Financial Crisis: A Guide On How To Overcome

Key Points

  1. A financial crisis causes huge damage towards the society economy.
  2. There are 10 tips on how to overcome the financial crisis.
  3. A good financial habit reduces stress caused by money.

Financial issues and challenges happen to everyone almost every single moment, and the stress and worry can get to you. The start of Covid-19 pandemic caused not only health issues in society, but also financial issues.

The impacts of COVID-19 on Malaysia’s economy can be seen via high unemployment rate and depreciation in Malaysian Ringgit against USD. The unemployment rate had increased to 4.8% in December 2020, compared to 3.3% in 2019, according to the Department of Statistics Malaysia (DOSM). Although the unemployment rate dropped to 3.9% in May 2022, it doesn’t change the fact that many Malaysians lost their jobs during the pandemic. In April 2022, Malaysia government removed Movement Control Order (MCO) and all the businesses were allowed to operate as usual.

Just when we expected the financial situation to turn better, war occured. The Organization for Economic Cooperation and Development (OECD) warns that the world economy will pay a “hefty price” for the war in Ukraine. This includes weaker economic growth, stronger inflation, and potential long-lasting damage to supply chains.

Another bad news? Malaysians are facing the highest rate of converting US dollars to Malaysia Ringgit (MYR), which is 1 USD to 4.4584 MYR on 27 Jul 2022. Therefore, increasing the price of certain products too. With the bad financial situation in Malaysia nowadays, what can we do to overcome the financial crisis?

What Is The Financial Crisis?

The financial crisis is characterized as any circumstance where at least one critical monetary resource – like stocks, real estate, or oil – out of nowhere (and generally out of the blue) loses a significant measure of their ostensible worth.

Are There Any Tips To Overcome Financial Crisis?

We have compiled 10 useful tips for you on how to overcome the financial crisis. Let’s have a look!

Identify The Issues

Although we mentioned that the financial situation nowadays is bad, it doesn’t mean we should 100% blame the world for it. To overcome a financial crisis, first we must identify the main issue that caused it. It might be caused by either internal or external factors.

External factors such as natural disasters, war, and economic recession can cause instability in a country’s currency and affect its citizens’ ability to access credit and other essential goods and services. Internal factors such as poor financial management, bad habits can also lead to financial crises. In either case, it is important for you to understand the root causes of the issue so that you can develop appropriate solutions.

Start A Budget

Starting a budget is the first step to taking control of your finances. A prepared budget will help you see where your money is going and how you can make changes to save money. It can be helpful to use a budgeting tool or app to get started. However, it’s important that your expenses aren’t just guesses, they need to be precise and reflect reality. If you spend RM100, you should remember that you had spent RM100, not RM98. If you are afraid to forget, get a receipt every time you spend your money or record it on your phone.

A budget is a great way to help keep your spending in check. It will guide you through your expenses, so that you can see where your money is going and how to best allocate it. In this way, you can use your money more efficiently and solve any financial problems you may be experiencing.

Change Your Spending Habit

One of the best ways to overcome financial problems is to determine your priorities and change your spending habit. Some people might have clear-cut financial priorities, such as paying rent or mortgage, while others may prioritize saving money for a rainy day fund or retirement. Whatever your priorities may be, it’s important to develop a plan and stick to it in order to get yourself back on track financially. For example, if you want to purchase a laptop, consider getting a second hand laptop rather than a brand new laptop.

There are a few easy ways to reduce your expenses, which in turn can free up more money for savings or other important goals. Review your regular spending habits and see where there might be room for cuts; even small changes can add up over time. For example, if you are able to live without an aircond, you might choose not to open it when not necessary. This will help reduce your electricity bill monthly.

Do Not Use Future Money (Credit)

Credit cards are definitely convenient tools to have in your financial toolkit, but they can also make it harder to track your expenses. With a credit card, it’s all too easy to overspend if you’re not careful. So if you want to stay on top of your budget, be sure to keep track of both your debit and credit card transactions! It is recommended that you spend with the cash you have, therefore you are able to keep tracking the expenses you have used over days.

