The COVID-19 pandemic has disrupted the lives of both individuals and businesses, as lockdowns have become the norm worldwide and a huge slump in the economy is expected. Revenues are significantly down and indulging in everyday luxuries has come to a standstill. Since both earnings and spending have been negatively affected, stock markets have crashed and interest rates have been slashed. No wonder, managing personal finances is the biggest challenge everyone is facing now. So, this blog is all about how you can manage your money smartly despite the
current crisis, and survive till times get better.
Gear Up for Fluctuating Income
With most businesses shut down or forced to work from remote locations, it is likely that the income received will be partial. In case of self-employed individuals, there may be a significant gap in receiving revenues. So, gear up by pulling in cash from your receivables, to help you feel more in control of your finances.
Increase Your Liquidity by Creating an Emergency Fund
If you have never had one, it is high time to create an
emergency fund. This should comprise your previous savings as well as the current ones. These are times when liquidity is the king of adverse situations. So, it may be a good idea to have more cash in hand, so that you can easily spend in case of emergencies. Having cash in your savings accounts or online wallets is much better than depending on credit to meet with emergencies.
Reduce Spending Forcibly
Owing to
work from home scenarios and lockdowns, spending has been automatically reduced for most of us. There is no need to spend money on commuting, dining out, going for movies, or on holidays. However, spending may have increased in other areas like stocking up on essentials. This increase is not near what you usually spend on luxuries though. So, it is imperative to add the money that you save on luxuries, to your emergency fund.
Prioritise Smartly
Prioritise your expenses and get rid of luxuries that you can live without. It goes without saying that these are difficult times and prioritising your expenses can help you save more in the long run. Living simply and spending wisely is the need of the hour. Cut down your spending to the bare minimum and boost your emergency fund as much as you can.
Manage Debt Well
By offering an option to defer EMIs for three months and slashing interest rates, the Government of India and the RBI have been working to help the situation of debt in the country. So, save up more to be able to pay back your EMIs on time, to avoid having an effect on your
credit score.
Lend A Hand If You Can
Assess your financial situation in a practical manner. If you are getting a regular salary while working from home and have an emergency fund in place, you may want to consider helping others in need. There are many fellow citizens out there in need of our help, like the homeless and the jobless daily wage earners. You can provide them help through donations to the PM Relief fund or other causes that are close to your heart.
Last, but not the least, look at the silver lining. With more time in hand, you can get started with any project or priority that you have been putting off for months or years. If you run a business, you can also put up your ideas on social media, stay connected to your customers, and keep them engaged and interested. This will help you better your revenues when the crisis is over. Ultimately, spend less and save more for a rainy day. While this distress is temporary, staying positive and alert will help you sail through these difficult times.
