In the times of global connectivity and numerous trade routes, the world has become a single unified entity with having various individual elements helping each other for the greater good for everyone. when we talk about this great connectivity, we also talk about the global challenges we face together which could have many direct and indirect impacts over a long duration of time and could affect no matter who you are or wherever you are in today’s time. Thus, you must realize the merits and demerits of such arrangements and be prepared with the best of your knowledge. Covid-19 (Coronavirus Crisis) has grasped the world in the shackles of lockdown for most of 2020 and while everyone is stuck inside their home and hoping for the betterment of the current state that we are in right now. New issues have started to arise which are born from the root cause of this global pandemic. One of the best among them is the new global economic crisis, many countries such as Japan have announced the recession and many western countries are on the verge of it. Expects have predicted that it will be worse than the 2008-09 global recession. Many people have already been a victim of this and many are still in pursuit to find a stable economic source. In a nutshell, now people have to not just worry about their health but also about the economic state of themselves and their families.
We understand that the times ahead might be tough but now is not the time to panic. However, to be responsible and to make any financial decisions with patience and proper knowledge.
The reason we create or need to create an emergency fund is specifically for a time like these when we are unaware of the duration till which the crisis might last and deal with the immediate threats that might be encountered during the way. It could vary from losing your job or an urgent health emergency this fund will be your saver in those situations and help you fall back on these small savings you made earlier.
Talking about how much you should save then it depends upon how much you can cut from your salary and how much is your necessity. It could be a quarter to half of your annual income which could be in the form of fixed deposits or a general savings account. Be very careful as to where to spend this money and don’t blow up on expenses that could have been delayed.
Now is maybe the best time that you start making up a proper budget that you always wanted to and take control of your spending If you didn’t before. Having an emergency budget will be crucial for you and be of great resource but not having proper management and budget could lead to underutilization of this aid. We know that this might be one of the most basics of info that you will need but it is the importance of knowing the basics that will help you during this economic crisis.
As a starter be aware of all the incoming and outgoing money in your household and make a record of it. Divide your incomings into and only requirements that you have or might have during this crisis. Look for places from where you can save money and use it in places that have come up as a new expense or those which were not possible earlier. And lastly, be confident that these tough times will pass make you better at management than you were before.
Small or big we all have some sort of debt that we have taken to fulfill our short- or long-term needs which we repay in the form of monthly installments. But due to this crisis, we found ourselves in this situation when we are not able to pay this sudden amount at one time, due to various reasons which may be health emergency or job loss. To tackle this issue government and many other finance companies have provided relaxation for as long as 3 months to those who are not able to repay their debt.
In case you can in a situation that you can afford to pay then it would be the option of payback those small debts as soon as possible as though relaxation has been provided a small interest is also applied on those who are not able to pay the debt so if you can try to avoid those extra penalties.
For some families even paying house rent is also a monumental task in those situations a small rebate can be given by the house landlord as he also requires a source of income this way both parties will have a sufficient amount to pass through these times.
At times when your primary source of income might be endangered, it’s best to look for other options as a source of income. Diversification of income has been a good opportunity for a long time and is one of the best options to go through right now. As it ensures that if for some reason, we are not earning from one source our whole economic stability is not compromised.
For this you don’t even have to leave the comfort of your house as there are many ways through with you can have an active job from home. various online tutorial methods are available, along with various freelancing jobs where you can put your hobbies into use and earn a few extra bucks with the least effort. This will not just put you in a better place during times of crisis but could be carried on afterward.
There is a perfect time for everything, to go get your dream, buying a car, etc we all have our goals and ambitions which are at a halt due to this coronavirus crisis. It might seem a bit tempting to achieve it but this might now be the perfect time for that, you might be getting a new home loan offer or quitting a stable job to try something new but it might be wiser to wait for a little before jumping on an opportunity that could affect you in the longer run.
Also, at the same time don’t jeopardize your life long plans for any short-term benefits i.e. to either break a fixed deposit without much necessary or selling long term investments that you build over a long duration and with hard work so think carefully and assess every decision you take for the future.
This crisis has affected everyone one way or another, no matter the social status of that person, so the best thing we can do is understand the situation of one another and try to fight it as a team and hope for a better tomorrow.