Yesterday, Prime Minister Lee Hsien Loong gave his fourth national address regarding the COVID-19 situation and the extension and expansion of the already stringent “Circuit Breaker”.
Without sounding dramatic, most people would agree that Singapore is facing one of the most challenging periods in her history on multiple fronts.
Containing a pandemic in the community is difficult enough.
Having to quickly scale up care facilities for thousands of people is a feat.
Dealing with an economic crisis amid a global slowdown is a mammoth task.
Having to communicate with millions of people and urge them to change their daily habits can be an immense challenge.
And attempting to do all of that at the same time with no prior precedent can only be described as heroic.
For everyone reading, whether you’re fighting on the medical frontlines, formulating policies on the back end, striving to keep your business afloat and your people employed, juggling family life and work at home, or simply doing your part by staying home – thank you.
On a smaller scale, there might be times in our lives when we are faced with times of financial difficulties, unexpected challenges, and seemingly insurmountable odds. At such times, it might be worthwhile to tackle these problems, the Singapore Way.
#1 Importance Of Fiscal Discipline And Accumulating Reserves
One of Singapore’s key ‘weapons’ against known and unknown threats is the power of the purse.
With reserves that can be deployed at a moment’s notice or slowly tapped on for a long time, Singapore is able to implement policies to keep the economy afloat, assist citizens in tangible ways almost immediately, and make investments to keep the country and her people competitive for the future.
Strong reserves can also play a strategic role, without needing to spend a single cent of it. Other countries are more likely to deal with Singapore knowing that Singapore has the staying power and will emerge from crises stronger. Consumers and companies wouldn’t needlessly panic because they know that Singapore has the resources to take care of her people.
But all of these are only possible because of fiscal discipline over the years to save and invest, while fairly collecting revenues during good years, as opposed to casually providing handouts and tax cuts. During bad times, the accumulated resources are now being deployed to help households and businesses, when they need it the most.
Likewise, in our personal lives, it is prudent to resist the urge to lapse into lifestyle inflation and instead build up a robust emergency fund, while investing for the future.
The assurance that comes from having a personal financial reserve cannot be understated. With financial resources, we will be able to deal with emergencies with composure, while having more options open to us.
After all, when we’re out of a job and have stacks of bills to pay, would we rather be debt-free and have thousands of dollars in cash savings, or memories of many expensive holidays we took many months ago?
Of course, there is nothing wrong with rewarding ourselves, but that should only come when we have our important bases covered. And being able to do so is exactly what fiscal discipline is all about.
#2 Alongside The Willingness To Save, Being Willing To Spend At The Right Time
As we have seen from the initial Unity Budget ($6.4 billion), and subsequent Resilience Budget ($48 billion) and Solidarity Budget ($5.1 billion), the measures to support Singapore households and businesses is substantial. This is not counting about $80 billion in regular spending to fund the various government ministries and non-COVID-19 schemes for the year.
Furthermore, Deputy Prime Minister and Finance Minister Heng Swee Keat has repeatedly said that if need be, the government stands ready to do even more and commit even greater resources to help.
This willingness and decisiveness to spend in support of citizens, companies and the country is also an equally important trait. On the surface, this seems at odds with fiscal discipline. It takes wisdom and a clear understanding of the times to know what constitutes an emergency, and what kind of expenditure is called for.
On an individual level, we need to understand that not having enough money to afford the latest and biggest flatscreen television or wanting to get the latest device that Apple produces does not constitute a valid reason to reach into one’s emergency savings.
Such expenditure should be funded by reducing other discretionary spending or with spare cash lying around after paying for important expenses like contributing to the emergency savings pool or investing for retirement.
However, when the time comes to deal with a family crisis or personal emergency, that is the time when money should be deployed to resolve issues, minimise damages, and alleviate suffering.
#3 The Will And Wisdom To Taking Swift, Decisive Action
Over 7 weeks, 3 separate budget announcements were made. This is because the COVID-19 situation continues to evolve quickly, and with it, the economic ramifications.
The longer it takes before measures are announced and implemented, the more severe the situation will become, and the harder it will be to recover. With this understanding, the government and civil servants worked with amazing efficiency to push out one new initiative after another – and making adjustments and enhancements based on feedback from the ground.
Just as delaying seeing a doctor until our symptoms will result in more pain, more medicines and a bigger bill, by not taking quick action to address our personal finance issues, we could make a bad situation worse.
From missing insurance premium payments, to allowing our debts to snowball, or not cutting losses on a toxic investment – timing is critical when it comes to managing our personal finances.
Towards this end, being on top of timelines and deadlines by which we need to take actions or make decisions is a natural part of adulting and getting our financial life in order.
#4 Holistic Approach In Solving Issues
Even though the budget measures can be seen to be addressing the financial fallout of COVID-19, the government is also well aware that the fight for economic recovery is a multi-front one.
There is a need to battle fake news and attempts to undermine confidence in Singapore’s ability to navigate through these unchartered waters, which impacts investor and consumer confidence.
On the healthcare front, the “Circuit Breaker” is difficult economically and emotionally, but necessary to ensure the outbreak in the community is contained. It is only with a healthy workforce can economic activity resume and then ramp-up.
By working with ground-up initiatives and grassroots networks, the government can ensure policies are communicated to every person, while understanding real concerns and gaps that may exist.
After policies are announced, what comes next is the unenviable task of pushing policies through in the trenches with companies and workers, measuring their impact, and adapting accordingly. A pure policy solution does not exist, and the answer lies in engaging stakeholders and working alongside them.
Likewise, whether we are in debt, managing a drowning portfolio, or wish to manage a ballooning renovation budget, ivory tower theories have limited utility. Solving these issues could mean needing to cut back spending on comfort items, taking on a second job, or waking up earlier to brush up on one’s personal finance knowledge.
Even if you’re the head of the household, or are managing your family’s finances, you can’t just issue a decree and expect your orders to be followed. Speaking with your loved ones about the situation at hand, explaining to them how lifestyle changes are necessary and contribute directly to solving issues, and what the plan is for getting everyone back on their feet will go a long way.
You Too Can Be An Exceptional Model Of Excellence
Witnessing firsthand how the country we call home deals with unprecedented challenges is a rare masterclass in crisis management and long-term planning.
Here’s wishing brighter days come quickly for Singapore and for you, our dear readers!
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