Are you financially prepared for rainy days?

We know that times like these can be tough. Though the situation may seem dire, we’re encouraging you to stay hopeful. To help keep your spirits up, we want to make sure you know the best ways to protect your finances during a crisis, and that’s what we’re going to cover in this article today. If you’re ready, chin up! Let’s take a look at how we can make the best of this situation.

No.1

Stay Calm and Assess Your Financial Situation

It’s absolutely normal to be worried about the crisis and its implications on the economy (and more importantly, your personal finances!). We know we are too, especially since the crisis escalated so abruptly. Research has shown that our brains are wired to be more reactionary under stress and this could limit us from logically evaluating all available options. Therefore, it’s crucial that we try to remain calm and avoid making rash decisions during this critical moment. The good news is you can still keep track and make good decisions around your finances. We’re going to show you exactly how to do that.

Evaluating your in-flows and out-flows

First, take a close look at your current financial situation. Do you still have a job to support yourself? Is there an unfortunate chance that you might get laid off? In uncertain and volatile times like these, it’s important to regularly assess your situation so that you can make financial adjustments to address your current needs.

It’s critical for you to build up on your emergency funds immediately. If you didn’t know, an emergency fund is three to six-months worth of income kept in your savings that is reserved exclusively for emergency purposes, such as medical bills or sudden unemployment. If you don’t have one, don’t panic! Take a deep breath and do the math – based on your current income and expenses, how long will your current savings last you? Once you have a good picture of your situation, we can take steps to address it. You will need to start budgeting differently and take decisive steps to conserve your money. Here’s how!

No.2

Ways to Conserve Your Money During a Crisis

It’s already crucial to monitor your spending usually, what more during an emergency situation like this? You might be surprised with how much you can save if you start becoming mindful of your spending.

Here are some tips to help you conserve your money:

i. Find ways to boost your income

Though the crisis has limited some ways to make money, it has also opened the door to some others. Think about the type of jobs that have become increasingly in-demand during the pandemic that you can consider as a side hustle. If your health and situation at your location permits, you could try your hand at becoming a rider for a delivery service since deliveries are a critical service during these times. Alternatively, if you prefer more academic-type work, consider teaching online courses on MOOC (massive open online course) sites like Udemy, or even set up online tutoring with students stuck at home. If you’re more experienced, you might even consider providing resumé writing and reviewing services for those who are preparing to seek new work. Check out popular freelancing websites such as Upwork or Fiverr for more ideas around online services.

ii. Cut all non-essential expenses

Next, you want to look at ways on how you can limit your spending, especially on unnecessary items. In this situation, think about the things that you can cut temporarily such as coffee, video-on-demand or gym subscriptions, so that you can increase your level of savings. You might want to also keep in mind that because of the situation and social distancing, some of your expenses such as commuting, entertainment and eating out might already be cut! Yes, we know it’s hard to let go of things you enjoy, but your priority now should be to take care of yourself by making sure you have enough money for essential needs like food, shelter, health needs, and other bills.

iii. Shop wisely

It’s advisable to head out early to the grocery store to avoid peak crowds. Going early also means that there is a higher chance that fresh goods or promotional items will still be in-stock if you’re the first one there! Another great tip to save during these times is to also opt for items that have a longer shelf life. For instance, these items include noodles, pasta, rice because they last longer compared to items like fresh vegetables or dairy. Consider freezing meat and fish so that they keep longer; in fact, frozen meats tend to last for several months in the freezer, so they’re good to eat after being defrosted and cooked. This avoids multiple trips to the grocery store in which you may need to spend more money and expose yourself to other people. Besides, these long-shelf-life ingredients still allow a versatility in preparing dishes – there is a variety you can choose to cook, from making broth with rice, fried or soup noodles, different types of pasta dishes like Aglio Olio or Carbonara, and a side of stir-fried meat to go with everything! Not too bad right?

iv. Reschedule debt payments where possible

Some lenders are allowing payment flexibility during the crisis. Additionally, a handful of them are even offering bill discounts given the financial hardships that borrowers are now facing. According to an article by Tilleke and Gibbins, the National Bank of Cambodia (NBC) has issued a directive to all banks and financial institutions to restructure loans in order to maintain financial stability, support economic activity, and ease the burden of debtors facing major revenue declines who may find it difficult to repay loans during the ongoing crisis.

If you own a credit card or have loans that you’re struggling to pay off, it might be a good idea to call up your bank and check if you’re allowed to defer some of your debt repayments or extend your tenure so that you can repay in smaller sums over a longer period of time. Any postponement or reduction in interest and principal payments can be helpful in the current economic situation as you can redirect your cash allocation towards things that are more important such as building your emergency savings. Keep in mind that managing your debt payments carefully is particularly important because penalty charges or the accumulation of interest due to late payments will make a huge adverse impact on your financial burden.

Make sure you keep up with the news to get updated on other potential financial assistance schemes offered by the govenment or financial institutions that you can benefit from. Often, they’re listed on the government, bank, or local news website, and you can find out how to apply or check if you’re eligible for these financial schemes. We take all the help we can get!

More news:

1. Amcham Cambodia: NBC ASKED BANKS AND MFIS TO REDUCE FEES, WAIVE PENALTIES ON CLIENTS
2. Tilleke & Gibbins: New Directive on Loan Restructuring During the COVID-19 Epidemic

No.3

Continue Educating Yourself and Build Skills

We know, it’s sad that all going-out activities are restricted at the moment! However, you can take this opportunity to learn a new set of skills, given that you live in a digital age. Having access to internet means you are exposed to unlimited sources such as free podcasts, articles, and even e-books. Take the opportunity to explore different topics of interest or that might come useful to you. These could include marketing, programming, graphic design, and more! Talk about showing off your new set of skills when you head back to work! If you engage in freelance work, you could upskill yourself to diversify your income streams online. Remember, investing in yourself is one of the most important investments you’d ever make.

You’re not alone in your worries about finance. We’re all on in the same boat in this situation. However, take heart! We believe you can take care of yourself and your loved ones. Try following the tips above, assess your situation, find ways to boost your income and reduce expenses. We’re in this with you. Take care!