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The Covid-19 pandemic has impacted many industries, and the subsequent lockdown has caused much distress to people across the globe. The economies across the globe have taken a hit, and it has left uncertainty in people’s minds with respect to their finances. In this article, we will discuss financial planning amid this crisis situation.
Adopting the following methods can help you in maintaining your finances in these times:
You could have had a budget in place before the Coronavirus, but the pandemic and the subsequent lockdown might have impacted your income. You could be going through pay cuts at your work or could have been sent on unpaid leave. If this is you, then consider altering your budget. You would require tightening the budget so that your funds can meet your expenses.
Save as much as possible, especially in times such as these. These are unprecedented times and unpredictable also. Therefore keep an emergency fund and avoid expenses that are avoidable.
In case you are confused about how to do financial planning amid this crisis, then it is advised to consult a financial expert. Don’t take hasty decisions on investments but first consult an expert who will guide you in making sound financial decisions. You don’t want to fret once you have made a bad decision with your finances. Therefore be wise, and it will help you in sailing through these times.
We all know that many of us are facing issues related to delayed income and pay cuts, but as much as possible, try to make at least the minimum debt payments by their due dates every month. If you use credit cards etc. then don’t delay in making its payment.
Delayed payments or missed payments can impact your credit score therefore, pay on time so that it doesn’t affect your score. Even if it requires you to pay the bare minimum to your creditor, repay on time. It will help you in achieving a good credit score.
In case you are unable to repay your bills in time, then don’t shy away from getting help. Contact your creditors before missing a payment and see if they can help you out. Check with your creditors if they have any policy for affected people.
You can also take the help of credit counselors to manage your existing debts. They can provide practical and efficient debt management solutions.
The Covid-19 like situations are emergency situations where prior preparedness is the only way out. Do make sure that you have appropriate health and term insurance cover. Research about insurance covers that fits your need and requirements. Check its health coverage benefits and know how much it will cost you during your illness. If required, increase the premium amount by taking more coverage. It will help you with health related emergencies. Make a proper assessment and take adequate health coverage for your family.
The following points should be considered in order to invest wisely:
In times such as these people become vulnerable to make panic driven decisions which can cause much damage. Therefore be it a fresh investment or a liquidation, let information and clear head thinking lead you. Buy new investments in case it is in line with your financial goals.
When you invest, make sure that each investment is earmarked to a particular goal. Always align your existing or new investments to clear goals defined with the time left, monthly contributions required, and returns expectation. Setting a goal will help you in finding the right investment instrument, managing liquidity, etc.
Your assets like deposits, mutual funds, bonds, gold, real estate, etc. must be selected in the appropriate proportion to your life goals, return expectations, income, and liquidity needs.
The Covid-19 pandemic has taught many of us the significance of financial planning. You must check your portfolio today. Those investments that don’t align with your goals need to be reconsidered.
You should continue with your SIPs and don’t do panic withdrawal. This is because you don’t know what happens in the future. Therefore in order to remain financially stable, save your money by continuing your SIPs and long term investments. Due to the high volatility in the market, you may want to redeem your investments, but it is highly recommended that you don’t redeem your investments in a panic because of the market.
Gold is more preferred during any economic crisis such as these as it moves counter cyclically. However, consider investing in dematerialized gold to avoid making charges, GST, and concerns over making charges. You have options such as sovereign gold bonds, gold ETFs, gold mutual funds, and digital gold.
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