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Preparing to Deal with Financial Setbacks

In this article, we share how to prepare for unexpected (or rather, untimely) expenses that might disrupt your budget.

Not all cases of having debts are due to lifestyle choices. Unexpected events can happen to people, and even anticipated expenses can catch us off guard when we least expect them. For example, nobody could have foreseen that the pandemic would cause many working adults to suffer significant reduction in income and led to many businesses to fold.

Aside from such an extraordinary event, markets and economic conditions are also subject to fluctuations. As we've observed over the last year, many workers in the technology sector faced sudden layoffs.

Consider the following situations: A working couple may have bought their home and have their mortgage serviced mainly by CPF contributions. When one spouse’s CPF contributions stop, it can lead to financial strain as the shortfall needs to be covered either by utilising previously accumulated CPF savings or using cash. Meeting existing debt repayment plan and essential needs such as groceries, utilities and mobile phone bills can become increasingly challenging. This may lead the family to consider taking quick loans from moneylenders.

But stop. Take a pause, breath slowly and consider the following three things you can do.

 1. Review your budget: Review your expenses and adjust your budget to prioritise essential needs. Cut back on non-essential spending and focus on covering necessities first.

 2. Seek financial assistance and help services: A good place to start is to explore to find support schemes and services.

- For example, you can find out more about ComCare Short-to-Medium Term Assistance (SMTA) which offers temporary financial assistance. Even if your income exceeds the stated guidelines, you can still approach a Social Service Office (SSO) for assessment if you face financial difficulties.

- Another option is to consider the Skills and Training Advisory Services, where you can receive personalised advice on your skills and training needs through one-to-one consultations with Skills Ambassadors. This can help you find relevant courses and various assistance schemes to enhance your skills and help you stay relevant and employable in the workforce

 3. Manage your debt actively: You may find yourself struggling to make ends meet and make payments due for credit card and loans.

- The immediate thing to do is to stop using your credit cards and avoid tapping into your credit lines to prevent accumulating more debt.

- Next, consider speaking to your banks or creditors to discuss your situation and ask to explore potential repayment arrangements.

- It is very important that you reduce discretionary spending, which brings us back to our first point of reviewing your personal and household spending.

I’m sure that you have heard of the phrase "make hay while the sun shines".

This is a wise saying that encourages taking advantage of favourable conditions and opportunities when they are available.

When it comes to personal financial management, this means that when your financial situation is relatively good and you have some extra income to spare, you should prioritise building an emergency fund.

This fund acts as a financial safety net and provide some stability during temporary setbacks by covering essential expenses. You can tap on this fund to pay for food, phone and utility bills, without resorting to high-interest loans or credit card debt.

If you haven't set up your emergency fund yet, consider kickstarting it by allocating a portion of your year-end bonus into a separate account. You can find a comprehensive guide on establishing your emergency fund (

Life can be highly unpredictable, and unforeseen events may disrupt your ability to meet financial obligations. By following these simple steps - reviewing your budget, seeking assistance from help agencies, and actively managing your debts, you can better equip yourself to navigate life's challenges.

If you are facing increasing difficulties servicing payments to your credit cards or other unsecured credit facilities, consider attending our weekly Debt Management talks (conducted both over Zoom and in-person at our office), where you will learn more about what to do, when and how to communicate with creditors, what are the common collection actions creditors can take, what are the various debt settlement options are and what is the CCS Debt Management Programme. Click here for schedule.

After attending the talk, you can submit a request for one-to-one credit counselling. Details on the counselling session and instructions on how to arrange for an appointment will be explained during the talk.

Credit Counselling Singapore

Published 3 November 2023.