Winter is coming…
And just like how Singapore is a year-round summer island sparred from natural disasters,
Singaporeans have been experiencing a cushioned impact from global issues plaguing the world today.
On May 1, 2022, PM Lee said that there may be a recession in 2023 or 2024.
You might’ve already felt the impacts of rising costs of living or heard of longer hiring freezes, even at big corporations such as Meta and Google.
Coupled with the Russia-Ukraine war, supply chain disruptions and a host of other bulls*** that has been going on lately, many indicators point to a recession in Singapore.
In my opinion, a global recession is not a matter of if but a matter of when,
And it might come sooner than we expect.
We’ve already been through the Covid-19 pandemic, and we’ve seen how being prepared can help us fare much better.
So here is the ultimate guide to preparing for and surviving a recession in Singapore.
TL;DR: Surviving a recession in Singapore
Recession 101: What It Means & How to Wing It
The Big Picture
A recession is basically the economy’s polite way of saying it’s having a stubborn mood swing. Think of it as a period when:
- GDP takes a nosedive
- Job‑search lines get longer than a queue at a midnight pizza joint
- Retail sales shrink faster than a phone number on a 99% discount banner
- Income and manufacturing stats squeeze back like a stubborn ketchup bottle after a long break
These trends are stuck around for a while, not just a one‑off blip.
Ready? Here’s How to Get Your Life Back in Gear
- Trim the Salary‑Spending Hot‑Spots: Pay off credit cards, stop splurging on the latest gadgets, and give your budget a power‑up. Your phone will thank you.
- Build an Emergency Nest Egg: Aim for at least 3–6 months of living costs; if you can, push that to 9 months because who likes surprises?
- Lean on Diverse Income Streams: Part‑time gigs, freelance work, or a side hustle can cushion the burn if your primary job becomes a ghost town.
- Stay Mentally Sharp: Economic downturns can feel scary, but keep your head on a swivel. Read up on market trends, practice good data habits, and keep the optimism flowing.
- Keep Learning & Networking: Attend webinars, join communities, and polish your skills—make yourself the most versatile version of yourself.
- Plan, Review & Adapt: Your financial map needs frequent updates. Recalibrate your budget, cut down on non‑essential expenses, and keep a watchful eye on any new opportunities that might pop up like a mystery chest.
By staying proactive and flexibly adjusting to the shifting landscape, you can surf the recession wave instead of getting knocked over.
1. Clear your high-interest debt first
Give Your Budget a Breathing Break
Got a pile of debt on your plate? Let’s tackle it before it turns into a monster you can’t swallow.
High‑Interest Heaven—A Nightmare
- Credit cards dragging at over 20% interest are the quickest route to a debt avalanche.
- Interest rates are rising, so every month is a bigger chunk in your pocket.
Clear the Deck Before Adding New Cards
Before you sign on for a car loan or any other liability, pay down what’s already due. The sooner you hit it hard, the less waraging you’ll feel.
Homeowners: Re‑Weigh That Mortgage
Own a house? If rates are hot, now’s the moment to consider refinancing. Dodging those rising rates can turn up your monthly flow.
Act or Be the Gudetama
Picture Gudetama—the lazy egg—choosing to do nothing. That’s exactly what happens when you ignore debt. Little by little, those charges get a compound‑like payload that hits you with the force of a truck.
Take charge now; your future self will thank you—no chicken‑egg drama required.
2. Build up your emergency funds
Like all economic crises, we have to prepare for the worst.
In this case: The possibility of retrenchment.
As a rule of thumb, it’s recommended that you have at least six months’ worth of living expenses saved up for a rainy day.
This will give you enough time to search for a new job to replace your primary source of income.
That said, recessions typically last more than 11 months, so if you want to be extra safe, try going for 12 months worth or more.
Keeping Your Emergency Cash Fresh and Fast
Everyone’s got an emergency stash. The trick? Make sure it’s liquid—ready to bubble out in no more than five days.
Beyond the Classic Savings Account
- Cash‑Management Accounts: These nifty options toss you higher interest, but they’re a bit less snappy when you need to grab your money.
- Spot Trade or Money‑Market Futures: A tad riskier, yet still low‑risk—great if you crave a slight bump in returns.
Why It Matters Right Now
The world’s turning a bit topsy‑turvy, so it’s smart to have the spare
Emergency Food Supplies (Just a Little)
Don’t go overboard hoarding, but having a few non‑perishables on hand helps you keep calm. Think of it as a “not-just-an-atmosphere” emergency kit.
