HSBC Premier Special
Our financial needs are constantly changing as we navigate through different life stages and it’s important to make strategic decisions for our long-term financial health
Had it not sunk in before then, last year many of us realised that we can never know for sure what will happen in life and that such events as job loss, illness, marriage breakdown or the loss of a home can very well happen in the course of one’s life. As unprepared as we were to deal with working from home, wearing a mask every time we stepped out of our house or working out indoors, we were also not ready for the financial implications brought on by the pandemic from job loss and business slowdown to pay cuts.
A survey done by the Department of Statistics during the first Movement Control Order revealed that Malaysians had savings to tide them over for only one to four months. With many Malaysians tied up with home loans, auto loans and the uncertainty of the duration of the pandemic and subsequent recovery, it was clear that financial relief was inevitable, which was provided for through cash handouts, six-month loan moratorium as well as permission to withdraw from EPF accounts.
As unprecedented as the pandemic is, in reality, the impact it has had—job loss, illness, economic downturn or income deficit—are all potential real-life situations that financial advisors warn us to prepare for. It’s all part of managing our money, which includes anticipating and preparing for our financial needs, mitigating potential risks, budgeting and keeping track of expenses, plus investing in financial products or services.
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Are You All Set Up, Financially?
An important step in managing our finances is to anticipate our financial needs throughout our lifetime. Our personal goals also play a big part in mapping out and zeroing in on our potential financial needs. Do we intend to get married or remain single? To have or not have children? Do we want to become a business owner or travel extensively?
The only issue with goals is that they can change as we progress in life. So, how do you plan then? The advice is to set goals anyway because it will help you start the planning process. Also, know that financial planning is an ongoing process; it’s not set in stone. Adjustments may be inevitable depending on the economy, personal constraints, and other extenuating circumstances.
For most of us, the most common life course is to pursue higher education, build a career, get married and have children. Mapping out our financial needs throughout the different stages of our lives can help us plan better—and it’s wise to start from young.
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