“Your future depends on what you do TODAY.” – Mahatma Gandhi, Indian lawyer, anti-colonial nationalist and political ethicist (1869-1948)
OUR lives have been disrupted more than ever before as the spread and far-reaching impact of the COVID-19 pandemic continue to dominate the world news.
With renewed fears of expanded and extended containment measures with the new variants, it is natural for us to feel doubtful about many aspects of our life now – including our finances.
In these uncertain and challenging times, the safety of our family members and loved ones is the number one priority. Nonetheless, maintaining good financial health during this period is also equally important.
Thinking ahead about our finances will give us a chance to work through what may happen and help prepare us better for uncertainties.
How do we keep our finances in order as we brace for this next wave of the COVID-19 pandemic? Let’s take a look.
- Rationalising our budget
One of the most basic but impactful thing that we can do for our finances today is to relook at our budget. A budget consists of three key elements: our income, our savings and our expenses. Examine the areas that have changed during this pandemic. Look for areas to bolster income levels, think of how to save more and cut down on non-essential spending.
If facing any problems with repaying debts, it will be wise to get in touch with your lender or bank as soon as possible to discuss options about payment deferment or work out a financing repayment plan.
- Shoring up emergency funds
To prepare for life’s unexpected expenses as a result of this pandemic, it is essential to have adequate savings or emergency funds. Whether or not we are currently facing a challenging financial situation, it is wise to stay proactive and ensure that we have enough funds to level out the pain from this crisis.
While ‘enough’ may mean different things to different people, it is generally advised to have at least six to 12 months of emergency funds to sustain our daily expenses in pandemic times.
If you don’t already have an emergency fund in place, don’t stress. It is never too late to start. Establish a plan to start building an emergency fund today. Putting away even a small amount consistently can make a difference when faced with unexpected expenses.
- Reviewing your estate plan
This COVID-19 situation reminds us how important it is to have proper estate planning. Failing to plan adequately may cause a lot of stress, confusion and financial setbacks for our family and loved ones.
Regardless of our circumstances, we should have a plan to protect ourselves, our loved ones and our assets. Now, more than ever, it is vital to have our will, trust, power of attorney and advance medical directive updated and in order, to reflect our goals and wishes.
Without proper estate planning, we will be leaving things up to chance – from how our assets will be divided to who will be raising our young children.
The recent pandemic may have a significant impact on our financial health and personal financial planning. Life and finances can be unpredictable but how we choose to respond is within our control.
By thinking and preparing ahead, a financial plan will go a long way to help weather financial uncertainties and improve overall financial health. – Nov 7, 2021
Dr Selina Dang, CFP is a Licensed Financial Planner with Coreplus Advisory Sdn Bhd and a Certified Member of FPAM.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
