We are all impacted by the coronavirus pandemic. If by chance you or a loved one have not been infected, you’ve been lucky. However most have been less fortunate – plus people have lost their jobs, sustained losses in their business and some have even had to shut shop. Here are some money management tips from the experts that will help tide over the financial crisis.
Renovating the house, buying a car or making other substantial purchases can wait for the time being. Now is not the time to overextend yourself, particularly if it means taking out loans. Most of us can ill-afford additional debt burdens right now, when incomes are down because of COVID and the consequent lockdown.
Maybe you can order-in food less frequently than before. Maybe buy fewer clothes than before. Try not to get sucked down the rabbit hole of the Amazon and Myntra ‘sales’ which tempt you to make all manner of inessential purchases. Think of it this way: the fewer packages delivered to your doorstep, the more you reduce the chance of an infection finding its way into your home.
Maybe you can save less than before, but try not to cut down on your essential savings. Your savings should be such that at any given time, you have access to an emergency fund that will see you through at least six month of expenses.
Health insurance is vital at a time when getting a COVID infection could result in hospitalization and lakhs in expenditure. Make sure you don’t miss any insurance premium payments so that there is no gap in coverage.
Read up about the pandemic and protect yourself and your family against possible infection – getting infected can be a severe drain on already strained family resources. Not only that, read up on the news to stay informed about the financial news. There could be new government aid schemes or job openings that may be of interest. This will also help you know about new scams if any. At all times, trust only authentic sources of information and don’t get taken in by fake news and misleading claims.
RBI announced a moratorium on loan repayments because so many people are feeling the pandemic pain. If you decide to take advantage of a loan repayment moratorium, make sure you have a contingency plan ready. Remember, even if you don’t have to pay the EMI today, you will have to pay it tomorrow. And the interest will continue to add up.
Each day seems to bring more depressing news than cheerful news from the stock market. It is easy to want to cut one's losses and sell the shares that seem to continue to tank. Resist the urge to do so.
In fact, right now is the time to buy shares if you can afford it, say the experts. If you manage your finances wisely now during the COVID pandemic and manage to buy, this will stand you in good stead in times to come. Buying blue chip shares and quality mutual funds is a sound investment at any time and particularly during the pandemic. The long term outlook is not as dismal as we may imagine!
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