How to stay resilient amidst economic adversity?
The coronavirus pandemic has resulted in global disruptions of schools, work and normal market operations. The economy is almost at a standstill, while stock markets around the world have plunged, expediting the arrival of economic winter which may appear to last for quite a while. In the face of economic adversity, we must all be prepared and proactively review our finances. Check out these eight tips to manage your money matters prudently. We hope they can help you strengthen your resilience. After all, the sky will clear up after the storm!
1. Review your monthly income and expenses
Make sure you can afford all your essential expenses. For example, mortgage repayment or rent, utilities, transportation, children’s education, insurance, etc. Manage your non-essential expenses with care.
2. Cash is king
It is very important to maintain a sufficient amount of cash for emergencies in times of economic adversity. Build an emergency fund of at least six months of living expenses. In the unfortunate event that you get laid off, this should give you a buffer while you look for a new job.
3. Reduce your debts
If circumstances allow it, pay off your credit card balances and other debts to reduce your interest expenses. Do not add new debts during this time.
4. Keep your job
As waves of layoffs may become imminent, stay diligent and maintain a professional approach. Do not succumb to slacking off work even when you are working from home; do not talk lightly about resigning from your current job either.
5. Be prudent about setting up a new business
Think twice if you intend to start a new business now. Make sure you have assessed the impact of economic adversity on your start-up plan. While opportunities do exist in times of crisis, failure resulting from impulsive actions is not uncommon.
6. Reduce your risky investments
As the market is full of uncertainty, stock indices are now easily fluctuating by more than 1,000 points every day. Speculating by timing a market low or a rebound could easily put you in a bottomless pit. Also, stay away from margin and leverage trading.
7. Equip yourself
Keep up with your continuous learning and improve your competitiveness in the job market. Try to improve your knowledge or pick up new skills too. Make good use of the Continuing Education Fund (fee reimbursements up to $20,000). All these can bring a hundred merits but do no harm.
8. Keep your body and your mind healthy
Last but not least, keep up with your anti-virus preparedness. Exercise, relax and stay strong to weather the current uncertainties.
27 March 2020
