COVID-19 outbreak: How to ensure financial security during such a crisis?
Change in a financial plan due to sudden crisis or miss-happenings are neither planned in advance nor advised, if long term financial goals are to be achieved. During our lifetime, we barely have 2 decades to decide the fate of our next years of life, where should all our savings be invested.
Usually, all savings get swiped-in during the late ’20s or early 30’s it is advisable to invest wisely. It will be onerous to kick back to work, once you reach the 40s or 50s with no financial support or overspending or indulging into debt financing for achieving life goals. The only way to be ahead of all life crises is to start the saving cycle during the remunerative period of late ’20s or early ’30s.
The pandemic coronavirus spread all over the World, is a classic example for all those who do not opt for any financial protection and rely on their paychecks to support their monthly expenses. The lockdowns amid such crises all over India make us realized how being financially secured like this is significant along with insurance & other investments should mean for a wage dependent.
Many financial planners emphasize that the longer the duration for starting the savings, the more critical it would be for a person to regain control over the financial setbacks. While the thumb rule says be prompt for savings, not for excessive tax saving but to frame a financial shield for life to face a crisis like Coronavirus.
How to be a warrior of any financial crisis?
Experts say Insurance is a fundamental tool and a component to fight unforeseen circumstances. It not only helps to meet unforeseen situations but also ensures the meeting of life goals regardless of market volatility. For instance, life or health insurance is made to provide health protection benefits over the long term or term insurance is one that can be opted to secure the entire family. Those who possess multiple liabilities in the form of home loans, car loans, health treatments should prioritize their goal of investing in insurance products.
Those who are near to their retirement, the sums invested in any annuity scheme assure returns and financial support even they get to home after retirement with no other income support. Annuity plans are much secure when you opt to plan for a stage where no other financial instruments will work and you require regular income to support your medical and life expenses.
If stuck in any financial muddle, trimming of the household expenses is also essential, a disciplinary spend over life maintenance is sufficient. This does not mean cutting spend over policies or term plans as they are to stabilize your propensity to spend.
Keeping long debts overhangs your financial goals. Try to put maximum in your high-cost loans as soon it can be, even liquidate all assets which far fetch or yield low returns to repay your debt.
When facing a pandemic like Coronavirus or any other extended illness, one of the immediate concern is to be put for the liquidity needs for such situations. Setting up a systematic plan for time bound withdrawals from low yield investments and debt funds is an effective way to take away all immediate needs.
Try not to loose way in any financial crisis during your lifetime, outlining a purpose behind each rupee spend is a necessity. Rethink for dilutable goals or events which does not require much outgo of expenses, not compromising clear necessities of retirement investments and children education. Give priority to fixed income portfolio investments like annuity or term plans rather than locking funds in a fixed deposit which does not even pass the inflation effects. Choose the right investment and ensure you have the right advisory.
Staying invested in a disciplined manner overcomes impacts of market movements and any emergencies. Better you start off gradually and through balanced funds. This will lead a steady growth in your savings.
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