Bottom line: Keep it liquid, keep it simple, and stay prepared—without the crazy bottle‑capping frenzy.
3. Identify ways to cut back on your spending
The key to surviving a recession is to minimise your expenditure.
Go through your monthly expenses and identify items that are necessities as well as stuff which are discretionary.
Basically, you’ll want to differentiate between your wants and needs.
If you have some time to spare, consider going through the Seedly Money Framework for a more holistic approach to your finances.
4. Live within your means
Whether we’re facing a recession or not.
It’s always good to live and spend within your means.
If you can keep your expenses as low as possible, this allows you to have more to save and invest for your future!
Generally, if you have to choose between a high SES or a low SES option, it’s wiser to go for the one that you can afford comfortably.
So when you’re in a pinch and have to cut back, you won’t feel a need to make a drastic change in your lifestyle.
While we can treat ourselves once in a while, we must remember that desperate times call for desperate measures.
So it’s important to not splurge frivolously during this period and always live within your means!
5. Focus on the long-term
Hold Your Horses, Stock Market Adventurers!
Picture this: you, me, and a world where the green color of the market has taken an extended vacation. The S&P 500 has been doing a 19% nosedive year‑to‑date, and it’s tempting to get in the car and drive straight to the exit.
Feel the Beat?
- Every investor who’s still strapped in feels the same gut‑wrenching drag.
- The sea of red looks scary, like a storm you’re trying to brave across.
- That low‑down voice inside screaming “sell it now!”? It’s louder than an alarm clock on a Sunday morning.
What to Keep in Mind
Step one: Pause. Take a breath. I promise it won’t hurt – it’s just a short inhale and exhale.
Step two: Reassess. Check your goals, your timeline, and don’t let the market’s mood swing decide your fate.
Step three: Commit. If the playbook you drafted says to stay, oh yeah, stay. The stock market is somewhere on a long, wild ride, and you’re not going to know the upcoming turns just by looking at yesterday’s chart.
Bottom line:
Messy markets do give us a confidence‑shaking pulse, but panic‑selling is a risky move that almost never pay off. Hang in there – the waves will lift eventually.
Hold Tight – The Market’s on the Upward Curve
Even if the recent dips feel like a dodgy roller‑coaster, trust that the long‑term rides are going to be smooth and thrilling.
Why You Don’t Need to Be in a Panic Mode
- Backed by strong fundamentals: Pick companies built on solid footing and they’ll spring back faster than a rubber ball.
- Know your risk style: Gauge your comfort level with volatility and tweak your exposure to stay in sync with your personal risk appetite.
- Keep the big picture in focus: Short‑term bumps are just part of the journey—get your eyes on the horizon.
Remember, a steady strategy and a bit of patience keep the markets in your favor.
6. Continue learning and upgrading your skills
Why Singapore’s “SkillsFuture” is Your Secret Superpower
Ever felt that moment when the office buzz gets a little louder and you think, “Is this the end?”
Singapore’s top-down initiative, SkillsFuture, is a reminder that the trick isn’t to dodge the storm—it’s to learn how to surf it.
1. Lifelong Learning = Lifelong Protection
- Recession-proofing isn’t a fancy buzzword—it’s the very essence of staying ahead of the game.
- Every new skill you pick up is a little armor against the inevitable ups and downs of the job market.
- Think of it as upgrading your personal software: the more features you have, the fewer bugs your career can encounter.
2. Flexibility = Freedom
- When you become a more valuable employee, you’re not just chasing a job; you’re opening doors.
- Every skill stack you build is a passport to a wider range of positions—yes, even the ones that were previously out of reach.
- With a strong cushion of competence, the fear of layoff turns into a rational statistic rather than an emotional panic.
3. Your Options Matter
- Keep learning, keep improving, and you’ll always have a strategic fallback.
- Even if one chapter closes, your skill array allows you to jump to the next chapter without missing a beat.
- In short: the fewer skills you lack, the fewer gaps you’ll face.
So, if a downturn is looming or you simply want to stay “employed,” remember: the more skills you possess, the better your safety net. Stay curious, stay proactive, and let SkillsFuture fuel your unstoppable journey!
How do you survive a recession?
Singapore has already survived the 2008 recession and, more recently, the Covid-19 pandemic.
While it is imperative to prepare for a recession, not everything is doom and gloom as we have gone through this before.
So let’s keep our heads strong and work through this together as a community and as a nation!
ALSO READ: Singapore’s GDP grew 7.2 per cent in 2021, rebounding from recession in 2020
This article was first published in Seedly.
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