COVID-19: Ensuring financial stability during the pandemic
In uncertain times such as these, and while governments and communities across the world are trying to figure out how to prevent an economic crisis, it becomes imperative for us to take care of our finances.
According to the latest IMF estimates, the world has already entered into recession which will be worse than the one in 2009, but is projected to get some cushioning by next year.
While taking care of health and maintaining isolation and social distancing have become paramount, we also need to take precautions to manage our finances, making necessary modifications and adjustments, say experts.
"First of all, your family and your health should be a top priority. Secondly, the current shutdown will impact the economy and with that each of our finances. We recommend people to be on top of their budget and ensure that any income disruption is smoothed out via a proportionate decrease in spending. If you are fortunate to not have any disruption to your income, please spend on online food delivery and other online channels. All the small businesses in the country need you and your support. There are also many organizations working tirelessly to bring us testing and vaccine for the virus. Please do consider donating to these causes", says Nityanand Sharma, CEO, and Co-Founder, Simpl, a data technology company that works with merchants and financial institutions to enable effortless and transparent monetary interaction.
Here are few ways to prepare for unforeseen times and be diligent with your money:
Plan an emergency fund
Personal finances are a source of stress. Understandably, numerous matters need to be accounted for. Even more so when planning for an emergency fund to cope with the unexpected; We might even procrastinate thinking such adverse situations in the future, hoping that they might not even happen. So, such funds become more important during the pandemic, which should be viewed as an emergency.
Since the time of this outbreak, people are finding it difficult to pay for their utilities via cash. The payment via digital payment apps has risen.
RBI has also urged customers to use digital banking facilities amid the coronavirus outbreak. In light of recent events, the National Payments Corporation of India (NPCI) has also started a campaign called ï¿½India pay safe' in order to boost digital payments, as exchanging cash could spread coronavirus. With a whooping majority of smartphones penetration various digital payments app like Google Pay, PhonePe will ensure smooth transactions.
Review your investments
Become a bit more market savvy, this is a perfect time to do a risk analysis of your investments. You may want to re-balance your portfolio if it's skewed excessively towards equity or debt assets, which are more prone to market volatility or to channel towards more risk-free assets like Public Povident Fund (PPF) or National Pension System (NPS) scheme.
Tailoring daily budget and expenses
Tough times call for pulling plug on luxury, discretionary and non-essentials expenses. Channel funds towards basic essentials and keep aside a chunk for unforeseen times.
Review your health policy
Ever since the pandemic announcement of COVID-19, policies that exclude pandemic coverage may not settle claims arising from such cases, involving hospital treatment costs. Ensure you go through your health insurance policy document to get complete clarity on its list of coverage and exclusions and also check for any latest intimation from your insurer.
So, if you are still procrastinating and not taking a proactive step to sort your personal finances, realise it's need of the hour. Not just in emergencies, but taking care of our own finances during challenging times enables us to stay financially fit and minimizes financial anxiety. IANS