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In times of economic volatility or a global financial crisis such as the one induced by the COVID-19 pandemic, it is natural for you to be worried about your finances and monetary security. The COVID-19 pandemic has hit your finances hard. Several people have lost their jobs, received a salary cut and lost their portfolio values. Households are struggling to meet their everyday expenses and the heightened medical costs. The lack of preparedness has forced many to reassess their financial situations, adopt secondary sources of income, and even take extreme decisions to navigate through a financially perturbing situation.
However, it is possible to find a financial solution to tackle this uncertainty in your life. You can relook at your finances and opt for sound investment options like a guaranteed# return plan to prepare for the unknown future.
Techniques to work through financial uncertainties
Live frugally: One thing the COVID-19 pandemic has made clear is that you do not need much to live a happy life. However, you must have enough if ever you are faced with a financially demanding situation. If you learn to live consciously and not miserly or superficially, you can easily save more and prepare well for a financially tiring situation in the future.
The objective is not to devoid you of the basic things or even some luxuries in life. Instead, the idea is to live within your means and not spend your hard-earned money irresponsibly. Every time you spend thriftily, ask yourself if you need it. The actions might seem small, but they can help you save a lot for your future. Instead of splurging your money, you can keep it to fulfil your financial goals or meet an emergency future need.
Create a budget: The first step to live within your means is to create a budget. You can list down your discretionary and non-discretionary expenses such as grocery, electricity, water, etc., and accordingly, assign a defined sum to each item on your budget. It is wiser to keep discretionary expenses, such as online subscriptions, eating out, shopping, etc., to a minimum. The goal is to create a zero-based budget, where each rupee that you spend has a defined purpose.
Once you create a budget and meet your budgeted limits, you will be able to save more. You can save your money in easily accessible bank accounts or cash. However, this will not allow your funds to grow over time, which is not a wise move. Instead, you can consider investing in a smart plan like a guaranteed# return plan that will provide you with a guaranteed# return on your savings along with a protective insurance cover.
Create an emergency corpus: Apart from saving to invest, it is also important to set aside a corpus for a future financial emergency. As per experts, it is prudent to keep at least three to six months of your living expenses as reserves to meet any unforeseen event in the future. Your living expenses are a sum of your rent, household costs, medical bills, loan EMIs, mortgage, tuition fee of children, etc. You should also factor in the cost of inflation when reserving for the future.
Your emergency corpus should be ideally more than the precise sum of your three-month living expenses. This emergency corpus should be reserved in a medium that is easily accessible to you during tough times. Moreover, you should have strict rules for its accessibility in terms of circumstances that will qualify for a financial emergency. For instance, a period of job loss or a sudden medical expense, etc., is an emergency. But the need to buy a new car is not a critical situation.
With guaranteed# return plans, you get the double benefit of a guaranteed# insurance cover and assured returns. The insurance policy can protect your family in case of your absence. The guaranteed returns can provide you with financial security during challenging times, such as a job loss or salary cut. The guaranteed# return insurance plans ensure that you meet your financial goals and turn your dreams into reality. You can opt to get payouts from your guaranteed# return plan as a lump sum, regular income or whole income benefit, as per your preference.
In a financial crisis, things can get stressful and overwhelming. You might need to explore all options and consider utilising resources and making sacrifices you never considered before. However, if you put in place a strategically sound financial solution, you can easily navigate through the hardest of uncertain times.
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