How to get out of Personal Loan & Credit Card Debts

Malaysian Struggling with DebtHere is a case study I would like to share after reading this post (below) – continuation on my earlier post (How to avoid getting into blacklisted and bankrupt). Sorry, have been busy preparing this case study for sharing.

Im sharing this so that I can help more people like Ian (not his real name) to be financially educated & really be a financial practitioner. It is a lot easier than you think & you can have more fun in life.

I met Ian when I went back to serve as a coach in one of the property investment course I previously attended. He was introduced to me by a famous Property Guru, who said that I needed to help him.

Our first meeting at Old Town Coffee at Kuchai Lama over lunch, Ian shared with me that he was working as a Graphic Designer & has been working for more than 10 years but find it very hard to have any savings. I see him as someone who has a dream , an ambition because he told me people around him, colleagues, friends and even relatives have already have their own family and owned few properties on their hand and he is still single and haven’t bought his first property nor started any investment

This was his situation

  1. Credit card debts, personal loans & Car Loan close to RM 66,000
  2. Negative cashflow of RM 1,767 (Outflow more than monthly salary)
  3. Earns RM 5000/month

To be honest I thought he was in a situation far more serious. But by applying the ICE JAR concept (a simple cash flow management method) & a simple debt restructuring formula,

Now he has

  1. Savings of RM 1650/month (Savings put aside from his monthly salary)
  2. Save on interest rate of 7-9% averagely for his credit card debts & personal loans
  3. Bought his first property of RM 200K & subsequently another RM 900K with his team
  4. Avoid being ‘EARMARKED’ by not going to AKPK else he wouldn’t be able to buy property. (I don’t have anything against AKPK, as they genuinely help people restructure their debts, they need to you to fully pay off your debts before taking  more new debts & prevent you from opening new banking account)


ICE JAR concept

What is the ICE JAR concept. ICE stands for

Investment/Savings – how much you need to save on a monthly basis (pay yourself first). Amount you need to put aside for liquidity & future investment

Commitment – how much you can commit to long term loans or expenditure like car loan, housing loans, personal loans & etc

Expenses – how much you should spend on a monthly basis. For all your groceries to food , from handphone bills to hobby & entertainments.

So for Ian this is how much he can spend , save & commit, base on a salary of RM 5000/month by dividing equally into 3 accounts (RM5000/3)

With this guideline, he can restructure his repayment according to the affordable level (ICE) above (RM 1666.67/month for all his commitments).  He needs to consolidate all his 5 loans (average about 12.5%) into 1 loan with a lower interest rate (6%) & longer repayment period as per table below.


Mri B4 Summary

Mri After Summary

So with his new commitment of RM 1718/month, which is RM 51.33 slightly more per month which he can take it from his Expenses Account, this concept will only work with the condition that Ian actively invest his RM 1666.67/month from his Investment Account and maintain his current lifestyle of RM 1666.66/month expenditure on his Expenses Account

So with a simple tweak Ian can unlock himself from his financial situation & pursue his dream of being financially free.  To learn how to use ICE JAR, pls download here.

Ian,  as an easy going and easy to ‘trust people kind of guy’,  led him to this situation & also the same traits that led him out of this situation. What I mean is that he trusts that what ever MLM products recommended to him is good & he will buy. Because he doesn’t have a money guide, he doesn’t know how much to spend & save. So he spent all his income. After going through this consultation, he is aware of his financial position.


For those who want to join us for a guided financial education session, do sign up below. I will keep you inform when the next session is.

For those wanting a 1 to 1 session, you can contact me.

To download ICE Jar app, click here