5 Ways to Cope With Financial Setbacks Hitting Singaporeans Hard Amid COVID-19

Big ticket money problems that Singaporeans should be able to relate, from job loss to sudden medical crisis. On the bright side, they can be pre-empted with simple-yet-neglected solutions — all found below. 

Death and taxes are the only certainties in life, they said. But if there’s ever a third that comes close, it’s financial setbacks. We would all hit a snag — both self-inflicted and cyclical — at some point in our lives; if the rampant headlines about the COVID-19 aftermath isn’t already a grim reminder, no one can truly say they are safe from retrenchment, cashflow meltdown and abrupt medical scares. 

The pandemic notwithstanding, let’s take a look at some of the big ticket challenges even the most money-minded Singaporean would have to contend with — plus ways to own it.

Financial Setback #1: Sudden unemployment 

Finding yourself out of a job is quite possibly the most common setback, with or without COVID-19. Yet, it is the most painful one to bear, especially if you have dependents. The way COVID-19 has threatened livelihoods and our ability to provide taught us that this can happen overnight, whether you’re a full-timer facing your company’s restructuring (read: retrenchment) or a freelancer whose pool of clients has suddenly dried up. 

How to cope: For those of us who are fortunate to still be gainfully employed, or are finding solace in the government’s S$48 billion Resilience Package, now is a good time as any to plan and set aside 6 to 12 months’ worth of expenses as your own resilience fund. 

Given a ballpark of S$1,500 to S$2,000 for you and your household’s monthly expenditure, you would be looking at at least S$9,000 in emergency cash reserves. We imagine it's easier to lock down this habit now that there's no reason for you to spend on expensive CBD lunches and new threads.  

For those who are less fortunate, there might just be a sliver of hope in the form of rising gig work. Remember: the ones who are quick to adapt are the ones who will survive - and thrive. 

Financial Setback #2: Mounting medical bills 

Speaking of public health emergencies, let us not forget that the biggest financial siphons are the actual treatment and hospitalisation costs incurred. There may also be instances of personal accidents, or a discovery of an underlying condition that requires long-term care, which may quickly dawn upon you that MediSave and MediShield are rather basic.

If you haven’t already signed up for your complimentary COVID-19 insurance coverage, here is one pre-emptive move to really set into motion. 

How to cope: Short of maxing out your credit card or crowdfunding your bills, it would be wise to start scheduling regular coffee sessions (on Zoom) with your financial advisor to see if your existing portfolio adequately captures your changing needs (and whether your budget can deal with changing premiums). 

Financial Setback #3: Timing the stock market and losing 

Most of us can only fantasise about Warren Buffet-level gains. Although he has inspired many to take their first steps towards investing, eager Singaporeans looking to build fast side income are still getting their fingers burned. 

With so much speculation about stock prices bottoming out amidst COVID-19, there is temptation to buy into market sentiments or a friend’s ‘insider tip’ to profit off discounted financial instruments in the short run. 

How to cope: Take a step back and do your due diligence. Read up on the company’s past performance, analyst reports, and, of course, multiple news sources to corroborate that ‘insider tip’. 

There are also online investment simulators available for you to get a grip on different financial instruments without sacrificing your life savings.

Financial Setback #4: Falling for online scams

Ponzi schemes are so yesterday. Online scammers have gotten prolific and diversified to the point that Singaporeans are repeatedly becoming, well, ‘repeat customers’. 

Whether it is the impersonation or the credit-for-sex kind, such fraud cases have reportedly shot up by 54% over the last year, with about S$168 million being cheated out of in total. 

How to cope: Before you think this is all exclusive to senior citizens losing their CPF overnight, these scams are taking place all over social media and e-commerce platforms and any one of us could be a target.

The safe bet is to double down on your vigilance when transacting online, and it never hurts to question, say, an ‘MOH official’ who needs your personal information and financial details for ‘contact tracing’. 

Financial Setback #5: Failing businesses

The low barriers to entry for start-ups in Singapore have cultivated a burgeoning culture among youths to turn their passions into a career. 

However, entrepreneurship is a gamble on a dream; for every Carousell and Grab we celebrate, there are many more made-in-Singapore hopefuls that succumb to the darker side of fallouts and closures, forcing small and medium enterprise (SME) owners to be saddled with eye-watering debt. 

How to cope: You’re not alone in the SME owners community to make it through the next month. As of now, at the very least, you should be checking out the government support measures you are eligible for, and hinge on it to survive this circuit-breaker timeframe. 

Some are also counting on awareness campaigns such as the support local businesses movement spreading on social media; if you have already decided that folding is not an option, and you require a solution with a little more certainty, personal loans might be the cash cushion you are looking for.  

This COVID-19 crisis may last for an extended period. How can personal loans help?

We understand that everyone’s circumstance is unique and some of these financial difficulties require immediate solutions. 

That is why during such times, personal loans are more useful than what people give them credit for (see what we did there?); they offer an average of 4% interest p.a. on your loan amount,  a significant difference compared to credit cards’ rapid-rolling 25%! You may borrow 4 to 10 times of your monthly salary to cushion whatever that comes your way. 

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