Change of Standard of Living or Maintaining, During Tough Times

Bismillah.

Continuing from my last blogpost When Reality Kicks In (Part 4) Solutions to Recession, this blogpost serves as a next step of what we should do to ensure that we are prepared and aligned with our goals.

Living in the pandemic/recession period can lead to varying degree of experience and impact on individual lives, depending on their financial and life situation.

There is always uncertainty in life, but as an individual, we should bear in mind that we have to prepare for worst case scenarios.

Here are some steps to managing/readjusting your finances and goals:

1. A great rule of thumb for emergency funds would be 6 months worth of expenses. It is advisable for individual or business to sit down with your financial planner or business adviser every 6 months or annually to review your personal goals, financial goals and business goals.
2. After you are done with your review, it is good to identify which of the expenses is fixed or variable. Fixed expenses can be your utilities bill, mobile phone subscription, allowance to parents, insurance premium etc. Variable expenses can be eating out expense, Ez-link/cash card top-ups, groceries shopping etc.
3. Identify the Needs and Wants in your expenses. There are some expenses that is Fixed expenses but a Want, eg. Gym subscriptions or entertainment subscriptions etc. It is good to determine which of the expenses is the core important expenses to keep your life going despite any setbacks.

Last but not least, own your expenses, ensure you save enough for ‘rainy’ days. Wishing all the best to my readers wherever you are. 🙂