Do ‘side hustles’ to gain extra income, says analyst

MANY Malaysians are still in a tight spot due to reduced salaries and retrenchments in the workforce facilitated by the COVID-19 pandemic that drove the country’s economy into a downward spiral.

“If you are in this situation, here are some strategies for handling your loans/financing and credit card commitments,” Outlook Asia editor-in-chief, Mohd Kauthar Rozmal told Bernama.

Firstly, he said, two “things” need to be calculated:

“Your total monthly financial commitments such as your car, home, or personal loans/financing that you may have and not to forget credit card Easy Payment Plan (EPP) instalments for large purchases.

“Secondly, you should also identify how much you can repay each month during this period (let’s call this your repayment budget). Knowing these figures in mind will make it easier to decide your next steps.”

Having said that, he said one strategy is to find short-term income opportunities, such as in food or parcel delivery and ride-hailing, as more platforms are actively hiring short-term or part-time roles to meet this demand.

“They could also try various freelancing opportunities if they have the right technical skills to meet them like copywriting and photography/videography to more technical ones such as search engine optimisation (SEO) management.

“These ‘side hustles’ can be a good way to increase your repayment budget and help you meet your monthly financial commitments. Just remember that this income is meant to meet your financial obligations, so try your best not to splurge,” he said.

He also mentioned that the affected individuals could also convert higher-interest facilities into term loans, if their current repayment budget is below their total monthly financial commitments.

“You will need to look into ways to manage your debts quickly, do not just pay the minimum amount for all of them and hope for the best. This is because different credit facilities have different terms and interest/profit rates,” he added.

In the current low overnight policy rate (OPR) environment, he said an existing home loan/financing may actually become more affordable due to the lower prevailing interest/profit rates.

“Since, credit cards are not affected by OPR at all, and start charging interest/profit if you do not pay the full outstanding balance at the due date, it is by far the most expensive credit facility to own if you cannot repay in full,” he pointed out.

If things get too complicated, he said the borrowers could speak to their banks as repayment assistance is available via a simple and straightforward process.

Notably some 98% all repayment assistance applications have been approved, which shows the banking industry’s readiness to help those in dire need.

“Everyone must stay positive and take charge as it is easy to feel stressed or despair during times like these as nobody could have predicted such a profound economic impact, after all.

“But it’s important to remember that we’re not alone in this, and it’s crucial to make decisive actions to take charge of our financial situation,” Mohd Kauthar added. – Oct 28, 2020

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