COVID-19 has made the world an uncertain and unpredictable place to live in. It has not just claimed lakhs of lives but affected the economy too. Crumbling stock markets, the declining economy of the country, pay cuts, and rising unemployment made people more practical about their finances than ever.
Hence, it is a must to take care of our own finances and act sensibly to avoid financial trouble. In this article, we will see a few ways to lead a balanced financial life amid the second wave of the pandemic:-
Re-evaluate your finances:
As the coronavirus changed the norms of the normal, it is time we reassess our finances too. See the areas where we are spending, essential spending, unwanted buys, examine them carefully, and prepare a pre-planned budget according to the current needs.
The well-examined budget may include essentials like groceries, milk, electricity and Wi-Fi bills, rent, EMIs, etc. While being quarantined, you can cut down on our luxury online purchases and save the amount.
Build a safety net:
With the world at war, we don’t know what’s in store for us personally and professionally. Hence, it is important to be ready for any unfortunate hurdle that’s ahead. It may be losing a job, facing health issues. To make sure we don’t have financial trouble while dealing with other issues, create a safety net while you are sound and safe.
This safety net should include liquid cash to pay for your essential monthly expenses. Save as much as you can while cutting down the luxury expenses and save at least 6 to 12 months’ expenses in the form of cash.
The COVID-19 pandemic has significantly changed the health and life insurance scenery in India in many ways. People have now started to take health insurance very seriously. The new trends that have surfaced with the onset of the COVID-19 pandemic are expected to continue even in the post-COVID world.
The fear of coming in contact with the deadly virus has now made people realize the importance of having health insurance. The adoption of health insurance has seen a significant jump, especially in the last few months.
This will save the hassle of running for money when you are already suffering. The prices of Insurance may also go up to 30% because of the pandemic.
Invest in low-risk funds:
Different tragedies, calamities, and pandemics have proved time and over that after a certain time, the market bounces back much stronger. However, it may not be the right time to move just in the name of faith. Hence, investment money in places where capital is safe and guaranteed. Invest in low-risk mutual funds and make fixed deposits.
While these may provide your assets with low interest but your capital is most certainly safe even in uncertain times. Once the market gets better, you can divide your money and invest in high, low, and medium risk level investments.
Avoid panic selling:
The freefall in global stock markets is disappointing for investors. There may be a strong impulse to sell stocks and minimize the losses, but this is the worst possible action to take.
By selling assets at a lower price, losses become real. The value of most stocks will automatically stabilize when things go back to normal. Hence, it is important to hold out and wait for this to end.
Given the unpredictability, proper financial planning will help you deal with other challenges. The above-mentioned tips will help you become financially stable.
Following these few simple tips can help you deal with the current crisis and emerge victorious out of it unharmed. When things get back to normal, with the above practices, you will find yourself in a much stronger position with no liabilities.