Prof Dr Mohamad Fazli Sabri

No Reason To Incur Debts To Celebrate Hari Raya, Says Academic

News Focus By Nur Aimidiyana Zuher

KUALA LUMPUR, (Bernama) -- With another 10 days to go before Hari Raya, shopping centres are seeing a deluge of Muslim shoppers who are busy making preparations to celebrate Aidilfitri.

Whilst city malls vie with one another to provide the best decorations and create a festive ambience, various promotions and discounts are also being offered to entice shoppers.

But little do unsuspecting customers realise these very promotions that tout "substantial savings" can actually trap them into spending more than they can possibly afford.

It is certainly cause for concern if people are willing to incur debts in order to celebrate Hari Raya in a resplendent manner, just to impress others.

Is it necessary to become indebted purely for the purpose of celebrating a festival?

Asso Prof Dr Mohamad Fazli Sabri, who is head of Universiti Putra Malaysia's Department of Resource Management and Consumer Studies, said Malaysians tend to spend excessively, particularly during festive seasons, to the extent of watching their debts piling up.

He said they often made the mistake of prioritising current expenditure, without taking into consideration future requirements.

"Once the festive season is over, they end up in difficulties because they had spent all their money on the celebrations. We can't blame the traders or shopping complexes or the advertisements because we have to take matters into our own hands and plan our expenditure carefully," he told Bernama.

He said the easy availability of personal loans from licensed, and unlicensed, financial institutions was also responsible for the increase in personal and household debts.

He observed that money-lending outfits, some of which were licenced, have been mushrooming, on the basis that they were providing a service to those who needed it.

"They use all kinds of advertising strategies to lure customers. Low interest rates, flexible repayment schemes, 24-hour approval for loans and various gifts... these are among the gimmicks used to woo customers," he said.

Prior to drawing up a shopping list for a festival, said Mohamad Fazli, it was crucial for one to take note of his or her financial position before deciding how much to allocate for spending.

"Even then, part of this money (at least 10 percent of the gross income) should be set aside as monthly savings. Usually, the government and private sector hand out incentives or bonuses to their workers to help tide them over the festive period," he said.

To enable householders to plan their budgets wisely, he suggested that they categorise their monthly expenditure into two - fixed or variable. The variable budget may change when a festival was due as allocations have to be made for buying new clothes, food, furniture, and to be given out as duit raya, he said.

Mohamad Fazli said when it came to festive spending, it was essential to draw up a list of priorities, with the most important ones listed on top. He said if short on cash, then the purchase of items on the bottom of the list could be deferred.

He said if consumers closely adhered to their budgets and were disciplined in their spending, they would not face financial constraints later on.

"It's usual for people to spend more when they have a festival to celebrate. Once the celebrations are over, they should get down to the task of settling their debts. If they had skipped making one or two monthly payments on their housing and car instalments or credit card payments, then they should make an effort to settle all the outstanding payments.

"If they don't have enough money, they should try to get interest-free loans from their family members or friends to settle all those outstanding dues as soon as possible, because when payments are delayed, extra charges are imposed on them (by financial institutions)," he said.

Mohamad Fazli urged the public to change their spending habits, in keeping with the current economic scenario and rising cost of living.

He stressed that every householder - irrespective of his or her socio-economic background or level of affluence - should maintain a budget.

"With Hari Raya just around the corner, it's up to the people to decide how much they wished to spend on the festival. I suggest that they come up with a realistic budget, in accordance with their financial capacity. They should also be ready to change their lifestyle and spending habits and focus on moderation.

"I also suggest that in future they start making preparations as early as three months before Ramadan to spread out the festive spending," he said.

Meanwhile, civil servant Nur Hidayah Abd Ghani, 29, said she usually prepared a special budget to enable her to spend wisely for Hari Raya.

"I don't always buy new things for myself. If I already have something nice to wear, I won't spend money on new clothes. I prefer to spend on my children," said Alor Gajah-born Nur Hidayah, who will be celebrating Aidilfitri with her in-laws in Raub, Pahang.

She said her budget for this year's celebrations was modest in view of the high cost of living, adding that she was even baking her own cookies instead of buying them.