Here’s how to change your financial solutions in the pandemic
The ongoing COVID19 pandemic has had far-reaching effects on the economy. Personal finance took the biggest hit at the individual level, reporting cases of job cuts, reduced wages and the activation of loan moratoriums across the country. It is also something that is rarely discussed because everyone has different options and no solution that suits everyone.
But now that the economy is slowly recovering, it’s time to fine tune your finances. It would help if you created a plan that gives you more power with your wealth as you try to stabilize your financial resources and affairs. Here’s a quick guide to help you get started.
This is the first thing to ask yourself. Has the pandemic affected you? If so, in what way?
If your finances have been affected – either through a job loss or a medical emergency – you need to indicate these specific changes. This can deplete your cash, an amount borrowed from a friend or an overdue payment of an installment.
A list of affected areas of your finances will prepare you for the type and degree of change you need.
Status of existing and ongoing investments
The next step is to evaluate your savings and investments. Blocking the excess money (against your monthly average) that you have spent (to get through the pandemic so far) and the shortage you may have, what does your profile look like? Did a job loss or a pay cut affect any of your investments? If so, in what way?
The answers to these questions will help you plan your next steps.
Adjusting your finances – two-pronged approach
You can start with two things:
Restore or replenish your liquid emergency fund
Customize some of your investments: –
You can start with two things:
-Recover or replenish your liquid emergency fund
-Tread some of your investments
It is important to have an emergency fund, so start by recreating or replenishing it. The pandemic is not over yet and you may need to dip into it again in the future. So hold it to the brim, or maybe even increase it.
Next, focus on replacing existing investment instruments with those where you can earn a higher interest rate. Equities, government bonds (PGIs) and mutual funds are great opportunities to invest your money for long-term benefits.
Use mutual funds and other high-interest rate instruments
Investing in mutual funds is a good investment path, but the risk of market volatility deters many. Therefore, it is a great way to sail some of your money into mutual funds through this pandemic carefree.
A better financial plan means better decisions and better decisions tailored to support you on rainy days. Creating an emergency fund and investing in mutual funds are two possible ways to stabilize your finances. Use the following Wealth Builder Calculator to plan your investment strategy smartly. Or consult your financial advisor to help you.
Mutual funds are subject to market risks. Read all scheme-related documents carefully.
To learn more about KYC documentation requirements and procedures for changing address, phone number, bank details, etc., visit https://bit.ly/36BTr0u. One-time KYC registration is mandatory for investing in mutual funds. You can complete your KYC by submitting the following to one of our branches or collection centers: a) duly completed and signed Central KYC form b) ID Certificate and Address Certificate: Any document issued by the State, self-certified. PAN is mandatory for investment in mutual funds. c) Proof of address: Same as proof of identity (except PAN) d) Latest passport photo. Originals must be brought for verification. Investors should only handle / invest in SEBI-registered mutual funds. Details are available at www.sebi.gov.in. Investors can reach us at + 91-8048893330 or write to us at firstname.lastname@example.org. For escalation, write to email@example.com or submit your complaint to SEBI through their SCORES (SEBI Complaint Redressal System) portal at http://scores.gov.in.