What You Can Do To Protect Your Finances During Pandemic

What You Can Do To Protect Your Finances During Pandemic
15 Jan 2021 05:10pm
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Life has changed a lot due to the current pandemic situation. Apart from taking care of your health and maintaining social distancing you also need to be mindful about your finances. The reason is because the pandemic has an adverse effect on personal finances. Thus, it is important for you to take necessary precautions to protect your finances during the pandemic.

No matter where you are working and what type of job you are doing, this pandemic situation cause salary cuts, lay-offs etc in almost every sector. These are unprecedented times and it is hard to keep your sanity in check. In these trying times managing your money becomes the top priority. It might happen that you are not ready to face this kind of financial challenge. If you are struggling to find the right direction to manage your finances then you can go through this article where some important points have been discussed.

Precautions To Protect Your Finances During The Pandemic In 2021

Keep Reviewing Your Daily As Well As Monthly Budget

Sometimes unnecessary expenses keep on adding in the list of expenses. You need to keep track of your daily and monthly budget. This will help you spot the non-essential expenses and to take necessary action for best result. If not needed these expenses should be eliminated.

Due to pandemic situation eating outside in a restaurant or any food outlet is no more a preferred option. Thus money spend for eating outside can be saved. The best part is that you will consider preparing food at home which is definitely an economical and healthy option for you in this crisis situation.

Having a monthly or daily budget plan has its own perks. You will have a clear idea about where you are spending money. Moreover, you can adjust expenses as per necessity. The amount of money you are spending on important things will be known to you.

Moreover, if you are able to save some extra money then you can put that as emergency fund. Stop yourself from spending extra money on subscriptions and online tutorials which currently you cannot afford.

You will have to decide between luxury and necessity while planning for the budget. None can tell how long this situation will persist. But one thing that you can do is to prepare yourself and do whatever possible to protect your finances.

Choose Online Mode Of Payment For Loans

Going out and visiting banks to pay off your dues and loans don’t make sense during this pandemic situation. It is also not possible since banks are often remaining closed and are providing access to limited services only. Considering online mode of payment is the best option as it does not require you to go out.

By making online payment on time you can avoid late fees. The online mode of payment has been made available to make payment hassle free and convenient for you in these trying times. Thus, you can easily make credit card payments also using the online platform from the comforts of your home.

This is a simple step that makes payment of loans effortless. Take advantage of online advantage and prevent debts from stacking up. So, make sure you are protecting your finances by disbursing off all payments on time.

Work On Your Emergency Fund

It has always been advised to save something as rainy day funds. The reason is this will help you sail through tough times.  Building an emergency fund when times are relatively good is very important keeping unexpected situations in mind.

Having emergency funds means you should have at least three to six months worth of money with you to continue with your normal spending needs. But since this is a pandemic it may take long for you to get back on track. Situations like loss of job, salary cut etc can be handled if you have access to emergency funds. Thus, it is important to build the habit of saving even small amount of money for rainy day funds.

Take Care Of You and Your Family’s Health

Health is indeed the most important asset of human life. During pandemic situation that the world is facing taking care of you and your family’s health should be your top priority. It is very much important to have a financial plan in place to tackle medical emergencies.

There is no harm in being extra careful and do the necessary preparations. All these efforts of yours will not go in vain as all the preparedness can be transitioned to make other financial planning for other scenarios.

Continue With Your Ongoing Investment Plans

You might find it difficult to continue with your investment plans due to sudden outbreak of this pandemic. You might even consider withdrawing money from places wherever you have invested. But if you have invested on long term plans then there is no reason for you to worry at all. It is because your investment plan is not going to be affected much if that is a long term plan.

If you are interested in investing on mutual funds or stocks then this is indeed the right time for you as market rates are at all time low due to this pandemic situation. Moreover, you can make profit out of it once the market bounces back.

But that does not mean you would just pick any plan blindly. You must do extensive research to find the best plan. Also, you must make sure sufficient amount of money has been kept aside for future use.

Think Of Side Hustles For Additional Income

This pandemic situation has gifted you additional time for yourself as you are social distancing and working from home for quite some time. Instead of wasting that time in doing things that are not important, you can make use of this time in working out other sources of income. This will ensure you have enough of funds to face those unpredictable times.

Just because your job is secure you should not spoil the time you have in silly things. You can utilize the time to learn a new skill related to your passion so that you can start something of your own and be your own boss. Having a side hustle that can earn you money is not at all a bad idea especially when times are really bad.

Pay Off Debts If You Can

Although payment deferral option has been provided considering the current pandemic situation, paying off debts on time is highly advisable if you can really afford it. There is no point in delaying payments when you are capable of paying it off within scheduled time.

The reason for not considering the payment deferral option is because late payment will incur late fees and penalties. Moreover, interest charges will start accruing once the period gets over. Surely, this is something you would not want to bear when you are able to meet the payment within time. This option might be considered by someone who is facing pay cuts and sudden unemployment.

Keep Some Hard Cash With You

What if banks are closed and ATM services cannot be availed? Keeping this situation in mind, it is important that you must carry some hard cash with you. It is for sake of the time when an emergency pops up and you cannot get money from banks or ATMs.

This does not mean that you keep the money untouched and ignore small requirements. It will be of no use if you keep the money idle at home. You must remember one thing that your money will grow only when you will invest it in the right way.

Review Your Insurance Requirements

Keep reviewing your insurance requirements once in a while every year. Insurance premiums and interest rates are expected to be affected due to this pandemic situation.

A good example would be auto-insurance. As a result of the pandemic you must have started working from home and so you are using your car a lot less than before. This means you will be requiring less fuel and can save a lot on automobile premiums. Moreover, you can research and shop around to get auto insurance at best rates.

Check Out For Other Borrowing Options

Since rate of interest has dropped due to the outbreak of the pandemic. This could be the right time to look for borrowing options like refinancing or getting low cost credit cards. However, this does not mean you will have to consider borrowing as an option even if there is no need.

It would be better to prefer borrowing only when you are confident about your repayment ability. At the end of the day you will have to meet the payment requirements and pay interest charges. So, having a stable source of income is a must if you are opting to borrow money. You will not be able to afford borrowing if your job or position is in danger.

Diversifying your investment portfolio with reputed companies is the safest choice. Investing money on comparatively less popular company could be risky from the financial perspective. Do whatever suits you the best to protect your finances during the pandemic situation.