Personal Finance Tricks in Pendemic Scenario- Covid-2019 has created huge impact on everyone life. Whole world is stuck like never before. Full economic activity has been closed since 3 months. Job losses, salary cut, lay offs are comman problems in current scenario. Many countries are facing economic turmoil and world’s stcok marketes are facing pendulum volatility. Savings and investments cycles are broken due to inadequate cash flows. The world is trying to overcome from such a horrible pendemic. In such an enviroment, how you can protect your personal finance including your future goals and cashflows? There are certain proactive measures can save you from deterioration of savings and investments:
1] Create Emergency Funds:
As we are aware many people are affected due to pay cut or job loss. Many people are facing cash crunch due to not planning of adequate emergency funds. Ideally, 9-12 months of monthly income should be saved as an emergency funds. There are various options available to park funds which is based on your risk tolerance level.
2] Proper Cash Flow Planning:
Monthly budgeting plays an important role in overall personal fiannce. Life style expenses are increasing very rappidly which cost unbalance in monthly budgeting. Heavy EMIs, children related expenses, enetertainment expenses etc. are major parts in cash flows. Proper cash flow planning helps to align monthly budgeting. Try to save 30% of net monthly income for future goals.
3] Insurance- A Mandatory Protection:
Insurance is totally misguided concept due to mis-selling of various insurance products. The real purpose of insurance is to provide self and family protection in such an uncertain events. There is a fundamental problem in life insurance that people buy as an investment products. Term Insurance is the only suitable option in Life Insurance to protect your family. Never buy any life insurance products excepts term insurance. Health insurance is also cruicial part in risk management. Idealy health insurance cover give you a help in hight cost medical expenses. Buy simple health insurance with super-top plan which solve your health insurance needs.
4] Selection of Investment Products:
There are plenty of investment products and solutions available in the market. Sales forces are trying to sell as much as they can. In such a situation, it is wise to take conservative stance while choosing investment products. Your risk appetite and investment time horizon are also critical factors. Do not buy any wrong products in any panic mode just because interest rates and stock market are volatile. Stick to the wealth protection level in current pendemic scenario. Review your current investment with professional to ensure they are right match or not in current scenario.
5] Role of Estate Planning:
Many are thinking that estate planning is only for hight networth individuals or who have huge amount of money and investments. This perception is false because each on of you need to have Will or Living Trust to protect your legacy.
6] To Have Personalised Financial Life Planning:
Each one of you have different financial life based on income-expenses, current investments, life goals and risk taking capacity. Therefore, everyone should have their own Personalised Financial Life Plan. Life Planning docuements gives you a clear roadmap towards your entire life. Never plan investments or savings without Life Plan because every investments should have clear direction and view to achieve financial life goals. To avail Personalised Financial Life Planning