When things were going well nobody question the wisdom of splurging hundred of thousands on a set of wheels. Nobody ask why we need a machine that can propel us to 100km per hour in less than the time you took to read this sentence. Or do we really must buy some thing during every visit to the shopping malls and eat out so very often in those fancy restaurants that charged over RM10 for a cup of joe.
Even then the gloomy signs were already there. The US markets were falling under the burden of a credit crisis ignited by its sub-prime problems and oil prices hitting targets that at one time was ridiculed as too overtly bullish. Yes, even then, we kept on spending and extending our personal credit position. Maybe to keep up with our next-door neighbors simply because it was what everybody in your office was doing. We truly believe that the good times will roll on forever and we assure and congratulate ourselves on our good fortunes of being able to financially afford the good life.
However, all good things must come to an end. The cow finally came home that day when the government decided to let petrol prices trade closer to its market rate. People were panic-stricken and irrationally wasted hours in the jam-packed petrol kiosks chasing the one-off saving on petrol. Overnight, we were left with the realization that things will not be the same anymore. The days of cheap stuff are finally over. As fuel prices increases, so will the prices of other goods and services. Indeed within days of the petrol hike, prices hikes for a number of items were announced.
As our daily expenses soared, so does our blood pressure as we find our wallet so much lighter. The natural instinct is to look elsewhere for a reason for the predicament. No amount of efforts and knee-jerk relief initiated by the Government is adequate to pacify the disgruntled people from taking the issue to the street. However, before we even start to do so, let us be reminded that this is not the first economic crisis the world has ever experienced. Malaysia also has had its fair share of economic slowdowns in the past. We should conduct a personal audit on our financial affairs which may have contributed to our present state of affairs. Were some expenditures or purchases really necessary?
This time around we also have rising inflationary pressures due to surging commodities prices as well as an uncertain political situation. The stage is set for collision of factors which has already resulted in much uncertainty. A financially sound and well-planned company knows the “peak and valley” of economy cycle and thereof creates a contingency pool of funds to meet the risks of losses that might occur from external events beyond its control. At individual level, “saving for the rainy day” works just the same for preparing a person or a family bracing trying time like now when purchasing power shrink rapidly in tandem with the rising cost of goods and services.
In a way, we are facing a perfect storm and we need to find shelter as the storm gradually builds momentum. In times like this, age-old advice like “living below your means” carries new significance as we struggle to keep afloat. Maybe we need to lighten our financial burden by off-loading some non-essential liabilities by doing a household financial assessment to create a stronger personal balance sheet. It will be a painful exercise no doubt as it may involve downgrading but hopefully we will emerge stronger after the storm finally blows over.
Even then the gloomy signs were already there. The US markets were falling under the burden of a credit crisis ignited by its sub-prime problems and oil prices hitting targets that at one time was ridiculed as too overtly bullish. Yes, even then, we kept on spending and extending our personal credit position. Maybe to keep up with our next-door neighbors simply because it was what everybody in your office was doing. We truly believe that the good times will roll on forever and we assure and congratulate ourselves on our good fortunes of being able to financially afford the good life.
However, all good things must come to an end. The cow finally came home that day when the government decided to let petrol prices trade closer to its market rate. People were panic-stricken and irrationally wasted hours in the jam-packed petrol kiosks chasing the one-off saving on petrol. Overnight, we were left with the realization that things will not be the same anymore. The days of cheap stuff are finally over. As fuel prices increases, so will the prices of other goods and services. Indeed within days of the petrol hike, prices hikes for a number of items were announced.
As our daily expenses soared, so does our blood pressure as we find our wallet so much lighter. The natural instinct is to look elsewhere for a reason for the predicament. No amount of efforts and knee-jerk relief initiated by the Government is adequate to pacify the disgruntled people from taking the issue to the street. However, before we even start to do so, let us be reminded that this is not the first economic crisis the world has ever experienced. Malaysia also has had its fair share of economic slowdowns in the past. We should conduct a personal audit on our financial affairs which may have contributed to our present state of affairs. Were some expenditures or purchases really necessary?
This time around we also have rising inflationary pressures due to surging commodities prices as well as an uncertain political situation. The stage is set for collision of factors which has already resulted in much uncertainty. A financially sound and well-planned company knows the “peak and valley” of economy cycle and thereof creates a contingency pool of funds to meet the risks of losses that might occur from external events beyond its control. At individual level, “saving for the rainy day” works just the same for preparing a person or a family bracing trying time like now when purchasing power shrink rapidly in tandem with the rising cost of goods and services.
In a way, we are facing a perfect storm and we need to find shelter as the storm gradually builds momentum. In times like this, age-old advice like “living below your means” carries new significance as we struggle to keep afloat. Maybe we need to lighten our financial burden by off-loading some non-essential liabilities by doing a household financial assessment to create a stronger personal balance sheet. It will be a painful exercise no doubt as it may involve downgrading but hopefully we will emerge stronger after the storm finally blows over.
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