COVID-19 has brought life to a standstill and has disrupted daily living. People are forced to stay indoors and work from home. For many, there have been cuts in salaries and for others, they have lost their jobs. Managing finances has become a tough task these days. With limited resources in hand and uncertainty about the inflow of money, effective use of the money that is available is of utmost importance to sail through this pandemic.
A proper plan is required to manage the funds so that the inflow and outflow of money can be monitored to avoid any unforeseen circumstances. Here are some ways in which one can better manage money in COVID-19:
Reduction of expenses
Reducing the expenses during Covid-19 is essential if one wants to save money. Though because of work from home, many expenses have already been reduced like going to movies, clubbing, shopping, eating out at restaurants, etc. but still, it is necessary to curb expenses. It is necessary to make a note of all the money that is being spent during the pandemic, to make sure that there is no overspending on any unnecessary thing.
Online entertainment
With people stuck in their houses for days, the consumption of online data has increased to a great extent. People have subscribed to OTT platforms to enjoy the plethora of movies and series available on them. For example, though people have a subscription to Netflix, they are still buying subscriptions of other OTT platforms, which they rarely use. This is an added expense which many people are incurring. This is one expense which people can cut and save a lot of money which can be used elsewhere.
Rent
Rent is one expense that eats up a lot of money. COVID-19 has been an exceptional event that has changed the equation all around the world. One can try to convince their landlord to reduce the monthly rental of their homes. This is a humanitarian crisis and a request to the landlord would surely work in the tenant’s favor. Once the rent is reduced, considerable money can be saved. This money can then be utilized for essential purposes.
Loans
If a person has to pay EMI, then it is necessary to manage money, especially during COVID-19. One can avail the facilities of the bank, where there are schemes of lower interest rates. If one has absolutely no money to pay the EMI, then one can request a moratorium to the bank. This will ensure that no EMI is paid for the stipulated time. There is also an option to switch loans. One can go to a lender that offers a lower interest rate than the one being charged now.
Credit card payments
In a time when salary cuts, job losses are a common scene all over around, a lot of money can be saved if the credit card payment is handled properly. It is important to negotiate the terms with the credit card providers and avail the facilities that work in their favor. Similarly, pay any dues on time to avoid penalties and other charges.
For example, if you run a child care franchise and make the payment for the childcare franchise payment cost via credit card, make sure that you do it on time to avoid extra charges from the bank and the franchise too.
Re-evaluating budget
Re-evaluation of the household budget is an essential measure to be taken during this pandemic. This can ensure proper management of the household. Drastic changes may be needed to be taken since there is an uncertainty of income. A proper demarcation of essential and non-essential items has to be chalked out.
Until the threat of this pandemic abates, it is important for people to stop their expenses on non-essential and luxury items. It is advisable to have an emergency fund in hand. This emergency fund can act as a savior in these trying times. This will ensure that any threats in the future can be handled properly.
Selling of stocks and investments
Though due to the pandemic a little amount of money is available for investments, one must still invest wisely. This would be helpful in the long run. Also, owing to the financial crisis caused by COVID-19, many people are selling their share of stocks. Selling for stocks is not an advisable option to raise money.
Due to the pandemic, the real value of stocks has eroded and the money obtained after selling them is very less than what would have been obtained otherwise. Selling of stocks during the pandemic, in other words, is nothing but monetizing your losses. Once the situation is under control, most of the stocks would regain their value and the volatility would be reduced to a great extent. So, if possible, people should refrain from selling stocks to raise money.
These things can help you pass through this pandemic and emerge unharmed. More importantly, when this pandemic ends, people will be in a much better position in terms of finances.
