• Be prudent. It is always better to be safe than sorry. Whether you have any income loss or not, this will be the golden rule as sufficient cash is vital to maintain basic living necessities for you and your family.

• Only spend on necessary expenses and cut off any unnecessary spending in this time being, especially if you are suffering from a salary cut or decreased revenue.

• If things were to turn better in the future, well then you can start to spend on what you wish to, but if things were to turn worse, at least you have enough cash to sustain.

• If you have always been recording and keeping track of your cashflow, great job! Please continue to do so. But if you have not, this is the best time to start!

• Use an excel spreadsheet to categorize you expenses and see where you are spending your money

• Set a cap to each category and FOLLOW STRICTLY

• So the next question will be, how am I supposed to know whether my cash flow is healthy? This is a subjective matter and does not have a compulsory benchmark as it differs with a person’s financial situation and dependents that they have. If you wish to have a more accurate advice you may engage with us, while in the meantime we given a generic method to measure, not as accurate, but it will be easier. If you fulfill both of the criteria, you are safe to go, failing any of the 2 you will need to promptly relook into your cash flow and make adjustments for healthy financial management.

• 20% surplus after deducting all necessary expenses

• Sufficient emergency fund to sustain 3-6 months living cost (we will talk about this in detail later)

• Emergency fund is a certain amount of cash that is used to support unexpected events that require a lump sum of money.

• Here we have categorized 2 types of emergency fund, minor and major emergency.

• For minor emergencies, we will need at least 6 months of your income to be kept in cash. It is meant to be used for unscheduled events like car repair, replacement of gadgets, temporary loss of income/job that are still not devastating to our assets. For self-employed individuals, it is recommended to have at least 6 months of your income as to cushion any fluctuations in revenue as a healthy financial management.

• Cash for minor emergencies are recommended to be placed in instruments that is capital guaranteed, offers high liquidity (able to be withdrawn with 24 hours) and still able to provide some interest while the cash is kept there. Most of us would always think of fixed deposits as our tool for emergency fund, yes, no doubt it suits the profile, while there are some alternatives that we can look at to diversify it as well. Tools like money market are a very suitable tool for this purpose too. Though it is not often heard, it still often has higher interests, offer daily rest interest, lower capital and higher liquidity, than fixed deposits. While for corporate usage to keep cash, money market has a higher advantage as it is TAX FREE.

• While for major emergencies are situations where the amount of cash will not be sustainable to cover, even it is sufficient, it is not meant to clear up a big portion of your cash solely for this purpose. Unfortunate events like accidents, illnesses or any loss of working capability due to the mentioned reason are something that people often forget. Taking advantage from insurance planning may just save you from burning a hole in your assets or having the possibility to increase your loans. This part of the planning will be explained further in details later part of this post.