Coronavirus has everyone worried about many things – your health, the health of your family, friends, job, and mainly money. With the economy taking a hit, many of us have been affected financially. Now is the time for us to be smart about managing personal finances. Let’s see how you can keep your finances secure during this time.
- Reconsider Your Budget
Pretty sure you had a budget in place before the whole coronavirus situation. However, the current conditions may have impacted your income or your budget. Maybe you received a pay cut at work or were sent off on unpaid leave. If that is the case, you need to go back to your budget and revise it a bit.
Make a new budget and stick to it to get through these rough times. Put some money into an emergency fund. Take a personal line of credit if you are falling short of cash or need money urgently.
- Consult Financial Experts
If you are unsure of managing your finances, don’t adopt a trial-and-error method. It would be wise to consult financial experts to understand how you should invest your money. With proper finance planning, you can weather this storm without much damage.
- Make All Payments on Time
If you have credit card bills or other debts, don’t delay their payments. Try to make at least the minimum debt payments by their due dates every month.
Missed or late payments will impact your credit score. Don’t let this crisis affect the score. Try to make every repayment on time, even if you are paying the bare minimum to your creditor. This way, you will still have a good credit score when the situation normalizes.
- Contact Lenders if Needed
If, despite your best attempts, you are unable to pay your bills on time, contact your creditors before you miss a payment. Check if they developed any policies during this time that allows delayed payments without affecting your credit score.
Don’t hesitate to seek help from financial counselors to manage your existing debt if you are unable to do so on your own. Financial experts can offer you practical and efficient debt management solutions.
- Take Care of Your Health First
While you take care of your finances, focus on protecting your health and that of your family as well. You must have a financial plan in place if someone in your family falls sick.
- Control the Spending
This is a good time to cut back on your spending. Determine where you have been spending most of your money before the pandemic started and find new spending priorities. Maybe you spent more than necessary on eating out, clothes, or gadgets. Track those expenses and look for ways to cut back on non-essential things.
It is absolutely necessary to build a cash reserve and your emergency savings. We don’t know how long this situation will last. So, it is better to save as much as possible so that you can ride out these tough times without financial worries.
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Views are personal