The pandemic has pushed the world into a recession. However, with the right planning, you will be able to beat its impact on your finances, and set the stage for a much more hopeful tomorrow.
The corona-virus pandemic is sparking financial crisis the world over. If you have been closely monitoring global markets, you would have noticed the volatility it is experiencing. This virus outbreak has lead to:
- Loss of income,
- Loss of economic activity,
- Fall in import/export due to global shutdown,
- Production disruption in many sectors,
- Stock-market plunge and volatility,
- Drop in Mutual Fund NAVs,
- Loss in the real estate market,
- Selling gold is also not easy etc.
Studies have found that every two out of three people are not prepared for the upcoming recession. Although the government is taking all efforts to combat this situation, a deep economic slump and financial crisis is unavoidable. However, the key question now is how to financially plan for the post-COVID phase.
In this section, we have prepared a to-do-list to help you navigate through the times ahead.
- First and foremost, keep cash handy and spend wisely. Cut down on your unwanted luxury expense and set money aside for emergencies. This practice will help you sustain in the long run too.
- Prepare yourself mentally for a period of possible slump in income. Meanwhile, consider gauging new business opportunities that can help you yield monetary profits in the future. Meditate and communicate with your family members to remain socially and mentally supported.
- Avoid debts as much as possible. Do not borrow, even from family and friends. Avoid "buy now, pay later," "interest-free financing" and like options that can merely postpone debt. Switch to the debit card and in-hand cash until this crisis blows over. If there are existing loans, seek help and advice from banks and or any other financial expert.
- Make a list of your assets that you can liquidate during emergency situations. It could be your fixed deposit, recurring deposit, your retirement savings, your gold, the extra property you bought as an investment, etc. Know what is the best option to access the funds if you need it in crisis.
- Do not fall prey to false promises. Many fraudsters will offer your illegitimate investment options. Make sure you don’t trust these offers. This is not the time to gamble with your savings.
Ideal Investments to Help You Sustain Post COVID-19
1. Invest in an Emergency Fund
Take out a small amount from your income and invest it in an Emergency Fund especially made for a situation like this. Smart and safe, Fixed & Recurring Deposits are ideal saving options, if you do not want to take any risk with your investments at this moment. AU Bank’s COVID Shield Deposit for Emergencies
helps you manage your monthly expenses – EMIs, Rent, School Fees & Living expenses at times like these. Your principal is protected and returns are guaranteed. It is a growing investment offering 7.75% annual interest* for a 3 year period. Plus, DICGC Insurance covers deposits upto 5 lacs for a person. Hence, you can book funds in multiple names like Spouse, Parents, etc to increase the insurance coverage and security of your deposits. Lastly, banking services are completely digitalized, so you can withdraw your funds anytime using mobile / net banking services. *T&Cs apply.
2. Invest in Mutual Funds - Systematic investment plans (SIPs)
Systematic investment plans (SIPs) in mutual funds allow you to invest in smaller amounts. Moreover, since Mutual funds
in India are regulated by the Securities and Exchange Board of India (SEBI), your investment is safe.
3. Continue Investing in Gold
During a recession, stocks may fall as companies make less profit. However, your gold will still remain as a financial asset for you during bad times.
Finally, don’t be dependent on projections. Instead, plan for the best and prepare for the worst phase. The evolving COVID-19 situation is complex and the financial market is currently reflecting uncertainty. Nevertheless, with a well managed financial portfolio, you will be able to defeat the upcoming economy crises in a better way.