat less. Drink water to start the eating process so that you are somewhat full, so that when you think of what to buy for lunch, your stomach will not urge you to buy a larger size meal.

Create awareness in what you eat, how you spend money, what you do with your time

If you lack awareness in what is important to you, then you need to increase that awareness.

Carrying out budgeting is one way of being more aware. When you write down where your money is going, it creates a certain level of consciousness. If you are not sure how much you are eating, the same tracking will help.

With the awareness, you become conscious you have a problem. And then we can go back to tuning the processes so that things do not get out of control.


Debts, health and lifestyle problems do not always get solved 100% by implementing better awareness, building better habits and living a more meaningful life. However, striving to get further along the path will move you towards a better life and away from these problems.

While literacy in these subjects are important, we are a victim of problems that usually are not associated with the problems themselves.

If we sought to steer away from these deeper issues, these debt, health and lifestyle problems might not have such a firm hold on ourselves.

It is why a lot of the times, solutions to these problems is related to having a deeper connection your religion.

The void in their lives are filled, they gain a direction in how they occupy their time and have someone to talk about their problems.

You can read more of the case studies at the new paper here.

How do you see your friends and family overcome these tough health and money problems?



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