We’re in the middle of lockdown 3.0. You’re at home. You switch on the TV and you see how the end of this lockdown is nowhere near us. You scroll your social media feeds to find out companies declaring bankruptcy. You log in to LinkedIn to read about enterprises cutting down salaries and unemployed professionals narrating their stories. You open your window to see how the world around you is not the same anymore.
While you cannot change anything that’s happening, you can certainly change a few financial habits for good. Here are the 4 things you should to do to survive this pandemic without any financial challenges.
Expenses < Savings
The Work From Home and Work For Home lifestyle has surely taught us a lesson that we don’t need plenty of money for living our life. We need money for an elevated lifestyle. The lifestyle before lockdown demanded more money from us as there was an urge to go extravaganza about everything, whether it is a simple day out or a vacation. Now is the right time to sit and analyze the difference in the expenses before and after lockdown and accordingly cut down on the unnecessary ones to have a budget-friendly living with a limited income.
It’s been proved time and again that money can’t buy happiness. Invest your time in planning your expenses to redefine happiness for yourself and your family.
Savings must go on
We know, you’re dreaded by the current situation of the stock market and the fall in numbers, but don’t let it pause or stop you from investing in your SIPs. We understand you have financial goals to meet. However, unless you are failing to break even or undergoing a layoff or business shutdown, we advise you to stick to your habit of investing in SIPs. The NAVs might be low at present, but the increasing number of units will ascend the graph of profits for you in future. Hence, surf through the tough times and wait for the good times to roll in.
Don’t overburden yourself
If you’re unsure of your sources of income, avoid buying things on credit during this period.
This will add to your debt and make it more difficult for you to overcome the burden of debts. In such times of uncertainty, postpone any big purchases that are on your mind. Let taking loans be the last thing you do to ensure you and your family are in a safe place, financially. Focus on the necessities and plan your expenses accordingly.
Set up an Emergency Fund
Emergencies don’t knock the door before coming. Our current situation is the perfect example of an emergency. It’s the time that has taught us the value of an emergency fund. Also, let us make it very clear, Emergency Funds are meant only for emergencies like these and not for times when you run out of money because you overspent or when you need money to buy a gadget you did save for.
Set aside an amount which will take care of you and your family during the time of crisis. It will also make you feel secure in the most financially insecure phases of life.
Questions about financial planning and investing can be tricky to answer. You might be discussing and exchanging ideas about it on a group video call with friends and relatives, but it’s necessary to understand how your needs, your income and your goals are different from others and hence you need a piece financial advice that’s unique to your needs and lifestyle. Amidst the outbreak, don’t fall prey to panic about these topics. With the help of a financial advisor, be in a state of complete awareness about your money and investment plans.
Continue to INvest.
One thought on “4 Things you should do to avoid financial crisis amidst the COVID 19 outbreak”
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