6 Tips to Manage Your Finances Amid the COVID-19 Pandemic
Written by Jovan Lee
Whether you’re working on the frontlines, chugging along from home, or actively looking for a new job during these challenging times, managing your finances is going to be a top priority for everyone. Experts have compared the ongoing crisis to the Great Depression of the 1930s and World War II, where millions of people lost their jobs and business struggled. It’s not too late to take a hard look at your finances to make sure that you can tide through these uncertain times.
1. Evaluate the needs and wants in your budget
It’s all about balancing your income and your expenses. Here’s when we’ll have to decide which household items are necessities (Needs) and which items are luxuries (Wants). By limiting our spend on luxury items, you save cash to manage any unforeseen expenditures that may crop up.
Spend some time with the rest of your household and list down everything where money is being spent. For each item, decide which are “wants” and which are “needs” so you’re better able to decide what you’ll need to cut down on.
Differentiate between high SES and low SES items, and cut down on the more expensive items such as luxury food items, designer clothing, and technology upgrades. If you have subscriptions that you no longer need, run through them with your household and cancel those that are not in use.
Evaluating your budget is the first step to managing your finances better through this period. Keep track of where your money is being spent and set monthly budgets going forward.
2. Set aside an emergency fund
After you’ve set up your budget, start parking a portion of any leftover income into an emergency fund for a rainy day. No one can say for sure when the pandemic is going to end, but even during normal times, experts recommend setting aside about 3 to 6 months of your monthly income to build your emergency fund.
The amount that you set aside should be adjusted accordingly to your personal needs and current savings. Having an emergency fund is just a pragmatic way to deal with the fact that we never know what could happen, and it helps us to tide through tough times if they do hit us.
3. Stock up responsibly
You might have the urge to stock up on daily necessities or groceries due to the circuit breaker and uncertain circumstances, but be sure to do so responsibly.
Stocking up is important, but avoid splurging unnecessarily on groceries and hoarding essential items. Having a month’s worth of supplies and essential groceries is sufficient to keep you and your family well-fed during this pandemic.
Supermarkets are also keeping essentials well-stocked and Singapore is not in a shortage of critical items, so there’s no need to panic and hoard items. Responsible grocery shopping goes a long way towards keeping your finances in check.
4. Defer your loan repayments
Cash strapped individuals can defer their student or property loan repayments for temporary cash flow relief. For those who require additional support to tide them through this challenging economic outlook, the Monetary Authority of Singapore (MAS) has announced that individuals can defer loan repayments for industrial and commercial property, student, renovation, and motor vehicles.
If you want to defer your loan repayments until your financial situation is more stable, you can opt in to defer with your respective banks. This could significantly reduce the financial stress on you and your family during this period of uncertainty and allow you to focus on managing other aspects of your finances.
However, it’s important to carefully evaluate your financial budget before coming to a decision on deferment and come up with a plan to resume repayments in the future. Click here to learn more about the types of loans and deferment schemes available to you.
5. Seek financial assistance if you need it
To provide more financial relief and support to Singaporeans, the Government has introduced a few schemes to help out those who require financial assistance. There are different schemes for different groups fo people so there’s no shame in reaching out for help if you need it!
To find out more about these schemes and your eligibility, visit the website here.
6. Look for sources for extra income
The best way to manage your finances could be to increase your income and get some extra cash to bolster your emergency funds or save for future expenses. Having additional income could also give you some financial relief if you’re facing some instability during this time.
One way you could land a suitable side gig is to download the FastJobs app and search for “#FastHire” jobs to see which employers are hiring urgently right now. Find a role that’s suitable for you and work towards building up your funds.
Apart from looking for a job, selling off items in your home that you may not need anymore could be another way to make some extra cash. You can even declutter your home at the same time!
Look at the big picture
The COVID-19 pandemic has definitely caused a lot of uncertainty and uneasiness, but that doesn’t mean that we can’t keep our chins up and do our best to keep our spirits strong.
While we learn to adapt during this crisis, remember to keep your finances in sight and evaluate the things that you spend your money on. Financial assistance and loan deferments are merely a click or a call away, so do not be afraid to reach out if you need help. Last but not least, look for other ways to earn some extra income to tide you through these challenging times.