Today
commenced the 2nd phase of the MCO, with a stricter compliance to
further mitigate the spreading of COVID-19. Last week, the PM unveils the
economic stimulus package worth RM250bil to cushion the nationwide economic
impact due to the restriction order as well as to stimulate economic growth
during the post-MCO. For many, especially the needy ones, would see this as a
caring effort by the government to help those in need to sustain their lives as
well as their financial situation. Well, that’s a good move by the government.
Despite that, what lies beyond is uncertain as this situation
is unprecedented. The COVID-19 outbreak did not only affect our country, but
the entire globe as well. And do expect that global recession would occur. If
the worst comes to the worst, mass entrenchments might take place. Yup,
government did take measures through their stimulus package to prevent the
employers from firing their workers. But who knows what would really happen? If
the company couldn’t sustain any further and they can only choose between
entrenchment or filing a bankruptcy, what do you think they would opt for?
Think about it. Next, the amount fork out for this stimulus package is about 83.4% of the amount planned to this year's budget. What do you think? I believe there will be give and take in this matter. Furthermore, things might turn even worst if the citizens
continue to take things for granted, being expectant of the government, and are
poor in their personal financial management.
“Selalu sedia”, or always prepared, this is the slogan that we
need to remember as a young scout. “Sediakan payung sebelum hujan”, or to prepare
an umbrella before a downpour, a Malay proverb that reminds us to be prepared
in any situation. That’s why, regardless of what sorts of planning we are doing,
we have to come out with the plan B, or also known as the contingency plan. So,
are you prepared? Or you need some kickstart for the preparation?
Here, I would like to share with everyone how you could be prepared
financially for the worst. I’ve come out with the formula of MAPES in dealing
with the personal financial crisis:
Be Mentally Prepared
Before you could go any further, the first thing you need to
deal with is your own emotion.
- Be aware and recognize that negative emotion within. Its normal to experience emotional turmoil as you might have been putting a lot of expectations in your current financial situations.
- Learn to accept the current financial situations. You couldn’t change what has happen in the past, but you have the ability to decide what will happen to us in the future. Cultivating acceptance would empower you in facing adversities and challenges to come.
- Be open about your situation. Communicate your situation with your related individuals, especially your family members or best friends. Who knows, they might be your great source of your support.
- Be committed to positivity, provided that you are emotionally stable and understands the situation that you would be facing now.
Analyze Your Financial Situation
Next, you need to understand your current financial situation
before making any necessary plans.
- Calculate your net worth through properly investigating into your assets and liabilities. Assets can be valuables, saving accounts, investments or anything that’s valuable. While liabilities are your debt which you owe such as credit card debt, mortgages, loans and unpaid bills. Your net worth will be the outcome after you have minus your total assets with your total liabilities.
- Determine your net income through analyzing your income and expenses. Your income is the source of your revenue, such as salary or rental revenues. While your expenses can be your expenditure on utilities, food, transport, entertainment and etc. The net income is the outcome of your total revenue deducted with your total expenditure.
- Upon making clear about your net worth and net income, make an effort to assess the consequences of your current financial situation. Think and brainstorm how you would improve your current financial situation better.
After making clear of your financial situation, you can now start brainstorming and planning on your financial improvement.
- Determine your financial priorities. The priorities may be getting new job or getting another job, cutting expenses and debt forgiveness. Your financial priorities depend on what you need the most now to improve your financial situation.
- Make monthly budgets based on the priorities. Many find this troublesome, but yet this is one of the most effective way to control your spending. Next, track your spending. Discipline yourself by making records on your daily spending. There are budgeting and spending tracker apps available for your convenience, so no worries.
- Explore opportunities for additional incomes. You may opt for part-time e-hailing driver, delivery boy or even part-time online retailer, or whatever that suits you the most. However, whatever part-time jobs that you’re opting for, please make sure that it complies with your main job’s company policy.
- Keep yourself updated on the government assistance, such as this Bantuan Prihatin by the government. However, do not rely too much on the government or taking their assistance for granted. You need to make clear that they just assist, not give.
- After having all those plans ready, execute it. It’s normal to feel uncomfortable to stay disciplined in keep tracking on your expenditure in the beginning as this is not part of your habit. So, for the sake of your future, please bear with this. Be determined and zealous. You can make the difference.
- If you found out that your current debt is over burdensome, consider consulting related personnel for debt restructuring to smoothen out your financial burden. I believe they would understand you and find a way to make things work for you. Unless, you owed loan sharks.
Execution doesn't stop here, even if your goal is achieved. It's a continuous process to begin with to prevent you from financially prone.
- As I mentioned earlier, discipline yourself in executing the plan. Stay consistent and make it habitual. It will help you to stabilize your financial situation. Who knows, your children will learn from you as well.
- What is in the past, let it be the past. Learn from the past experience and refrain from repeating it. The whole process of financial recovery and stabilizing might be challenging, but in the long run it’s worth it.
- As you’ve successfully back on track, don’t just stop there. Plan in advance and be prepared for any potential rainy days to come. Set up an emergency funds based on your needs. Whatever happens will happen eventually, and we wouldn’t know when it will happen. So, just be prepared.
These
are merely my own sharing of thoughts about dealing with personal financial
crisis. You may check out on the suggested links below for more tips about the
topic. Last but not least, be grateful with what you have and don’t take things
for granted. You wouldn’t want to spend most of your time complaining or
placing a grudge for your own unpreparedness. No one will forever be held responsible to you but yourself. Stay smart, stay safe, stay at
home.
Some informative links:
May
all of you be well, be healthy and be peaceful.
#MCOday15
#sediakanpayungsebelumhujan
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