We still have less than 30 days to the end of the recovery movement control order (RMCO) on 31st August 2020. For the past few months, most of us may have gone through changes brought about by the Covid-19 pandemic, particularly our finances. Here are six financial lessons that we can learn from it:
- An emergency fund is a lifesaver
Ever since the MCO started, we’ve seen plenty of companies retrenching their workers due to the pandemic. With more job cuts and store closures expected to happen, having a sufficient emergency fund, one that could last you around at least three to six months, can be a lifesaver. Of course, it’s better to save more. Ultimately, we should never rely on anyone to help us out financially. - Protecting yourself and your family early on can come in handy
Those who got themselves insured, whether it’s life or medical insurance, can at least have a peace of mind in case something happens and knowing that their loved ones will be taken care of. Depending on your needs and budget, you may consider medical insurance, which covers the cost of hospitalisation and related treatment, or life insurance, which protects your family financially in case of your untimely death. - Managing our finances and saving money should always be a top priority
It’s never too late to start managing your finances properly and saving money if you haven’t done so. There are plenty of free yet educational resources online where you can learn how to manage your finances, including As-Sidq’s blog.
If you’re truly short on cash, try to save at least RM1 a day or RM20 a month, depending on your situation. Recently, a young mother made headlines when she was able to save RM12,600 in a year by saving a mere RM20 every time she has a RM20 in her hands. It also helps to have a financial goal so you’re more motivated to save. - Taking care of your debt first can do wonders to your finances
Your debt, such as loan/financing repayment and credit card payment, may take a toll on your finances, particularly in these challenging times. Which is why you’re encouraged to seek out any assistance that’s available.
To ease the cash flow of individuals who are likely to be the most affected by Covid-19, banking institutions have provided an automatic deferment of all loan/financing repayments for a period of 6 months.
For credit card facilities, banking institutions have offered to convert the outstanding balances into a 3-year term loan with reduced interest rates to help borrowers better manage their debt.
However, said moratorium has recently caused a lot of confusion among Malaysians. You may check out the new Bank Negara Malaysia COVID-19 Assistance Information Portal for complete and updated information regarding the measures by BNM and the Malaysian financial industry to assist Individuals, SMEs, and Corporates during the Covid-19 pandemic.
Similarly, for a free financial counselling or if you’re interested in starting a debt management programme, you may check out AKPK. - We’re not supposed to hide anything related to finances from our spouses
Unless you’re in an abusive relationship (in which case you’re encouraged to save for a secret emergency fund), it’s best to come clean to your spouse when it comes to each other’s finances. Let them know of your expenses, any cash reserved, or even your employment situation. Failure to be honest about one’s finances may result in a feeling of distrust and betrayal, eventually ruining your relationship. - We don’t need to go outside all the time to have fun
With businesses closed until earlier this month due to MCO, it shows that you can still have fun from the comfort of your home. Most of us are able to shop, watch movies and even learn new things online to keep ourselves occupied. This truly cuts down the transportation costs. Plus, there are plenty of special offers available online by retailers and service providers to help us through this tough times.
