The COVID-19 pandemic has pushed many countries worldwide into lockdown and many businesses into shutdown.
SMEs (small to medium enterprises) and independent workers, in particular, are most affected by the coronavirus pandemic; as profits dwindle, many small businesses, freelancers and daily-wage earners may not have the reserve finances necessary to weather the storm. So too are many employees facing the fear of losing their jobs as unemployment rates continue to rise.
Given the severity of the situation, the IMF has predicted that the coronavirus pandemic is paving the way for a global recession in 2020, which could be worse than the global financial crisis of 2008-2009.
What you can do to prepare
Unfortunately, global crises do happen in any economic cycle. Economic recovery may be on the horizon, but the question is when, and for how long.
It’s best to be prepared.
Here’s how you can take proactive steps to financially survive the COVID-19 impact and possible global recession.
1. Refinance your loans & credit
Firstly, here’s some good news: to manage the economic impact of COVID-19 RMO (restriction movement order), BNM is providing financial relief schemes to aid individuals, SMEs and corporations.
So if you’re an individual or business owner currently servicing a loan, all banking institutions have automatically deferred all loan/financing repayments for a period of 6 months, with effect from 1 April 2020.
For SME owners, you may want to apply for further financing if you’re experiencing financial difficulty. Many banking institutions are currently offering their own relief schemes to help you out.
Find out more from your personal bank and read more about BNM’s financial relief scheme here.
Further, you may consider converting your outstanding credit card balance to a term loan/financing. Different banking institutions are currently offering different types of credit repayment options so be sure to find out more with your individual banks.
2. Replan your budget
Tough times call for tough measures. It may be time to temporarily put off that high-end purchase you have been saving for to ride out a possible economic downturn.
Rethink your daily-monthly budgets
It’s back to basics. This means the daily essentials such as water, electricity and food takes precedence over your high-speed internet and entertainment subscriptions.
- Start by tracking your expenses
- Replan your daily and monthly budget
- Adapt to a low-cost lifestyle
- Sell non-essential items if needed
In this time of employment uncertainty, you can increase your chances of landing your dream job instead of worrying.
Take this time to sharpen or learn new skills, read more and enroll for online classes! Some are even free so there’s no excuse not to spruce up your CV.
Here are some sites to browse online courses:
4. Patronize your local businesses
If you’re going to order takeout, purchase healthcare products or learn new skills, go with locally-owned brands and business owners.
In times like these, SME’s and independent workers may be struggling to stay afloat and you can support family and friends by patronizing their businesses.
By supporting local businesses, money gets recycled back into the local economy, enriching the whole community. Furthermore, locally owned businesses can create more jobs locally which will keep others (and perhaps even you) employed.
5. Keep calm, keep saving
If you have been diligently saving for a rainy day, great! If not, let this time be a good reminder on why you should always have at least 3-months worth of savings.
Now, especially, is a crucial time to keep saving monthly. All things considered, you should continue with a long-term mindset for your financial future.
It’s easy to fall to fear given all the negative news on our timelines. But if history has taught us anything is that our economy will recover and the financially prudent will arise stronger from the ashes.
So hang in there, keep saving and don’t be afraid to reach out to family and friends for support!
We’re all in this together.