You will write a one-page plan that names your next step and who to contact.
After his first counselling session, Kumar went home with a lot of information and a feeling that he should do something. A week later he had done nothing. The information was all there. What was missing was a decision written down, with dates, that he could follow on a bad day without having to think it through again.
This exercise produces that: a one-page debt rescue plan. It takes about 25 minutes, and it pulls together the work from this module and module 6. The worked example follows Kumar, with his figures made up for the example.
Put two things in front of you. The first is your debt page from lesson 6.1, Put every debt on one page, with each debt's balance, rate and minimum, your total minimums and your extra repayment money. The second is your check against the warning signs from lesson 7.1, Signs your debt has moved past a budgeting fix.
At the top of your plan, write a short summary of each in a sentence or two. Kumar wrote: "I owe S$30,000 on two cards and a credit line. My minimums are about S$915 a month, about 20% of my take-home pay, and most of that is interest. Two warning signs apply: I used a cash advance to pay a card, and I have been ignoring calls from one bank."
There are three main paths, and which one fits depends on the summary you just wrote.
The first is to manage it yourself, with the avalanche or snowball from module 6. This fits when you have real extra repayment money after essentials and minimums, none of the warning signs apply, and you trust yourself to keep going. Your choice between the two methods is the one you made in lesson 6.4, Run avalanche and snowball on a worked example.
The second is a Debt Consolidation Plan, from lesson 7.2. This fits when most of your debt is cards and credit lines at high rates, you meet the current eligibility criteria, and you can afford one fixed instalment that clears the debt over the term.
The third is credit counselling, from lesson 7.3, When to call a credit counsellor, and what they can do. This fits when warning signs apply, when you are missing payments, when you do not qualify for a consolidation plan, or when you are not sure which path fits. Choosing counselling is not a sign of failure. It is the path that keeps the most options open.
Write the path you have chosen, and one sentence on why. Kumar chose counselling, with a view to a Debt Management Programme: "I don't qualify for a DCP now, two warning signs apply, and my minimums leave no extra money."
A plan without dates is a wish. Write the first three things you will do, each with a specific date in the next two weeks. Make them small and concrete: a phone call, a booking, a document found.
Kumar's three were these. By Friday, call the bank whose calls he had been ignoring, tell them he is seeking credit counselling, and ask what they need from him. By next Tuesday, book his follow-up session at CCS and confirm which documents to bring. By the following Saturday, finish the folder from lesson 7.3 with every statement, his payslips, his notice of assessment and a month of spending.
If you chose to manage the debt yourself, your actions might be setting up a standing instruction for your extra payment, switching every account to automatic minimum payments so nothing is missed, and putting your progress chart somewhere you will see it monthly.
Every path in this course fails the same way: new debt builds up behind the old while you repay. So write down the rules you will follow until the plan is done. Keep them short enough to remember and specific enough to check.
Kumar wrote four: no new credit cards or credit lines; no new BNPL or instalment plans; cards removed from his phone wallet and online shopping accounts; and any windfall, such as a bonus or a tax refund, split between his emergency fund and the debt. Your rules can be different. What matters is that each one closes a door you have used before.
A finished plan fits on one page. It has your situation in two or three sentences, the path you chose and why, three actions with dates in the next two weeks, and the rules you will follow while repaying. Kumar printed his and stuck it inside a kitchen cabinet door, where he would see it every morning.
He also put his Friday call to the bank into his phone calendar, with a reminder the evening before. The plan was only real to him once the first step had a time attached.
Complete the one-page debt rescue plan and put the first action in your calendar this week.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).