The whole world economy is expecting an uncertainty and hardship because due to unprecedented COVID 19 pandemic. There has been slump in stock markets, failures in reviving businesses, catastrophic impact on workings hours and earnings globally.

With the right measures and the choices we make today can affect the way the pandemic unfolds so that we are able to build back better.

This article presents a list of Do’s and Don’ts that can help us in navigating these tough times:

1. Conjunction of Investment Decisions with the Changing Economy: It is necessary that the liquidity remains maintained. As the popular old phrase ‘Cash is the king’ during the times of financial crisis as without cash both businesses and households can run into major trouble. Investment decisions during this COVID phase should be made considering the short term goals of an individual.

It is always prudent to have savings in case of emergencies. This fund can provide a headrest in trying times like this. Families should promptly start creating such funds once the epidemic is over so that they are ready for any hardships in the future.

2. Adopt Popular 50/30/20 Budgeting Rule: It’s a simple thumb rule to allocate your post tax income into 50:30:20 i.e. 50% of income on necessities, 30% on wants and 20% should be invested towards savings and financial goals.

3. Ensure Insurance Cover: Ensure that you and your loved ones are covered with proper health and life insurance cover. Make a point that you are well aware of the covenant with the insurance company and the benefits covered in case of infectious disease. Read the insurance terms and conditions carefully to ensure that there is no exclusion built in for pandemic and OPD expenses.

4. Bring Accretion To Your Income: Besides cost savings, there are many sites that may give opportunities for working from home e.g.  Online tutoring sites, Content writing and other online job opportunities.

5. Avoid More Debt And Pay Off Existing Debt: Avoid taking new loans. Although RBI has provided a moratorium period, however efforts should be made to ensure timely payment of EMIs to maintain a good credit score and avoid increased payment of interest.

6. Build Up An Emergency Crisis Fund: Cut off your avoidable expenses and build an emergency crisis fund for at least 6 months of your regular expenses. Save as much as possible.

7. Digital Transformation: Also promoting social distancing, Use digital wallet as much as possible to avoid visiting banks, ATMs.

8. Do Not Indulge In Panic Buying: Do not hoard essentials items due to the fear of lockdown. Buy those items which are necessary as stocking up would just strain finances.

9. Save Yourself From Financial Frauds: Protect yourself from hoax online job offers, do not click on attachments or links or suspicious mails. Never give your financial information as such things increase during the times of crisis.

10. Looking For Alternatives To Earn: Alienate the assets which are no longer needed by selling them on Olx or quikr. Also you can rent the car in case you have two cars on Zoom or Uber to get additional income.

Conclusion: This tough period shall go away at some point of time. Panic is a reflex action to a crisis but hard times do not last forever. Conscious decisions on expenses can help us during these tough times. With the right choices undertaken at right time we can bar the impact and the scars it leaves behind. While these are unnerving and demanding times, it’s important that we don’t react out of fear. The choices you make today will impact your long-term financial planning goals.

And remember, you’re not solo. Even in a world of increased social distancing, financial advisers can help you steer these tempestuous waters and mitigate your financial anxiety by helping gauge if any of these plans of action are right for you.

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December 2023