You will produce a single list of every BNPL and card instalment plan with the amounts and dates due.
Ask most people how much they owe on BNPL and they will give you a number, quickly and with confidence. Then ask them to open every app and add it up, and the number usually changes. A plan from six months ago is still running. A card instalment they forgot was an instalment shows up on the statement. The guess was a guess.
This exercise replaces the guess with a list, and most of its 20 minutes or so goes on opening apps. The worked example follows Ryan from lessons 4.1 to 4.3, with figures made up for the example.
Start with every BNPL app on your phone, even the ones you have not opened in months. Then go to your credit card statements and banking app. Card instalment plans live there, and so do purchases you converted into instalments after you made them. Search your email for words such as "instalment", "payment schedule" and "pay later", which turns up plans from apps you have deleted.
Ryan found four plans. Three were the ones he expected: the shoes, the phone and the concert tickets. The fourth was the laptop on his card's instalment plan, which he had never thought of as BNPL because his bank ran it. It goes on the list too, since for your audit a plan is anything that splits a purchase into scheduled payments, whoever runs it.
For every plan, write one row with these details:
the merchant and what you bought the provider or bank running the plan the total price the amount paid so far the amount left to pay the next due date and the instalment amount the late fee stated in the provider's terms
Ryan's rows looked like this, with example figures. The shoes: S$480 total, S$160 paid, S$320 left, two instalments of S$160 still due. The phone: S$900 total, S$300 paid, S$600 left, four instalments of S$150. The concert tickets: S$240 total, S$80 paid, S$160 left, two of S$80. The laptop: S$1,200 total, S$300 paid, S$900 left, nine of S$100.
Add up the amount left on every plan. Ryan's total was S$320 plus S$600 plus S$160 plus S$900, which is S$1,980. He would have guessed about half that. Like a card balance, this is money he has already spent and still owes, as lesson 4.3, Why several small plans become one big problem, put it.
Finding the late fee often takes the longest, because it sits in the terms rather than the app's main screen, but it is worth the search. If you ever have a tight month, you need to know which missed payment costs the most.
Now add a column for each of the next three months and fill in what each plan takes in that month. When a plan ends, its column goes to zero.
For Ryan, month one takes all four instalments: S$160, S$150, S$80 and S$100, which is S$490. Month two is the same, S$490, because the shoes and concert tickets each have one instalment left. In month three the shoes and tickets have finished, so only the phone and laptop remain: S$150 plus S$100, which is S$250.
Those three totals are what you compare with your spending money. Ryan's is about S$900 a month, so the first two months are over half committed, and the third is just over a quarter. The pressure eases in month three, but only if he adds nothing new before then.
Late fees are the main cost of BNPL to you, and the dates are now in front of you. For every plan, set up automatic payment from an account that will hold enough on the due date, or put a reminder in your calendar a few days before each one. If an app lets you pay from a card, remember that paying an instalment from a card balance you then carry turns an interest-free plan into card debt.
Then decide your cap. Lesson 4.3 suggested a fixed limit on total monthly instalments across every app and card. Ryan set his at S$150. His current plans take him over that for the next three months, so his rule for now is simple: no new plans until the monthly total falls below S$150, which on his schedule happens once the phone is paid off in month four.
A finished audit sheet has one row for every active plan, BNPL and bank, with the provider, total, paid, left, next due date, instalment and late fee. It shows the total left across all plans and the amount due in each of the next three months. Every plan has automatic payment or a reminder set. And at the bottom, in your own words, is your cap on total monthly instalments from now on, a number you will check before the next checkout asks.
Complete the instalment audit sheet and write your monthly cap for total instalments from now on.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).