As we entered this year of 2020, a deadly COVID-19 pandemic which is also known as Coronavirus Pandemic hit which left the entire world surprised.
Going back in time, it is said that the outbreak was first noticed by the entire world in Wuhan, China in December 2019. Later on, COVID-19 was declared as a global pandemic in March 2020 by the World Health Organization (WHO).
If we look at the data as on 3rd June 2020 over 65 Lakh people have been infected by COVID-19 in around 213 countries and territories all across the world.
COVID-19 has been the reason for mass destruction, both socially and economically to human mankind the impact which has been huge and significant.
Because of this global pandemic major part of the world went under lockdown, for which we saw the largest global recession in history ever. After the lockdown was announced the whole economy slowed down worldwide, where most of the businesses and companies are on the verge of shutting down because of a fall in consumer demand, no sources of finance to continue the business, pressure from financial institutions and banks for debt repayment, etc.
It has affected a common man the most because of lockdown as most people are working from home while lakhs of people have lost their jobs while many others are experiencing a reduction in their salaries all across the world.
As of now analyzing the situations going around us it’s hard to determine what will be the impact of this pandemic in the upcoming future and for how long is the impact going to last.
So, it becomes very important at this point in time to take care of your money and use it wisely so it can be your savior in arduous times.
Here are some important points that you can start implementing in your daily life from now which will help you save money during this pandemic:
Tip 1: Invest Your Cash into Savings
Many businesses and companies are being shut down after the government-imposed lockdown because of COVID-19, which has resulted in job loss and salary reduction for many people. Always remember that until we extirpate this pandemic completely, there is a financial threat to everyone, whether you are doing a job or business.
So, from now onwards save up whatever you can and make a habit of investing your savings so that even in case you lose your job there is some steady source of income for you.
Tip 2: Have a Life Insurance Policy
It is important to have a life insurance policy for yourself and your family. With so many things going around us right now, it is very difficult to expect what is waiting for us ahead.
Insurance policy doesn’t cost much, but it will give you and your family financial stability during critical situations. So, it is better to be protected right now with a health insurance policy.
Tip 3: Prepare a Monthly Budget
Making a budget is a very important part of financial management. As a common man, you must also start preparing a monthly budget for yourself. Try to restrict your expenditures to only essential items that you really want and stick to the budget you made at the beginning of the month.
Gradually this will help you save a lot of money in which you can start investing and earning returns during such a crisis.
Tip 4: Have at Least Some Emergency Funds
No one in this world can guarantee you how long is this crisis going to continue further. In such a situation you must have some emergency funds available for you which will be useful in tough times.
If you haven’t started maintained such funds don’t worry, start from today. It is never too late to start. Parking your surplus fund either in Fixed deposits or depositing a certain fixed amount in mutual funds is the best way to start with.
It is always said that one should have enough funds on which he can survive for at least six months of basic expenses.
Tip 5: Consult Financial Expert
People usually think investing in the equity market can help them earn high profits within a brief span of time. But during a situation of lockdown markets have been very unpredictable. You will end up losing a lot of your hard-earned money if you invest in the stock market blindly with no proper research.
If you are buying stocks, just for profits instead of long-term investment it is better to consult some financial expert who has thorough knowledge about markets. During the current situation, it is most advisable to invest with long-term motives rather than aiming for instant profits.
Tip 6: Diversify
Other than the Equity market, even if you are thinking to invest in the Debt market, they aren’t safe either. With defaults, happening in different sectors of society soon Debt Securities will start collapsing soon.
In such a situation as said by Warren Buffett “Don’t put all your eggs in one basket” you must focus on creating a portfolio which is a mix of both Debt and Equity and where risk is minimum.
It is prime time now to plan for yourself seriously as we really don’t know how long will it take for the situation to be normal again. So, it is better that we prepare ourselves right now than regret later. If you can’t do it yourself there are many experts to help you in taking an appropriate decision under various scenarios.