Avoid Taking Debt

Debt can be a very dangerous thing. It can quickly spiral out of control and before you know it, you’re in over your head. The best way to avoid this is to live within your means. Don’t take on additional debt unless you absolutely have to. Even if you have to, just make sure you have enough money to repay your balance each month. If you can’t afford something, don’t buy it.

In addition, be sure to budget for other debts such as student loans and car payments. By being mindful of your spending and planning ahead, you can avoid getting into financial trouble. There are plenty of other things in life that are more important than material possessions. Live for today, but also plan for tomorrow. You’ll be glad you did!

Be Realistic

It is important to be realistic about your current financial situation. This means looking at your income and expenses and seeing what you can realistically afford. Don’t overspend or take on more debt than you can handle. Instead, work on creating a budget that will help you get your finances under control.

Do not make yourself look fat by slapping your own face! Do NOT pretend to be rich when you are not. Sometimes, dignity was not worth a single penny during the financial crisis. If you cannot afford, do not afford it.

“ Can anything worse happen to those who are trying to look rich when they learn the truth? They buy expensive, so-called high-status beverages because they need to tell people they are superior. They want so badly to do what the glittering rich do with their money. But then their trash collector’s revelation dampens their enthusiasm ”
Thomas J. Stanley

Acting rich will not bring happiness, instead bring shame if you can’t afford to maintain a high level of living.

Find And Increase Income

This is very important as money will not drop from the sky. If you are unfortunate to lose your job or any source of income during the current situation, you need to get another job or self-employed as soon as possible.

Some might think that it is hard to find a job nowadays, instead there are dozens of vacancy slots available. You can find them through platforms such as Facebook, Jobstreet etc.. Also, consider self-employment. It might be a more challenging task compared to job hunting, but it might be worth your time! A former flight attendant now turned chef, started his own business by selling affordable but delicious burgers (Source: CNA).

Consult Any Financial Advisor

A financial advisor can help you with a variety of financial problems, from creating a budget to invest and save money. They will work with you to create a plan that meets your specific needs, and they can provide advice on how to best manage your finances. If you’re struggling with debt or other money issues, talking to a financial advisor may be the solution you need.

Some financial advisors might consider debt consolidation. Debt consolidation can be a great way to get your finances in order. By consolidating your debts, you can simplify your monthly payments and potentially save money on interest rates.

Improve Your Credit Score

There are a few things you can do to improve your credit report. First, make sure that all of your information is accurate and up-to-date. If there are any errors, dispute them with the credit bureau. Also, make sure you’re paying your bills on time and keeping your balances low. These simple steps will help improve your credit score over time.

Maintain A Good Financial Habit

Adapt is easy but maintaining is hard. Good financial habits are key to a healthy financial future. Make a budget and stick to it, save your money, and invest in yourself by learning about personal finance. These habits will help you stay on track financially and reach your goals. Practice your financial habit every moment to maintain it.


Money is one of the most important things in life. It can provide security and comfort, and it can help you achieve your goals. But if you don’t have good financial habits, money can also cause a lot of stress and anxiety.

Here are small summary for maintaining good financial habits:

    1. Create a budget and stick to it. When you know how much money you have to work with each month, it’s easier to make informed decisions about what spending is necessary and what can be cut out.


    1. Don’t buy impulsively. If you see something that you want but don’t really need, wait a few days before making the purchase. Chances are, by then you will have realized that you didn’t really need the item after all!


    1. Invest in yourself. One of the best ways to improve your financial situation is to invest in yourself by taking courses or learning new skills that will help increase your earning potential down the road.


  1. Live below your means. It may be tempting to live up the good life when everyone around us seems to be doing well financially, but living beyond our means will only lead us further into debt. By comparison, living modestly allows us more breathing room financially so we aren’t as stressed about money matters.

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