Johnny (may or may not be his real name) worked in a local bank when he graduated from university, and admitted that he had a few job offers even before he graduated. His starting pay was relatively high: at more than $4,500, he earned more than his peers and was set for a debt-free life.
In the first few months of his work, he had some sort of “culture shock”: when he was schooling, he gave private tuition and was earning about $600 a month. All of a sudden, that ballooned to $3,600 (after his CPF deduction)—that’s way too much for him to handle all of a sudden!
He applied for almost all the credit cards that promoters in MRT stations offered to him—one by one, he received tens of credit cards and was feeling “rich” from the credit limit given to him. In fact, he thought he had become “$100,000 richer” simply because everyone was so willing to loan him money.
But the trouble didn’t start from those plastic cards. It started when he decided to buy a car.
During that time, it was still possible to buy a car with $0—all they needed was his payslip and ta-da: he could walk away with a brand new car, having only to fulfil the monthly instalment. But here’s the thing: the monthly instalment must be fulfilled, because failing which, he would lose a reasonable amount of money.
Johnny got a BMW (he didn’t specify which model) and paid $1,000++ every month for the monthly instalment. All was good (not very, but to him, it was)—with him earning $3,600, he could still survive on a $1,000++ monthly expenses.
But a few years later, he lost his job.
We’re not sure whether he was retrenched or fired, but even when he lost his job, he couldn’t let go of his car. He claimed that the monthly instalment must still be fulfilled, or he’ll lose “tens of thousands of dollars”.
The first thing he did was to find a job—fast. He got one as an executive in a financial institution, but the take-home pay of about $2,000 was just enough to pay for his instalment, petrol and maintenance.
Then he admitted something: he could have let go of his car and pay his debts slowly. But he didn’t want to—because his friends, family members and everyone around him knew him as the successful banker who drove a BMW. He would rather eat instant noodles and bread than to lose his only status symbol that was “keeping him alive”.
It has been a few years now, and with him drawing only $2,000++ and paying $2,000 for his car monthly, his concern now is what would happen next year (2017), when the COE of his car expires. He won’t have enough to renew the COE or buy a new car.
Well, when he posed the question in his email, he replied to it himself: “What were I thinking?’
Seriously…Johnny, all we can say is that you’re not alone, and thank you for sharing your story, because it really showed us that the latest policies about car ownership have helped people and not harm others.
After all, the moral of the story is simple: don’t buy a big hat if you’ve got a small head.