Write a one-page plan that sets out your next step and who you will contact.
Knowing your balances and your options is not enough on its own. You also need a written decision with dates, on one page, that you can follow on a bad day without working everything out again. The exercise takes about 25 minutes and builds on the work you did in module 6 and earlier in module 7.
Kumar left his first credit counselling session with plenty of information and a sense that he should act. A week later he still hadn't done anything. He knew a lot about his debt, but he had no dated decision on paper.
A debt rescue plan is one page holding four things: a summary of where you stand, the repayment path you have chosen and the reason for it, three small actions dated within the next two weeks, and the rules you will keep while you repay. If it runs onto a second page, cut it down until it fits on one.
Start by gathering two pieces of earlier work. The first is your debt page from lesson 6.1, "Put every debt on one page", which lists each debt's balance, rate and minimum payment, plus your total minimums and the extra money you have available for repayment. The second is your warning-sign check from lesson 7.1, "Signs your debt has moved past a budgeting fix".
Condense each of those two pieces into one or two sentences and write them at the top of the page. Together they should read as a short summary of your situation, two or three sentences in all.
Kumar's summary says he owes S$30,000 across two cards and a credit line. His minimums are about S$915 a month, which is about 20% of his take-home pay, and most of that money covers interest. Two warning signs apply to him: he took a cash advance to pay off a card, and he has stopped answering calls from one of his banks.
Your summary should point you to one of three main paths.
The first is self-managed repayment, using the avalanche or snowball method from module 6. It suits you if genuine extra money remains for debt after essentials and minimums, no warning sign applies to you, and you believe you will stick with it. Use whichever method you chose in lesson 6.4, "Run avalanche and snowball on a worked example".
The second is a Debt Consolidation Plan (DCP), covered in lesson 7.2. A DCP is a single fixed instalment that pays off high-rate card and credit-line debt over a set term, and it depends on eligibility. It suits you if high-rate cards and credit lines make up most of your debt, you meet the current eligibility criteria, and one fixed instalment that clears everything over the term fits your budget.
The third is credit counselling, covered in lesson 7.3, "When to call a credit counsellor, and what they can do". Choose it if any warning sign applies, if you are already missing payments, if you don't qualify for a DCP, or if you can't tell which path suits you. Choosing credit counselling is not a failure. Of the three paths, it leaves you the widest range of options afterwards.
Write your chosen path on the page with a one-sentence reason. Kumar chose credit counselling, with a Debt Management Programme as his goal. His reason covers three points: he is not currently eligible for a DCP, two warning signs apply to him, and he has nothing extra left after his minimums.
A plan without dates is only a wish, so under your path, list three actions, each with its own date inside the next two weeks. Keep each one small enough to finish in one sitting, such as a phone call, booking an appointment or finding a document.
Kumar's first action, by Friday, is to phone the bank he has been avoiding, explain that he is getting credit counselling, and ask what they need from him. His second, by next Tuesday, is to book his follow-up session at CCS and check which documents to bring. His third, by the following Saturday, is to complete the folder from lesson 7.3: every statement, his payslips, his notice of assessment and one month of spending.
Your actions will look different if you are on another path. On the self-managed path, for example, they might be to set up a standing instruction that pays the extra amount automatically, to put all your accounts on automatic minimum payments so none is missed, and to pin up a progress chart that you look at each month.
Every path in this course fails at the same point: running up new debt while you are paying off the old. The last section of your page is a set of rules against new debt. A good rule is short enough to remember and precise enough that you can tell whether you kept it. Kumar chose four:
No new credit cards or credit lines. No new BNPL or instalment plans. Remove his cards from his phone wallet and online shopping accounts. Split any windfall, such as a bonus or a tax refund, between his emergency fund and the debt.
Your rules don't need to match his. Each one should close a route into debt that you have actually used before, whether that was a cash advance, an instalment plan at checkout or a card saved on a shopping site.
Check that everything still fits on one page. Then put the page somewhere you will see it, and add your first action to your calendar with a reminder. Kumar printed his page and taped it inside a kitchen cabinet door, where he sees it every morning. He put the Friday bank call in his phone calendar with a reminder set for the evening before. Only once that first step had a time attached did the plan feel real to him.
Your plan is finished when it fits on one page and shows your situation in two or three sentences, your chosen path with its reason, three actions dated within the next two weeks, and your rules for the repayment period. Keep it where you will see it, and enter the first action in your calendar with a reminder.
Fill in your one-page debt rescue plan and put the first action in your calendar for this week.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).