The year 2023 is supposed to be one of caution and financial prudence. According to Bloomberg, this is the most “anticipated” recession ever, with many economists saying that there is little chance of averting a slowdown as the impact of higher interest rates begins to bite.
We have been told to gird ourselves financially and tighten our belts as the outlook turns grim. Personal finance experts have listed their top do’s and don’ts in a recession that usually espouse savvy budgeting techniques and staying liquid to ride the downturn.
While it is important to heed these lessons on frugality and aggressive savings, it is also vital that we recognise our own humanity in the face of financial restraint and hardship.
Here are three ways we can show ourselves a little kindness during these turbulent times, and why it matters, too.
Cut yourself some slack
The last few years have not been particularly kind. In fact, they have been so brutal that a new term — “permacrisis” — was coined and even declared 2022’s word of the year by Collins Dictionary.
As the world reels from one global crisis to the next, a little goodwill and allowance, especially for ourselves, can go a long way.
We all have big financial dreams and goals that we want to achieve: for example, being a millionaire by 30, choosing to freelance or finally paying off our mortgage. But, sometimes, life happens (like Covid-19) and we have to either shift these goalposts or even scrap them altogether.
Some of us might even need to start all over again to rebuild our savings as our businesses crumble.
But that is okay. Because perfection, even financial perfection, does not exist.
We are all imperfect and highly emotional beings with sometimes irrational needs. And there is never going to be a moment when all facets of our personal and financial lives align.
There will always be ebbs and flows in the market, posing challenges of volatility to our investments. There is always going to be tension between the limited resources that we have, such as time and money. Our income and expenses will inevitably go out of whack in certain months.
And that is still okay. Because, even in the financial realm, what matters most is progress, and not perfection.
Pace yourself by taking consistent and gradual steps towards reaching your goals. But, remember also to glance every so often in the rear-view mirror to see how far you have come.
Recognise your worth
In modern life, many of us define our self-worth and identity through the different roles we play in society, and the things we own.
We rely on the opinions of other people, such as our boss, and crave for their acceptance to validate our sense of self. Similarly, our possessions and assets are supposed to provide us with some grand measure of how worthy we are in the world.
To then find yourself suddenly without a job or income can be paralysing, to say the least. A wave of job cuts has already swept through the US, with major tech companies such as Salesforce, Meta and Twitter laying off staff.
Our self-worth is not tied to our financial status or the jobs we hold, though. We are so much more than the figure in our bank account or where we spend 10 hours every weekday.
Our true measure is a messy amalgamation of our collective fears, strengths, interests and inner qualities that make us who we are.
Losing your job or getting a pay cut neither changes any of that nor debases your esteem and abilities.
Similarly, your value in society and to the ones close to you spans more than just how much you can give financially. It is also our time, attention and other selfless acts of service that make us truly worthy in the eyes of others and, importantly, ourselves.
Celebrate your wins
At the start of the year, I broke the first cardinal rule of what not to do during a recession — spend unnecessarily.
I indulged myself with a little “treat” after a gruelling two-year rebranding exercise by flying business class (my first time) to Penang and I also got myself some new music paraphernalia from Amazon.
The spoils were a three-CD box set of alt-rock queen P J Harvey’s rarities album as well as the autobiography Surrender penned by U2 frontman Bono.
It is hard not to develop a little money guilt, especially when I have been constantly reminded by fund managers or news reports that a global slump is under way.
Rewarding ourselves should not have to feel like a guilt trip, however, even if we are might be going through challenging times.
Covid-19 has shown us the importance of self-care and celebrating the little moments and achievements that we take for granted. Burnout is real, and many of us were close to reaching our melting point as we got pulled in every direction.
Always remember that we can give only when our own cup is full.
Sleep, rest and other generous acts of self-care can help us reset and reorient to take on new challenges.
Of course, not all rewards have to be hedonistic pleasure pursuits. The key is to mindfully indulge in and to acknowledge your own corporeal and spiritual needs as a living, breathing person.
It is anyone’s guess just how deep or protracted this recession will be. The rampant rise of interest rates and unwinding of stimulus largesse will have lingering consequences for both businesses and consumers.
In this regard, cultivating stoic financial resilience and strict spending habits will be crucial to coasting through the capricious nature of economic cycles.
But even austerity has its limits. Self-deprivation can lead us down a bitter path of resentment and literal exhaustion that can drain us on a soul level.
Hard does not always mean good; and more pain does not always make you stronger.
Through positive affirmations and acts of self-kindness, I am confident we can not only survive in this recession but also thrive in it, while having a little compassion for ourselves and, hopefully, others.
Lee Sheung Un is an assistant manager of content and communication at AHAM Capital (formerly known as Affin Hwang Asset Management). A millennial, he is still seeking a balance between wealth, purpose and passion. The views expressed are his own.