This difficult pandemic time has made us sit and think about our regular cash flows. Many of us are in a position already where we have to calculate our cash inflows. Many businesses are not able to generate revenues; many people have lost their job or are on the verge of losing. So, its time to calculate and take measures of your cash flow.

Here is what you need to keep in mind – 

Calculate expenses for the entire year and also the next year 

Write down all your expenses that occur in a month be its regular food, travel expenses, children’s school fee, EMI’s, monthly repayments, and regular RD’s or investments that you do and divide it by 12. This will help you arrive at a lump sum figure of cash flow that you would need in the next 12 months. 

The next thing on the list is your monthly loan repayments, which are non-negotiable as not paying on time will land you with a bad credit history and will have the bank chasing you, this would be another nightmare that you don’t need at this time in your life. The loan repayment moratorium announced by the RBI may or may not be relevant to you, hence, we are not taking that into account here. 

Now as you know your cash flow has been disrupted, so you need to reduce your expenses, which can be done. Maybe try to bring down the monthly credit card bills, gymnasium and spa expenses or even the monthly saving towards a travel budget. Here you can open up your account of savings and maintain a cash flow 

Try not to stop your monthly investment 

Deciding on changing or stopping, your long-term investment must always be your last resort. Try not to make any changes in this unless you are not in dire need of money. Stopping this will leave a dent in your long-term objectives. For now, focus on cutting your current expenses and try and survive on as minimum as you can. 

Re-plan your big expenses 

The entire world is at halt so in the lives of people so it’s time to re-plan your plan to visit the Maldives this year. Or even cancel the birthday party you wanted to spend with your friends in Goa this year. The car that was planned in Diwali this year, postpone it for next year. Pushing that vacation for next year and waiting for another year or two to buy that dream car you will have the adequate cash flow to surpass this hard time. 

Use this time to have a plan B to maintain the cash flow

This worldwide crisis has left us with no option but to wait till life comes to normal. Till then you need to keep calm or think of plan B. As we don’t know what will be at the end of the tunnel ones this pandemic crisis is over. It's better to be prepared for the future to come, I know it's hard to think of future right now but this is what we need to do. 

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).