Life after graduation: Girl friend and the First Car

Source:http://kclau.com/wealth-management/life-after-graduation/


This is a personal story shared by a reader. Let’s call him Alex.

I graduated in 2000 and get a job at IT Support in an international Australian branch university. The salary of RM1650 (not net pay) was barely enough. My dad so called “help me” to buy a brand new Kancil 850. First month it was free and second month I have to pay for it. All I wanted that time was a 2nd-hand car or I don’t mind at all to use public transport.

If I use public transport, it would take me two buses before I actually reached at home. Office hour finished at 5pm and arrived at home around 7.30pm. The place was like the end of Miri Town (about 45min from town).

The monthly instalment was RM587 for 5 years. Plus fuel consumption would cost me around RM250/RM300. I filled RM30/RM40 tank and can use it for 4days before refuelling again. Owning a car has teach me how to DIY almost all the basic car maintenance from changing Engine Oil to changing Air Filter. I managed to spend around RM1K or RM2K to make the car beautiful (ICE and body-kits). My determination to get a Japanese rim was too strong that I saved RM300 every month to get it. At last I ordered a 2nd hand Japanese rim for RM1800 complete with tires. I even skip my lunch for few times in a month and even “tapau” food (packed food) from home.

At the same time I was paying credits card that I don’t use. Why?? My GF used it for her NOKIA 6680. I pay for it for the name of love. My mistake!! It accumulated to RM3.8K because my GF never pay the minimum amount required. Luckily she got her scholarship to pay for it but again my useless money handling took over. I never fully settled it and only pay half of the total amount. And I keep using it for online purchase such as plane tickets and so on.

I occasionally paid my “PTPTipu” study loan. Sometimes RM200, sometimes RM50 and most of the time none! And I never received any letter or payment acknowledgment from PTPTN that time. I assumed they had lost the students’ list names.

One thing I did right was to pay myself first (RM300/RM200) once I received my salary.

Notes from KCLau:

As normal young graduates, getting a car had become more of a necessity if you are living in Malaysia. Public transport is available but it is many times more troublesome if you had to travel quite a distance to your work place.

I do agree with most people that car as a necessity, we as Malaysians are forced to spend a big chunk of our income on owing a car that makes it seems like a luxury item.

For the case of Alex above, he had to spend RM900 out of RM1650, which is more than 50% of his gross pay. This is without considering the extra he spent on beautifying his Kancil with accessories. The sad news is that Kancil is like the smallest car and also the cheapest new car one can get in Malaysia. Some foreigner said that it looks more like a toy car, which we can’t deny about it.

Since you can’t do much to change the car price, what you can do is to reduce the spending on cars based on the budget you can afford.

What do you think about this story? What does it remind you of? What do you think Alex can do to improve his financial standing? Write something in the comment section below.

Here is the Part II of Alex’s story:

I left the company after 3 years plus to join new IT company to implement new project in Sarawak. The basic pay was actually smaller from previous one but i get do OT regularly due to project implementations. That include on call duty at night and weekend. I also entitled to claim milleage to do site visit and maintenances. Roughly i earned about RM2600-RM2800 per month. I still continued to pay my car installments(5 years loan tenure) but i hardly spent money on car modification anymore. I saved a lot on fuel consumption because the office is nearer to my house and milleage claims.

I finally settled my credit card installment about a year after i joined the company. The card actually expired but i didnt bother to renew it. Then i started to pay my study loan regularly. Instead of paying minimum of RM192, i paid RM200. I dont changed my handphone to latest one in the market. Instead i repaired my own handphone;updating firmware and hard reset. I used it untill it died or cost of repair more expensive than the phone itself.

Instead of buying expensive phone, i look for “ordinary” CSL handphone. It served me well untill i forgot to take it out when i am doing my laundry. I rushed to buy RM110 Nokia phone when it happen. I promised myself to upgrade later when the time is right.

Fast forward my story, i changed another job to an International company almost two years after that. I thanked GOD for HIS blessings. Then i started to buy and read financial planning books. It was KC LAU’s book(cant remember the name though) then followed by others.

Early this year, i bought a landed property RM230K(property in Miri is expensive compare to other place in Sarawak). My 850 kancil still with me minus the installments. I am still living with my dad(my mum passed away last year) ,brother and little sister. I planned to rent out my house when it completed next year and keep staying with my dad. Our family house is double storey terrace house.

I already bought an investment linked insusrance for myself. On top of it i also used my EPF account 2 to buy some unit trusts. I was lucky to have cousin working with bank industry. Now i am trying to save 50% of my salary every month instead of 10%.

My principle is easy “if you cant afford to buy things cash, you cant afford to buy that thing at all”. Example, i saved some money for two months to buy my FIRST laptop(RM2K), though i am IT guy i never owned a laptop. My advise is buy AMD based laptop instead of INTEL. It will save you around 20% of the price.

Recently i purchased a second hand DSLR to pursuit my interest in photography. I owned a Canon EOS 350(film) when i was in university but i have to sell it because i cant afford to pay for the films(i shoot a lot but only handful of photos useable). I hope my photography skills will help me to pay for some bills later.

The best is to get a good cheap second hand DLSR and try it. If you dont like it, you can always sell it. Instead of buying an expensive DSLR but later you found out that you prefer “auto” settings or compact digital camera. Some good place to look for cheap second hand DSLR are lowyat.net and free trade zone photograph