Covid-19 pandemic has significantly altered the way we live our lives; everything from working, eating, shopping, studying, commuting has changed, and it appears that this is the ‘New normal’.
Lacs of people have lost their jobs or have experienced significant pay cuts as an aftermath of Covid.Such an event can unsettle financial stability of an individual and a household, but it is important to plan for future and respond to the situation at hand. After all, as Winston Churchill said,
“Never let a crisis go waste”
Let us understand how you can turn this unprecedented situation to strengthen your financial health and alter the course of your future wealth building plan.
Gig economy is flourishing
In case you have lost your job or have experienced a sharp dip in salary or business income, you can evaluate thousands of part time assignments that can be done from the comfort of your home.
These freelance assignments help you make additional income and reduce the gap in your monthly earnings.
You finally know what the ‘essentials’ are
When the world went into a lockdown, humans across the globe were forced to identify the bare essentials needed to survive, thereby creating a stark distinction between the ‘must have’ as against the ‘good to have’ items and expenses in our daily lives.
Food, electricity, gas, education, and health are some of the expense classes that have remained as important as they were pre-Covid with some moderation seen in the amount of use of such items.
Studies have indicated that almost all individual and household expenses in India have dropped by up to 70% during this lockdown.
Hopefully, as the society recovers from the pandemic, you will be able to make a distinction and identify areas that you could easily cut down on and increase your monthly savings.
The pandemic has forced people to think about emergency plans
This perhaps is the single biggest influence of Covid-19, where the entire society has been jolted and forced to think about saving more than splurging and not taking current income and lifestyle for granted.
There was large scale build up of fixed deposits and opening up of new demat accounts during the period of lockdown starting April 2020 in India where people started experimenting with various investment assets including investment in stock market which can help people make superior returns if invested wisely.
This responsible behaviour towards saving for the future can help instil a disciplined approach in the society, thereby enhancing financial security at an individual and household level.
Create a budget and financial plan so as to not splurge on the rebound
The pandemic shall pass, and the world will hopefully be back to normal sooner than later. What is important is, how one responds once the curbs are lifted and manages the financial priorities at that point versus addressing the pent-up needs.
You can use the time that the work from home regime is offering people so as to assess your financial condition, needs and future plans, may be even with the help of a professional financial advisor.
While Covid-19 is a full scale socio-economic and humanitarian crisis, as individuals we can only learn from the situation and resolve to fight back so as to emerge stronger.