Managing Finances during Covid19: How to do it effectively!
It did seem like the world went ahead and paused itself this year due to the Covid19 pandemic. The world is getting greener, the ozone hole is closing back, nature is thriving, and wildlife has found its natural course. Parents get to spend more time with their kids, mankind has understood the importance of mothers in our day to day lives, and any hotel dish that is bought can be cooked in their respective kitchens, no rocket science behind it.
Now that shopping malls, public recreational places, movie theatres, etc. have come to a standstill, it is evident that only the bare essentials are what has been needed all along and that advertising has all this while got us chasing things that we do not need. When nothing is at arm’s reach, you opt for the next immediate thing available. Digital marketing platforms promoting food and beverages, entertainment and education has seen a welcome surge.
We live in an era where we use people and keep things. At heavily pressurized times like Covid19, one might find themself not able to/struggling to manage their finances. Stress, work-life imbalance, lack of concentration, and motivation get to our heads, and we calm ourselves down by buying things. This includes your Impulsive spending category, regular Shopaholics, and Boredom buyers.
Be it with work from home folks, or people with reduced paychecks and annual bonus deferrals, you will understand the importance of money. Just like spending is a habit, saving is also a habit that one must highly cultivate. As much as a stitch in time saves nine, your savings would help you out during any financial emergencies or even as a backup to rely upon.
- Money should be turned into an Asset.
Money is a mere liability in its raw form in your hand. Plus, the more you have it, the more you will be driven to spend. The real key to effectively manage your finances is by converting your money as a profit yielding asset. You can do this by investing your money in a proper insurance plan, in Share Market trading, Real Estate investment, or buying things that grow in value as they age.
- Opt for a good insurance plan
Wait, I get your question. How does getting a better insurance plan help me manage my finances?? Well, it does. A good insurance plan would make you feel less worried in case of a virus attack or save you from the final bill that gives you a heart attack. This is a life investment, one that should not be treated lightly.
- Share Market and Mutual Funds investments
Financial Literacy is something that is not taught in schools but acquired over a period of time. These unique skills and knowledge help you make wiser decisions with your money. One such thing is the share market venture. If you are someone good with numbers, you can invest your time and money into learning how a stock exchange works, the concept of being able to buy and sell securities of a particular entity as shares and bonds and predict the market trend and cash in when the tide is high. Mutual Funds are a safer option for people who think otherwise.
- Real-estate investment
For people who want to double or triple their money, real estate is a suitable option. Yes, agreed. The prices are at an all-time low due to the pandemic, how will I profit? Well, should we point out that this is just temporary and more business units will resume operations or jump start and more job opportunities will pave the way for the urbanization of communities and development of local bodies like schools, hospitals, and supermarkets.This will indirectly boost up land value prices. An early retirement sees a very optimistic potential with real estate investments for rental/lease and sales.
Things to be cautious about
- Prioritize Needs over Wants
Identify your needs and wants. A need is something you must have to complete something. A want is something that is born out of desires and choices. Give priority to your needs, family needs, and healthcare needs and ignore others till the economy stabilizes.
- Avoid/minimize impulsive spending
When used for buying things, money should always be treated with a logical mindset and not an emotional one. It is easy to be misled in this advertisement induced environments. The key here is always to sit back, take a quick pause, find the purpose of buying something, and if it answers the question of “why do you need this“ without any forced justifications, you are good to go ahead with the purchase. If not, re-think and try to make peace with yourself on the decisions that you make.
- Beware of MLM’s and quick/easy money fish baits
Beware of fraudulent scammers with a colorful picture of an MLM lifestyle, or online betting events/games that tempt you of quick, easy cash. These are click-baits designed to swindle the common man and would never help you sustain in the long run. Please stay away from them!!
- Look for offers/ reward systems
Always look for a coupon code, a discount that runs for stuff you need, and apply them to get good deals. Most supermarkets have reward systems for Credit cards, so use them instead of counting your green bills.
This lockdown is temporary, and our lives will return to normalcy, but the lessons we learn are permanent. Your financial choices decide whether you can sleep comfortably at night or become a worry monger. Think sensibly and act responsibly.