The COVID-19 pandemic and the subsequent economic downturn has forcedmany to change their financial plans. For most, long term plans have all of asudden gained precedence over everything else.
When it comes to long term plans, savings play a crucial aspect and inthese unprecedented times, it is absolutely imperative to get rainy-day fundready and get to filling that savings jar that's been collecting dust.?It is also imperative to account for worst-case scenarios likeunemployment or massive pay cuts and adopt a conservative approach when it comes to planning holidays, dining out and commuting. Saving your cash is probably the right thing todo.
Here are a few practical tips to helpyou work on your savings in the middle of a pandemic:
Taking control of your finances is absolutely essential in times likethese, monitor your spending and make sure to see where you're stepping out ofyour limits. Start with the 50/20/30 budget rule. Senator Elizabeth Warren popularisedthe '50/20/30 budget rule' (sometimes labelled '50-30-20') in her book 'AllYour Worth: The Ultimate Lifetime Money Plan' originally published in 2005.The thumb rule is to divide up after-tax income and allocate it like this: spending 50per cent on needs; 30 per cent on wants; and 20 per cent to savings.?
Also read:?8 Ways The Indian Millennial Can Manage Money Better
Financial wellness is just as crucial as physical andmental health. How we spend money is determined by our upbringing, our thoughtsand our feelings. Removing these negative feelings about money can help oneovercome money blocks and change our financial situation. Recognise your spending triggers and the emotions associated with them in order to manage money better and with a positive outlook.?
This is one of the most ignored aspects of moneymanagement. We tend to operate basis the false impression that saving just alittle amount won't make much of a difference. On the flip side, the attitudeis what counts regardless of how small the amount is. Do remember to find the bestinterest rate for your savings.
Activate a sufficient amount of cash as it shall be abuffer in tough times. If you are low on cash, you might look at the options ofgetting a loan against your fixed deposit. Keep in mind, in the face of aliquidity crunch, credit card usage is advisable to?the extent that itfulfils your minimum requirements. It is important to maintain fiscaldiscipline during this time.
Also read:?How To Manage Household Finances Better In The Middle Of A Pandemic
An easy way to get more money back in your wallet is to cancel monthlysubscriptions, such as streaming services, meal subscriptions etc. The COVID-19pandemic has turned into an accidental experiment in spending behaviour thatbusinesses and academics are analysing closely. Unprecedented times have forcedmore people into frugal living where long term goals and happiness are bothtaken into account.
At some point, we have all probably compared ourselves to someone else. Thingshave gotten all the more complicated thanks to consumerism, social media and the advertising world that lure us into owning more things. It¡¯s a habit that manyof us have fallen for and we don¡¯t evenrealise it. Where you are on the ladder of accomplishments has nothing to do withhow rich or poor you are. You cannot put a price on your health, marriage andrelationships. If you want to know how to stop comparing yourself, not justfinancially, but in general, it all starts with being true to who you are.
Gratitude can change your life because it makes youappreciate what you have rather than what you don¡¯t have. Yes, the pandemic hashit a lot of us very hard, but it's always good to remember that none of it isyour fault and it's the work of external forces. Be kind to yourself andtake solace in the fact that things will fall into place sooner than youknow.
Also read:?Did You Have To Take A Salary Cut Due To The Pandemic? Here Are Some Ways To Manage Your Money