How you can manage your finances during COVID-19
- June 10, 2020
- Posted by: Amit Rathi
- Category: Finance
It is tough to decide how to manage your finances in the time of crisis. The current situation amidst the COVID-19 stress has created not only nationwide but also a global economic downfall. With businesses shutting and failing on a rapid scale, it often becomes aggravating to take any kind of decision-related to finance.
Not only wealth-planning in such times becomes a major task but also the decisions that were taken earlier are reconsidered. Such unforeseen situations spur tension among individuals.
It is always better not to put up with impulsive decisions. To avoid such situations, a financial advisor should be consulted for better assistance and guidance.
How to deal with the situation?
The situation demands a lot of patience not only during the lockdown but also post it. It is better not to panic about finances. Instead, take decisions calmly and wisely. The least one can do at present is to spend less and try to reduce the expenses. This can be done by listing out the total expenses, prioritizing the items on the list, and striking off the least important on the list. This way it becomes easier to save and ensure that you spend less.
It is advised not to haphazardly withdraw all your current financial deals, investments, and plans. Such decisions might lead to regret later. Hence, stay calm and seek aid from a certified financial planner. He/she is capable of systematically analyzing your situation and putting forth the best suggestions for you accordingly. Taking professional help to take care of your finances seems to be unimportant. This is why most people tend to avoid it. But it is rightly said that prevention is better than cure. Therefore, it is reasonable to seek aid from an experienced individual rather, ending up in an even severe crisis.
SIP or systematic investment plan is a plan with great volatile stability. This means that it tends to rise and fall greatly and that too within short intervals of time but eventually survives. These sudden and wide functions can lead anyone into stress. People tend to opt-out of such plans to save themselves from further loss. It is advisable not to do so. Not every plan survives such severe price fluctuations. Your preferred wealth planner prevents you from making impulsive decisions in order to be able to sustain the crisis. He/she also advises you about which investment plans should be continued and which investment plans should be withdrawn. He/she can even let you know how to invest even during recessions.
Apart from minimizing the spending and concentrating more to save, it is important to know how to spend money rightly. This is where the concept of smart spending helps. Carrying out all your expenses smartly requires a self-assessment. This self-assessment enables you to know where you are spending more than it is actually required. You can then strategically plan out how to control your spending and ensure smart spending for essential commodities. It is important to curb all the less important expenditures until you come out stronger from the crisis.
How to improve finances through investments during the crisis?
Investing during a period of recession sounds vague to most of the people. This is because most people do not know how to invest due to which they end up in a more vulnerable condition. Some important things to keep in mind while investing in severe conditions like the present one are:
- Do not give up on SIP- As mentioned earlier, SIP tends to have volatile stability and hence usually survives well through tough times. It is therefore not advisable to withdraw your Systematic investment plans.
- Evaluate before you invest– Not all investment plans are supposed to be implemented during uncertain periods. It is better to opt for plans that are less volatile. Such plans tend to have great stability and hence, prove to be beneficial in wealth planning.
- Stay away from home investments– Investing in property at such times does no good. This is because property rates either do not tend to change or consistently fall during recessions.
- Rely on Savings– Savings should always be maintained. These savings turn out to be a great source of help in to.es of recession. This is why not only should one rely on savings but also should try to save more during the emergency too.
It is possible to be able to sustain and improve your finances no matter how tough the time is. All you need to do is analyze the situation and act accordingly, in a nutshell Invest Karo Khush Raho. With moderation and help from an advisor one can easily improve finance.