It is almost two weeks since the announcement of the lockdown. Fear and uncertainty are in the air. How are you holding up? I hope you are all safe and sane, and still productive and compassionate members of our society.
To those who are now experiencing cashflow problems due to significantly decreased or no income, coupled with higher expenses due to covid-19 pandemic circumstances, this is the time when you are either thanking yourself for having set aside your emergency fund, or cursing yourself because you failed to set it aside.
On the political front, congress just voted to grant the president emergency powers to respond to our existing crisis. You may either be in favor of it or against it. Among the people I asked for sound opinion in the matter is former congressman Erin Tañada. (His concise stand can be read by clicking this link.) I will not discuss the merits and the flaws of the bill but I will discuss some similarities between these two “emergencies.”
Similarities between Emergency Funds (EF) and Emergency Powers (EP):
1. You should only put your EF/EP in someone you trust. You put your emergency fund in a bank or other financial institution that you trust. In the same way that you trust that your money will be safe in your chosen financial institution, allowing you to sleep well at night, you can only comfortably give emergency powers to someone you trust for you to feel safe.
2. You do not put EF/EP in anything volatile! Even as we always say that the stock market is the asset class that gives you the best return in the long run, we never tell you to put your emergency fund in it because it is volatile. In the same way, emergency powers should not be given to someone with volatile disposition. Need I say more?
3. Time frame. It is interesting to note that the proposed bill states a period of three months, the same minimum level of expenses we suggest for those earning regular income.
4. The importance to safeguard EF/EP. Inasmuch as you safeguard the use of your emergency funds for real emergencies, we should also safeguard the use of emergency powers.
5. Learn from history. It is always best to learn from what has happened in the past in order to avoid making the same mistakes. I’m sure those who were already working when we encountered devastating market, economic, health, and political crises used their experiences as their motivation to always have an emergency fund. Our parents and grandparents who lived to experience the war have kept the lessons to always have something set aside for worst case scenarios. When it comes to those who are still stubborn about not having this essential fund, let this COVID-19 pandemic be your “history lesson” for your future. Remember the pain, the fear, and anxiety that you have now so that you will vow not to experience it again. When it comes to emergency powers, let our dark Martial Law days be our history lesson of how absolute powers can be abused. It is sad that unlike other countries who learned from the pain of their abusive despots, we seem to have not learned the lesson at all. In fact, some still insist that said regime was the golden age. This is pathetic.
6. It should not be “too easy” to access. Yes, emergency funds should be easy enough to access but cash equivalent to up to six months of your expenses should not be lying around in your ATM accounts or under your mattress. You don’t want to be tempted to dip into it each time you encounter a quasi-emergency situation. As we always say, “A sale is not an emergency.” In the same vein, emergency powers should not be dipped into so easily.
7. Is it necessary? It is important to answer this question honestly before we dip into our emergency funds or emergency powers. To those who are still receiving their salaries as usual with no extraordinary expenses, is there any need to dip into your emergency fund? If you can still use your regular cashflow then use that available resource. In the same vein, if the existing powers of the government have not yet been exhausted, is there any need to have these emergency powers? Having way too much cash in your accessible ATM account is prone to abuse. Isn’t this the same as having too much powers in the hand of someone?
I hope that the powers to be given to the president will be crafted in such a way that they will really be used to benefit the country as a whole and not abused, or used for the benefit of the few. I am appalled by the list of politicians who got themselves tested for the virus even without symptoms, displacing others who are more in need of that scarce resource, causing some, including our health workers, to die!
Food for thought:
Yes, there are similarities between emergency funds and emergency powers, but what bothers me is the difference in the way these two make me feel right now. While the presence of the former makes me feel safe, the presence of the latter makes me feel unsafe. How about you? I wish you all the best in coping with this ongoing crisis. God bless us all.
1. For this Friday’s FQwentuhan, we are showing a shorter and edited version of our #SundayFamDay last March 22, 2020.
2. How are you feeling with your equity investments these days? Here’s an ebook na pampa-kalma that you can download. ?
3. Due to the declaration of emergency brought about by the COVID-19, the Money and Family Summit will be postponed to July 11-12, 2020. Tickets bearing the original date will be honored. You may still buy your tickets now by clicking here. Remember, not preparing for your retirement is the more common disaster.
4. Mom and Son Podcast – Year 2 Episode 12 (EXERCISE TIME AND ALONE TIME)
In this lockdown era, we still need to take care of ourselves and let our lives carry on despite the pandemic happening all around us. Now that we are almost 2 weeks in this situation, how can we be productive with our time? We talk about the importance of consciously allotting time for exercise and time to spend with one’s self. We have been dealt a tricky hand during these days, but we still have the option on how to play these cards. Don’t forget to wash your hands, practice social distancing and join our conversation (remotely) by streaming this episode now!
Originally uploaded on Anton Fausto’s YouTube channel: https://youtu.be/d68MmduKqtU
FQ Mom link: https://youtu.be/dXmHPEnie1Q
5. If you want to include better Financial Health for 2020 and the new decade, take the FQ Test now. Click link. http://rebrand.ly/FQTest
6. Have a healthy relationship with money, start by reading FQ: The nth Intelligence and sharing the lessons with your loved ones.
Rose Fres Fausto is a speaker and author of bestselling books Raising Pinoy Boys and The Retelling of The Richest Man in Babylon (English and Filipino versions). Click this link to read samples – Books of FQ Mom. She is a Behavioral Economist, Certified Gallup Strengths Coach and the grand prize winner of the first Sinag Financial Literacy Digital Journalism Awards. Follow her on Facebook & YouTube as FQ Mom, and Twitter & Instagram as theFQMom. Her latest book is FQ: The Nth Intelligence.
Photos from freepik.com, modified and used to help deliver the message of the article.