7 Ways To Protect And Manage Your Money During COVID-19
It’s been over a decade since the infamous inflation of 2009, and the Coronavirus pandemic has rocked the global economy, unlike anything we have ever seen. Taking care of our health and exercising caution while social distancing has become our ‘new normal’ is a balance we are still trying to achieve. But the worst hit is our personal finances.
Whether you work in tourism or hospitality or any other sector, these are unprecedented times that were unknown to us a month ago. With salary cuts, lay-offs and furloughs happening all over the country, how do you keep your sanity in check and manage your money during Coronavirus?
If you have been struggling with these questions, we have tried to make it all as comprehensive and concise as possible in this blog post.
1. Review Your Daily and Monthly Budget
The first and foremost thing to do is to cut down on non-essential spending. With restaurants shut and e-commerce sites not delivering until further notice, this becomes easier.
However, it will help you sleep peacefully with a budget in plan and knowing exactly how much you will be spending on essential items in a week. Save the extra cash and put it to your emergency fund. Avoid mindlessly spending on subscriptions and other tutorials online if you cannot afford it right now. We don’t know how long this pandemic will continue, and preparation is our armour.
2. Shift Your EMI And Loan Payments to Online Mode
Going digital on your home or any other loan payment is advisable in the case of your bank shutting its offices. This will ensure you can still pay your dues and avoid late fees in the future. The same rule applies for EMI and Credit Card payments. If you are not paying it all online, make the transition today for hassle-free payments on time.
That being said, it is important to stay calm. Decisions made out of fear are not always the right ones. This may feel overwhelming and terrifying. Find a mantra that makes you feel calm. For us it, “This is survivable. We will survive. This is a time to overprotect but not overreact.”
3. Strengthen Your Emergency Fund
In one of our previous articles, we told you about how to build an emergency/contingency fund, and now is the time to further strengthen it. Ideally, your emergency fund should have six months’ worth of savings, make it a year because we are dealing with a global pandemic.
This emergency fund will keep your mental peace intact in the worst-case scenario of your losing your job. If you can manage to create and sustain an additional contingency fund, do so to be free of any instance of borrowed funds in the future.
4. Continue With Your Long-Term Investment Plans
A pandemic-stricken mind’s first thought is to withdraw money from your funds, mutual and otherwise. The market is volatile, but your long-term investment plans like SIPs will not be affected much in the long run. Hence, it is not wise to withdraw your money right away.
If you have a sense of MF and want to buy stocks right now, it might be the best time as the market rates are at an all-time low and you will profit once it bounces back. Make sure you research about it and have enough money stashed away after all your investments.
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5. Work On Other Sources Of Income
If you find yourself in a social distancing, work from home type of situation, use the extra time to your advantage. There’s nothing wrong with a good Netflix binge (and sometimes it’s needed), but as we’ve seen, the world can be unpredictable.
Don’t rest on your laurels, thinking that your job/position is secure. Consider other ways you can make money remotely. Maybe it’s time to learn a new skill or do some remote work for free to learn. You may be tired of hearing about side-hustles, but now is precisely the time to start learning more about it.
6. Don’t Opt For the Moratorium If You Can Pay Off Debts
The RBI announced back on March 27 that people can avail a moratorium on their credit card and other EMI payments for three consecutive months from March 1 – May 31, given the current scenario. While this seems an easy way out in the face of a pandemic, it is not advisable to people who can afford to pay off their pending dues. Why do you ask? The simple reason is that interest charges will be levied after the moratorium period is over, and it is something you don’t want to pay later if you can manage to clear off everything right now.
This option is viable for people who are facing severe pay-cuts or sudden unemployment.
7. Support Small Businesses
If you find yourself in a lucky position to have a stable income and no debt, consider supporting small businesses or organizations around you. Buy gift cards, continue to pay your regular service providers who can’t work, tip your delivery people, and get takeout from local restaurants. There are so many ways you can enrich your life by supporting small business and outlets around you.
Apart from all these steps to manage your money in Coronavirus, make sure you diversify your investment portfolio only with big companies and not start-ups. The latter are the worst hit in the economic downfall and betting your money on them is not advisable financially. What are you doing to protect and save your money during Coronavirus? Let us know in the comments below.