5. Financial Planning for Dummies like me

Here is a personal insight on the plan I used to lower monthly commitments. I call this whole process ‘financial planning for dummies like me’. Although this post is about financial planning, I emphasize that financial habits and lifestyle changes are the key to making this successful. On my earlier post I’ve shared some basics on how I lowered monthly expenses.

WARNING! : This post includes lots of numbers!

After deciding that I going to continue this journey I panicked because of my debts. So I needed to find ways to stay out of any new debts for at least the next 6 months. The 6 months goal was so I could find new passions I could do to keep afloat. To accomplish this I needed to get my finances on track and

  • Know how much was I in debt
  • Understand my actual commitment.
  • Have a plan to lower my commitment
  • How much money I need for the next 6 months.

How much am I in debt

I am not an accountant, investor nor did I study anything on financial management. I however as you would know from my earlier post was in love with Excel. So all that I did was gather all this information and put them on a spread sheet. After tabulating the debts as below it appeared as though I was half a million in debt.

Not exact numbers

What are my monthly commitments.

Now after knowing my total debts I needed to know how much I needed on a monthly basis to survive. I broke them down by a 2 parts

  • Fixed commitments – Minimum commitments which does not change
  • Variable commitments. – Commitments which changes every month.
Not exact numbers, some values such as building management fees, taxes, etc were missed out on the table

Planning Financial Debts

Now basing on my monthly commitments I need about RM10k a month. Since the genius in me decided to go nuts and try fighting this rat race, I need to find ways to reduce it by half which will allow me to not depend on a 9 to 5 and diversify my focus on things I would enjoy. From my earlier post I managed save up an average of 1k with just some minor adjustments to my lifestyle. Also since I decided to move out to a lower budget house which I already own I adjusted my rental value as well. With just this minor changes, it was a successful reduction in commitment by RM2900. So now instead of ~RM10k a month I need ~RM7.5k. Now it gets more tedious to work on the fixed commitments.

Prioritizing debts

Since I had yet to quit my job I had the opportunity to clear up a few debts before I officially quit. If you noticed there are mainly 4 types of debts (Personal Loan, Automotive Loan, Credit Cards & Housing Loan). I needed to clear some loans and reduce my commitment. I broke them in 4 priorities to work on with just 2 criteria

  1. Does the loan generate value
  2. Does the cost of interest rate reduce as I cover more on the principle

I marked the car as a ‘yes’ to generate value because of the potential of renting it out or to use it for e-hailing service.

If I am successful to follow the priority table and the change in lifestyle, I would be able to reduce my monthly commitment of earlier ~RM10k to now ~RM4.5k (Another way to see this is ~RM150 per day).

Whats Next

So now I had a plan in place the next step is to strategize and execute the plan.

I wanted to share how I worked on top 3 debt priorities on this post but this post is already 4 scrolls long with too many numbers I will save this topic for the next post.

Do drop me a note if you would like me to help you plan out your debts management or if you have some questions on this.


  1. Kudos for loving Excel! Truly resonates with me when reading your blog as I have been using Excel for almost anything and everything that needs quantification, be it for finances or even weighing life decisions. Life can still be lived as equally fulfilling as ever. 😛
    Keep on blogging.

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