An economic downturn is something we can’t avoid right now. Learn what you can do to ensure smooth sailing through tough times.
“2020 is a bad year for me!”
“I wish I could restart my 2020 to deal with my finances differently!”
“How would my finances look like in the second half of 2020?”
Many Malaysians are asking these questions. A significant number have already been impacted by income loss, pays cuts, and perhaps retrenchment this year due to the pandemic. Financial issues such as debt restructuring, tight cash flow, and lack of emergency funding, are cropping up often enough to begin looking like an expected norm as people are focusing more on the problems rather than seeking solutions for their current financial situation.
Since we can’t turn back time and restart the year, it is important to look at this matter of financial preparedness more objectively to seek for solutions out rather than lingering on things that are not able to be reverted.
The key point is – it is never too late to realize the situation and take the action to solve it even at the cusp of an economic downturn.
Don’t cry over spilt milk.
Here are some simple and proactive tips that you can take when addressing financial issues, especially during an economic downturn.
1. Review where you financially stand
The art of managing finances well starts with identifying where is your current financial standing. This is the most important step, yet most people are not able to get it done correctly due to busy work schedules and many more other excuses. Research shows many people failed to improve their finances was due to failure to identify where they are right now and where they wanted to be in short term or longer time frame.
The analogy I always put forward before I start my meeting with clients is to think of navigation apps such as Waze. In order for it to function correctly, you need to provide it with your original location and destination. From there, the app will provide you with navigation and even a time estimate for you to reach your destination. The same applies to your getting your personal finances in order.
To know where you currently stand financially, first start by finding out the truth about your current cashflow. Find out accurate numbers regarding your income, savings, and expenses. Nowadays there are many expense tracker apps that can help you with this. By identifying your cashflow,