The whole world is facing an uncertain time and hardships due to the Corona virus. The virus hit the market hard when already the world economy was going through tough times, thus the whole economy has come down crashing. We all are just a step away from facing the biggest recession of the decade.
This time calls for proper action to be taken to ensure one’s health and financial condition both. It is time to take preventive and corrective measures to ensure the overall wellness of an individual and family both.
The reality of the whole world has changed, align your investment decisions with the change
The world is heading towards the biggest economic crisis, so it’s better to make your investments liquid. As in any urgent need of money, you will have money at your disposal with you. It’s time to look after the short term goals and for a while put other plans at hold.
It’s time to keep your financial records clean
This is the time when your financial assets should be available at your disposal in times of need. It is also time to look at facts as is your financial will ready, are you transparent with your finances with a trusted family member. Is your insurance policy known to your family and is its premium updated?
If your answer is ‘NO’ then this is the time to work in the following ways –
- Life has been unpredictable, its time to make your will to ascertain rightful owners to your assets.
- Prepare a list of your assets and liabilities and share it with someone you trust.
- If haven’t done already it is time to appoint nominees for all your investment and bank deposits.
- Keep your health insurance and life insurance properly updated, handy, and easily accessible.
- Take stock of all your loans and EMI’s and create a way to pay the debts.
In short, keep your financial documents in check and share it with your loved ones.
It’s time to handle finances with prudence
Have you heard “less is more”, this is the time to live in less and cut down your expenses and use of credit cards? As this time calls to save more and more as the coming time is unknown to us.
Though the government has announced a moratorium on payment of term loans for 3 months. However, the wise decision is to ensure the timely payment of EMI and loans. This would ensure that the loan and EMI will be closed on time and anyhow interest would continue to accrue and get added to the loan amount so it is wise to pay the amount on time.
Use this time to create a backup plan
This time for many brought pay cuts and even loss of a job with it. So, it is time to introspect and create a way to maintain cash flow. Its time to evaluate your financial position and ways to serve debts and run necessary expenses. You can redirect your investments to liquid assets to avoid sudden crunch of cash.
Keep your insurance game-high
The current time has made insurance a must-have thing to have. Having health insurance will save you from expenses occurred in hospitals and not put the financial burden on you. Term insurance will help your family after you in having financial security for a while.
In case, you are yet to pay the premium on life/health insurance for the financial year 2019-20, as per the recent relaxation by the government, you may still pay the same by June 30, 2020, and claim deduction (under the Income-tax Act, 1961) for this financial year.
In short, to sail through the pandemic you need to be financially, physically, and mentally prepared so that you sail to the other part with minimum disruption. Remember, “Tough times never last, but tough people do”.
Happy Investing!
A mutual fund is subject to market risk, please read offer related document carefully before investing.