Taoke (Business)

Chinoy Financial Advice: What You Need to Know About Emergency Funds

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When I was starting in the financial planning services industry, we were taught to maximize our funds all the time.  Let your money work for you.  Just set aside enough funds for emergency — especially for unexpected situations like the pandemic we’re facing now.

However, in this uncertain time when our investments are still tied up and/or in the negative, we shouldn’t withdraw the funds.  If you badly need it and withdraw or pre-terminate, you may incur losses.  That’s why whenever there’s a financial crisis, people say that “Cash is King.”

Why is cash king?

Cash is king because you have the liquidity to use the money for whatever emergency arises in the family.  It could be loss of work, Seng Di is bad, or sickness. On the other hand, cash can also be used when opportunity arises in the market. It can be a new investment fund opportunity, new products for your Seng Di, or cheap property acquisition.

For the Tao Kes who were liquid during the pandemic, they didn’t seem to experience difficulty with their cash flows and they were even able to thrive in the crisis.

I encourage you Chinoys to start accumulating funds. Start with 20% of your income set aside for emergencies.

But if you can do more than that, why not?  That would be better. We don’t have much expenses during this time anyway.  No gimmicks, no travelling abroad, no shopping — except online shopping.

This excess disposable income can be the start of your emergency fund.

Set a target amount on how much emergency funds you want to accumulate.

How much is enough?

Pre-COVID times, it should be around 3 months of your monthly operating expenses if other members of your household are also earning.  But if you’re the sole breadwinner of the family, you need to set aside around 6 months of your monthly expenses.  Now during uncertain times, you might need to double it.


Need more financial advice? We let you in on the most effective way to teach your kids about money here. We also share the secret to getting a private hospital room amid the pandemic in this article. For the vital steps to be financially ready for 2021, you can read on here and for the best financial advice on what do with your ang paos, check out the article here.


About the author

Sheila Ong is a legacy architect.  She helps Chinoy families plan and design their financial homes by not only creating a strong financial foundation but also peace of mind, allowing families to do what matters most, which is to have more time to spend with each other. It’s her passion to empower each Chinoy family to create a legacy of love from one generation to the next through proper wealth management. As a naturally shy person, she evolved into becoming a public speaker driven by her advocacy. She has transformed many lives, including the lives of her team of financial advisors and the lives of about 400 families who are now financially secure.  Sheila also values family time as she is a full-time mom to her son.

If you want to know more, you may send her an email at sheila@legacyoflove.info. For more information, you may also check out her website, https://legacyoflove.info/ and Facebook page, https://www.facebook.com/legacyoflovewithsheila/.

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