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Managing your finances during COVID-19 Pandemic

  • Post published:August 12, 2020
  • Post category:Bank / Stories

COVID-19 has brought the world to a standstill. The market is uncertain, the economy has declined, companies are shutting down and the rising unemployment has got people reeling. Many of you must have faced a change in your financial situation due to salary cuts, layoffs, unexpected medical expenses, etc. Due to so much uncertainty around, it is time to evaluate where you stand financially. It is time you make a plan to manage your finances successfully during and after this pandemic, when things will get better.

Review your budget and other expenses: You must have had a pre-decided budget for all the expenses you bear. But keeping the current scenario in mind, it becomes important to understand the thin line between your necessities and luxuries. Luxuries can wait but necessities need your attention on a daily basis. You must review your budget and give priority to the must-haves like utility bills, food, house rent, EMIs, credit card bills and medication to ensure financial stability. Also, after paying for all the necessities if some money is still left, create an emergency fund. No one can predict how long this pandemic will last, therefore, an emergency fund can help you survive these tough times.

Pay your EMIs and credit card bills on time: Although to reduce the stress of EMI bearers, RBI has announced 3 months moratorium on loans and extended it too, but try to pay the EMIs on time. Opt for moratorium only when you have no other option left. Because, if you opt for the moratorium, the interest rate and tenure will continue to increase and will be added in the final loan amount and tenure respectively. Also, if you feel that it is not the right time to worry about your credit card payments, you are absolutely wrong. Please do not ignore your payments. Pay at least the minimum amount required even if you are facing a financial crunch. A very high interest rate is charged on the pending amount of credit cards and delay in payment also affects the credit score.

Switch to digital world: According to the guidelines issued by the government to avoid COVID-19, you must switch to the online payment modes. Avoid going to the banks or ATMs to withdraw money. Mobile banking is offered by many banks like Paytm Payments Bank where you get the facility to open an account without any fee and charges. You can also make online transactions and add money to your Paytm wallet from the comfort of your home . Furthermore, Paytm Payments Bank has launched ‘Cash at Home‘ facility for senior and differently-abled citizens in Delhi-NCR during these tough times.

Do not discontinue your SIPs: If you are facing salary-cuts or have to shut down your business, do not panic and withdraw your SIPs. You have no idea what future holds for you. Therefore, keep saving money through SIPs and other long term investments for they work as a backup. There is a silver lining amidst this crisis though. Whenever the market is down, it’s always a good time to buy an investment plan. But, if you are facing a financial crunch and have tried all other options, you can pause your mutual funds SIPs for some time. You can continue with them as the situation stabilizes.

Keep a check on your life insurance and health insurance: If you do not have any life insurance or health insurance, opting for one would be a smart decision to save yourself from unexpected medical expenses. If you already have a term plan, make sure that you pay the premium on time to save the policy from lapsing. Also, ensure that you have a medical insurance plan for yourself and for the family members dependent on you so that you don’t waste your savings if an emergency arises. If you are only dependent on the medical plan provided by your office, ensure you have a personal plan too if you are on the verge of losing your job.

They say if winter comes, can spring be far behind? Nothing is permanent in this world. Not even this pandemic. This uncertain phase will pass smoothly if we all take proper care of our personal finances along with the mental and physical health, including our family members. If you try to look at the bright side, you will feel that this unforeseen pandemic has not only offered you a chance to spend some quality time with family but has also given you ample time to plan your finances, every single day. ‘Managing your personal finances‘  will certainly help you in the long run.