With companies closing their doors comes a spike in the unemployment rate. Many Malaysians live paycheck to paycheck, and this was before the pandemic hit. The rise of COVID-19 means that people who have little in the way of savings feel an extra pinch in their finances. As financial uncertainty and unemployment rates persist, more Malaysians will suffer the
strain in their finances. The government tried to help with an economic stimulus package designed to give cash to citizens.
However, this obviously cannot serve as a viable long-term solution. If you feel the financial pinch
because of the current pandemic, then it helps to set up an emergency budget. To stay afloat during a crisis means you will need to cut back or eliminate certain expenses. It helps to review and revise your budget to make it past the effects of the pandemic. Here are five steps you can follow to help manage your budget as we ride out the crisis and wait for normalcy to return.

1) Take Stock of Your Assets and Income
You need to look at two things when building your budget: your earnings and expenses. The coronavirus has caused many people’s incomes to take a substantial hit. You can’t continue to budget the same way you did before the pandemic hit. To start, check your income, especially if your household has experienced a layoff or a cut in working hours. This should give you an idea of how much you will need to cut from your budget. Take note that if you were already living above your means before the coronavirus hit, then you may have to make more drastic cuts to your budget.

The next step involves closely examining your income. Are you secure or would you need extra cash? If you’re looking for extra cash, consider doing some freelance work. There are still plenty of unique, moneymaking opportunities are out there for you to capitalise on at your convenience. If you have a unique skill, consider doing an online class to teach those skills. There are many platforms online that will allow this. Next, look at your savings. Ideally, you should have enough to tide you over for up to six months of expenses. But don’t panic if you don’t have a lot of cash saved up.

2) Understand Your Expenses
Make a list of everything you spend money on every month. Start the list with your fixed expenses. These include everything you need to support a basic standard of living, such as housing costs, food, utilities, insurance and debt payments. Next comes your variable expenses. These expenses can change over the course of a week or month. Variable costs may include clothing, fuel, recreational expenses, personal
care and entertainment.
Putting your expenses in specific categories
can help you determine which to prioritize and
which to cut out.
3) Review Your Essential Spending
After trimming off most of the fat from your
budget, it’s time to review your essential
Start with your housing expenses. Do you own
your own home? If so, reach out to your lender,
especially if you have an outstanding mortgage
and you don’t want to fall behind on payments.
Most creditors will help you explore any options
to suspend or reduce loan payments
Consider refinancing your home loan. Mortgage
loan rates remain at all-time historically low
rates right now, and refinancing your mortgage
could help lower housing costs. Keep in mind
that refinancing your mortgage may require
closing costs, unless you prefer a no-closing
cost home mortgage refinance.
Renters may have fewer options in managing
rent payments. Many cities and states offer a
degree of short-term protection by imposing
moratoriums on eviction.
You also need to properly manage your credit
card debt. Stay in touch with your credit card
issuers. Credit card companies often have
programs that let you lower your payments


They can also offer a temporary reduction on
your interest rate.
4) Spend Smart
Even the strictest budgeting won’t prevent you
from spending money completely; you just have
to spend your money wisely.
For example, use vouchers to save while
shopping and take advantage of cash back
apps. Cash back apps and programs pay you
back a percentage of the money you spend.
Additionally, cash back credit cards let you
double up on rewards. However, be careful
when using your credit cards that you do not
overspend, especially when money is tight.
Take advantage of sales and buy food and
other necessities in bulk. Buying in bulk is often
cheaper and more affordable, and saves you
multiple trips to the grocery to buy food and
other needs.
5) The Bottom Line
With the right budget and the right mindset, you
can stay afloat financially during the
coronavirus COVID-19 pandemic. Things may
get tighter when your budget changes
drastically, but don’t panic. Take things in
stride, consider your available options, and get
to work on a new streamlined budget.