The COVID-19 pandemic has undoubtedly sent waves of shock throughout the global economic system by rattling many industries and eliminating the jobs of many individuals.
However, on a brighter note, it did teach us some valuable lessons about making better decisions in the future.
Here, we discuss the 4 financial lessons the pandemic has taught us.
Debt often has some negative connotations, but ultimately, it is often necessary and can also be a sign of growth (think education loans, home loans, or other upgrades on personal and professional development). Improper debt management, however, spirals uncontrollably and takes a long time to recover from.
The first step to managing debt in our lives is to understand the importance and impact of interest rates. We should plan on allocating our salaries wisely by accounting for what we owe and when.
Also, it is important to understand how borrowing from banks or licensed moneylenders may provide us with instant cash loans in Singapore through a personal loan, which may then be used to make it easier to pay for large ticket purchases that we may incur. As such, by spacing out the due dates, and splitting payments into lower monthly instalments, we can increase our existing cash flow, enabling us access to greater personal cash flow.
2. Understanding the difference between ‘cheap’ and ‘expensive’ money gives us a better perspective on valuing the cost of borrowing, saving, and spending
Interest rates are usually the bedrock of most economies’ success in maintaining a good amount of savings and spending, thus helping to keep inflation in check. It is important to always know when is a good time to spend, and when we should adopt a more thrifty approach.
When interest rates are generally low, it is usually a good time to spend since there is little incentive to keep our money in a bank. This approach can be applied when we look towards purchasing expensive items such as a car or house, where we have a huge loan amount to pay off over several years. Vice versa, in an economic climate with high interest rates, it would be more favourable to save to achieve greater returns on the money placed in a financial institution.
Also, it is important to always consider other forms of instant cash loans in Singapore, such as those we can obtain through licensed moneylenders, to properly evaluate whether we are getting the best and cheapest personal loan in Singapore.
We have seen how the pandemic has put an end to and adversely impacted a range of industries such as the airline industry and even many other brick-and-mortar companies. With such economic uncertainty looming, we must have a sufficient amount of emergency savings kept aside from our monthly salary.
Also, it is a good practice to constantly revisit our existing loans to seek better alternatives in terms of refinancing our debt obligations—for instance, a debt consolidation loan—to lower the amount of interest incurred on our financial liabilities.
In addition, proper diversification may also cushion our overall losses and we need to constantly update ourselves with the right type of economic information to be better prepared for any type of restructuring. Being well-informed will also enable us to compare so that, if we ever decide to apply for a personal loan, we know where to seek the cheapest personal loan in Singapore, which eventually may save us huge sums of money in terms of the interest rate when calculated over several years.
Many of us have lived through the years when there were no mobile phones and very little or even no means of obtaining information from the internet. However, with the rise of digitalisation and technology, we now have the world’s information available at our fingertips. From an organisational standpoint or even on a personal level, it is important to embrace changes and to always be versatile in moulding ourselves to blend into the wider global economic structure.
From e-commerce to online lending, we have seen how businesses have shifted their models taking into account the wide marketplace that could exist online, thereby enabling the business to reach a larger target audience.
And since we can use the web to search for almost anything, a good start would be to look through our existing financial obligations and then search for the cheapest personal loan in Singapore to restructure our finances. With that, we can properly plan and lower the amount of debt we have and also increase our credit score, which is always a good idea as it allows us to get greater access to funds if it ever becomes necessary.
The pandemic has definitely caused infinite amounts of economic destruction. However, if we are ever faced with a similar situation in the future, it would be good to practice the cautions we learned from this experience to better manage our lives and finances.
For more advice on responsible moneylending practices or personalised loan solutions for your financial needs, do reach out to us at R2D Credit today.