Smart Investor Malaysia


6 Tips on Financial Risk Management in the New Normal


It’s been a tough year for the world, and Malaysia is no different with Covid-19 cases rising to a new high from 2,000+ cases to 6,000+ cases daily despite several Movement Control Orders (MCO).

It doesn’t seem that the pandemic is going to end anytime soon, so what’s the best way to manage personal risks in this new normal?

Managing personal risks means being prepared for the worst possibilities that may occur.

It also means that you should ensure that if something unprecedented does happen, it would leave little to no impact on your family finances and well-being. 

Here are six tips on how to manage your financial risks in this new normal:

1. Prepare a buffer of emergency funds

Thanks to the Covid-19 pandemic, the economy has been severely impacted and the unemployment rate is rising. Due to the restrictions set by the government, many businesses couldn’t survive, leaving them with no choice but to enforce pay cuts, retrench staff, or in the worst case scenario, shut down their businesses.

In addition, there are also businesses that are quick to adapt and move towards digitalisation which can often mean that human capital is then regarded as redundant, leading to further retrenchments.

This turbulent time has taught us that anyone can be at stake, which is one of the main reasons why it’s absolutely crucial for us to build up an emergency fund that can last at least 6-12 months.

Having this fund will provide a buffer of cash reserves to help us weather tough times if we are no longer able to rely on our active income or even when we experience pay cuts. It’ll also help us avoid relying on a credit card for essential expenses as a go-to fund will be in place to help us stay afloat.

2. Upskill or reskill to stay relevant

With the increasing unemployment rate, the job market is becoming more uncertain and tough. The supply of labour is now greater since more people are actively seeking jobs.

Thus, it’s essential to always ensure your skills aren’t obsolete and are still relevant. That way, if you’re still employed, your company will see you as valuable and thus increases the chance of job security. 

On the other hand, jobseekers will benefit from upskilling and reskilling as you’ll remain employable and at the same time stand out in the job market. There are tons of free and paid courses to explore online.

You can check out Linkedin Learning, Skillshare, Udemy, and Coursera to name a few, and you’ll be able to upskill and reskill whenever and wherever you are. 

The Employment Insurance Scheme (EIS) under the Social Security Organisation (SOCSO) also provides vocational training to eligible participants who have been retrenched. The training cost will be covered by them and you may also be eligible to receive a training allowance.

In addition to all these, do consider being flexible and open to any job even though it’s not paying as much, as this will not only help you with learning and using relevant skills but will also help to stretch your emergency fund before you land yourself a suitable role. 

3. Reduce the risk of getting infected

The number of cases has shown that the virus doesn’t discriminate or choose its victims. We also know that people who fall under vulnerable categories have a higher risk of getting infected, and it can even be fatal for them.

Regardless of which category we’re in, it’s important to follow the standard operating procedure to reduce the chances of getting Covid-19 and to ensure that we won’t become a carrier to those who are more prone to be infected.

Try to lead a healthy lifestyle; be it in terms of adopting a balanced diet or engaging in physical activity to boost our immune system. It’s easy to opt for a sedentary lifestyle these days, especially now that some of us can work in the comfort of our home without having to travel back and forth to the workplace.

In addition to that, it’s crucial to get vaccinated to prevent you from getting infected with Covid-19, and by doing so, we can also help reduce the spread of the virus. You can register on the MySejahtera app if you’re yet to do so.

4. Be prepared for unfortunate events

As much as we try our best to maintain a healthy lifestyle, we’re all exposed to risks other than Covid-19. Death is inevitable, while total permanent disabilities and illnesses are potential risks in life.

If we’re not prepared for such events, it may leave our family finances vulnerable and possibly break the bank or worse yet, spiral into debt.

These are scary events to think of, but we have to face the fact that not preparing for them is more detrimental. So how can we start? Think about how you would want your money to be managed in these events.

For instance, if you were to pass away, how would you settle your debts and ensure the continued survival of your dependents? This is imperative for parents with minors and those with special-needs dependents.

As for disabilities and illnesses, are your funds enough to take care of this, or is it cheaper to opt to be insured in the first place?

5. Take up financial initiatives by the government 

Since the first MCO, there has been much financial assistance offered by the government to safeguard the people’s welfare as well as to continue stimulating the economy.

While some financial initiatives announced aim to help vulnerable groups and daily wage workers, there are also optional initiatives like the EPF i-Sinar advance facility and loan moratorium where you can defer your loan repayment.

So who should take up this financial initiative? Those with little or no emergency funds, high-interest debts like credit cards and personal loans, at risk of getting retrenched, experiencing pay cuts or retrenchment, or a monthly cash flow deficit should consider taking these up.

Take this period of assistance as an opportunity to reset and improve your financial situation so it’ll be more resilient to withstand any shocks. Having said that, it’s also important to understand the impact of utilising these facilities.

The EIS by SOCSO also offers a job search allowance (JSA) for those who are eligible, and if you do, you can claim this allowance for up to six months. It will be reduced over the period so you won’t be able to fully rely on this, but it’ll certainly help your emergency fund last longer. 

6. Review your investments 

‘Should I redeem my investments?’, is one of the questions I received a lot during this hard time as people are uncertain about the market. If this is what you are thinking of, review your investments and ask yourself:

What is my investment objective for that particular investment?

The objective of investments will determine how long you should stay in the market. A longer time horizon should be able to withstand the turbulence as you’re not going to need the money in the short term.

This is also where the emergency fund plays a role to increase the holding power of your investment and you won’t need to cash out in times of emergency.

Am I able to withstand the ‘roller coaster’ movement of the investment?

If your answer to this is no, you may want to switch to a lower risk profile. This doesn’t mean that you’re exiting the market; it just means that you’re lowering your exposure to high-risk investments and increasing exposure to low-risk investments so you’ll not have to experience as much volatility.

Are my emergency funds enough?

It’s essential to have a buffer of funds prior to any investment. However, different people have different circumstances these days.

If you’ve suffered a job loss, and are currently living on your emergency funds, you may want to have the a final backup plan ie. selling your investment, should you exhaust your funds before you can secure a job. It’s a better option compared to relying on credit cards.

With the current work arrangements, you may also find that you have extra money to invest. If this is the case, regularly saving will help you get into the market at different times and you will benefit from the market dip where investments are on sale!


Being prepared with risks will give us peace of mind that things will be taken care of. A resilient financial situation will certainly help us weather this crisis. If you’re unsure about how to go about your finances and stuck, do seek unbiased professional help. It may be a daunting period but there are also lots of opportunities.

‘Tough times never last, tough people do.’ – Robert H. Schuller

About the author

Nursyahirah Mohd Ghazali (CFP, IFP) is a Licensed Financial Planner. She strongly believes that financial education starts from home and that parents play a huge role in raising financially savvy kids, and that a collective effort from parents in this matter will result in a more financially literate generation, helping to transform Malaysia for the better. She can be contacted at

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