{"id":42811,"date":"2020-03-26T13:39:18","date_gmt":"2020-03-26T05:39:18","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=42811"},"modified":"2020-03-30T18:06:01","modified_gmt":"2020-03-30T10:06:01","slug":"covid-19-recession-malaysia","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/covid-19-recession-malaysia","title":{"rendered":"COVID-19 : What Does A Recession Mean For You And Me?"},"content":{"rendered":"

Right now, it’s hard to see the light at the end of the tunnel. The Movement Control Order (MCO) has been extended another two weeks. While this means we can\u2019t go out and about for another three weeks but it also means a hard punch to the livelihood of many Malaysians.<\/p>\n

The government is dishing out relief schemes and making an effort to help Malaysians who are most vulnerable to economic hardships. Financial institutions have also been instructed to offer loan moratorium, restructuring and rescheduling services to ease the burden of fellow Malaysians.<\/p>\n

Zooming out, other countries are frantically announcing lockdowns, relief efforts and aids. It is unsettling to think that we might be heading towards a recession.<\/p>\n

The International Monetary Fund has predicted that a global recession<\/a> is on its way due to COVID-19 and it could be worse than the global financial crisis of 2008-2009.<\/p>\n

<\/span>What does it mean for you and me? <\/strong><\/span><\/h2>\n

Okay, so global recession is coming. Stocks, bonds, gold and commodity prices have all taken a beating in recent weeks.<\/p>\n

But how will it affect the average Malaysian and what can we do to minimise the impact and survive this pandemic with our finances intact?<\/p>\n

Here\u2019s what to expect:<\/p>\n

Employment uncertainty<\/strong><\/div>
<\/p>\n

Youngsters who are new to the workforce and fresh graduates looking for a job will find themselves in a sticky situation. The combination of lack of experience and budget cuts would not favour the young.<\/p>\n

If you are under a temporary contract, a low-income wage earner or gig worker, you might find yourself facing a boss or client terminating your contract for the time being. As companies and institutions re-strategise and direct their funds to the most profitable aspect of the business, it is common to lay off some employees and freeze the hiring process.<\/div><\/div>\n

Change in plans<\/strong><\/div>
<\/p>\n

Obviously, if you have been planning for international or domestic travelling in 2020, things don\u2019t look good for the foreseeable future. Apart from travelling, people around the world are also cancelling and postponing other plans that require thorough financial planning.<\/p>\n

Weddings, house-buying, moving and having a kid are being postponed until health and the economy get better after the COVID-19 pandemic.<\/p>\n

Parents with young kids will have to reconsider their educational plans since international schools and private tuition classes may leave a big dent on a strained budget.<\/p>\n

For entrepreneurs who have lined up new launches, new ventures, and collaborations, pursuing these plans might have a detrimental effect on your business especially if you are just starting out.<\/div><\/div>\n

Lifestyle changes<\/strong><\/div>
<\/p>\n

As finances become strained, it is natural that entertainment, dining and shopping take a step back. This is to allow for more vital spending.<\/p>\n

Families with young children may face a challenge as kids would not necessarily understand the need for such drastic measures. Especially if dining out, entertainment and shopping were a part of your everyday life before the COVID-19 pandemic.<\/div><\/div>\n

Financial planning<\/strong><\/div>
<\/p>\n

We might need to adjust the monthly and yearly budget as we will be spending one month at home during the MCO. Even if you have a stable job, it would be better to be wary of the trickle effects of the global economy to your industry and amend budgets accordingly.<\/p>\n

More importantly, Malaysians are being allowed to reduce their EPF contributions from 11% to 7% every month until December 2020 and can withdraw RM500 monthly for the next six months. These mean a disruption to your retirement fund.<\/p>\n

For those with existing car loan, home loan, personal loan and credit card balance, you will feel a little pinched. Despite banks offering moratoriums for loans, interest will continue to accrue and you might feel more pinched once the six month period is up.<\/p>\n

Besides these, financial freedom might have to take a step back. If you have been planning to settle your debts and finally claim the #financiallyfree hashtag, your journey might be delayed.<\/div><\/div>\n

<\/span>How to come out stronger after the COVID-19 recession? <\/strong><\/span><\/h2>\n
Improving your employability and upskilling<\/strong><\/div>
<\/p>\n

If you are active on social media, you would have probably come across self-help posts that suggest you use the MCO period to work on yourself. Well, they are right!<\/p>\n

Instead of worrying and speculating, it would be more productive to read more<\/a>, learn a new skill, sharpen your existing skills, do something that will make you desirable for your dream job, and take free online courses.<\/p>\n

For instance, if your job requires you to do presentations or pitches, this is the time to practise like never before. If you are staying at home with your family, you will even have an audience!<\/p>\n

Towards the end of MCO and recession, your resume will look neat and you will be a valuable potential employee.<\/div><\/div>\n

Network like never before<\/strong><\/div>
<\/p>\n

Of course, networking is best done face-to-face. But, with the majority of the world practising social distance and restricted movements, networking online is definitely the way to go for the time being.<\/p>\n

Build connections through your LinkedIn and other social media platforms. If you are a photographer, this is the time to message the award-winning photographer and make connections, because highly likely she\/he is staying at home too.<\/div><\/div>\n

Roll your sleeves up for side hustles<\/strong><\/div>
\n

Side hustles will come to your rescue even if you don\u2019t lose your job. Bonuses and increments might not be great, leaving you pinched for money. Side hustles will provide you the cushion you need before the economy gets better.<\/p>\n

Below are some side hustles that you can try:<\/p>\n