While the unprecedented second wave of Covid-19 pandemic is ravaging India, ‘Immunity’ is the buzzword during these days. And marketers have used it well to their advantage and have started making ‘Immune Boosting’ claims. Immunity from the pandemic shock is required from the financial perspective as well. But what does developing financial immunity really mean:
1. Plan and actively manage your finances: Personal financial planning is of the utmost importance. Income, expenses, savings, investments and credit need to be aligned to the family’s short-term and long-term needs, wants and life goals.In a vacillating global economic environment, it is important to take advantage ofthe opportunities as well as stay prepared for exigencies. Financial planning
helps one stay in charge in both these situations. It is also important to actively manage, revisit and revise plans, and implement changes in tune with changing needs, wants and the overall economic scenario.
2. Life Insurance, Health Insurance are sound planning tools: Life is uncertain. The pandemic has not only proved this to the world, but also shown us how unpredictable life can be. Hence, ensuring financial security for the family is of top priority. Investment in a life insurance plan should be made towards ensuring adequate coverage for the family i.e. an amount which would keep the family financially stable in case something were to happen to the bread winner. Health Insurance for the family is a must too, considering the increase in lifestyle-related diseases and rising healthcare costs. Good health being a basic necessity, these costs can neither be ignored nor negotiated. Hence, it is important to have satisfactory health cover for the entire family.
3. Arogya Platinum Card; a pre-approved medical loan: If the health insurance is inadequate and also to cover health expenses that are not covered under insurance, obtaining a pre-approved medical loan from Arogya Finance, through Arogya Platinum Cards, could turn out to be a prudent decision.
4. Save for an emergency fund: An emergency fund can help one stay afloat in times of financial crisis. The value of such a fund should be a minimum of 6 – 15 times the monthly family income. Also, this fund should be quickly and easily available as cash, if and when required. Most importantly, the fund should be considered sacrosanct – one should utilize only in case of an emergency.
5. Avoid the debt trap: In an era of rising consumerism propelled by a mix of factors like better spending power, product innovations, inciting marketing gimmicks and easily available personal credit options and facilities, one can end up in a debt trap. This debt trap not only hurts financial planning but can become ruinous in times of economic crisis with interest mounting on unpaid dues and
adding to the borrower’s liabilities. This results in lower Bureau score further affecting any individual’s ability to borrow in emergencies.
6. Diversify investments: A basic tenet of successful investing is to diversify investments across different asset classes – equity, debt, gold, real estate etc. This helps not only to reduce risk but also to optimize returns. It also essential to keep the investment duration and goals in mind when choosing financial instruments. For example, equities, mutual funds.
7. Minimalist lifestyle: It’s all about realizing that we don’t need much to live a happy life. Excessive consumerism – foreign tours, bigger house, attractive car, more clothes, latest gadgets etc. just push our desires to the next level and always keep happiness out of reach. Living a simple life, focusing on family’s needs, reducing wants and developing healthy spending habits not only ensures financial prosperity but also contributes to mental and emotional well-being.
8. Don’t be afraid to ask for help / financial counselling advice: Once you have grown your savings, and you want to begin investing to increase your wealth, speak to experts to help you make wise investment decisions and don’t succumb to tricksters. If your parents or other family members are good with money, consider asking them for help, and talking to them about what worked for them financially and what they would have done differently. It doesn’t have to be a difficult experience to get your debt paid off, money saved, and progress made towards your financial goals. Invest in yourself and your financial future so that you won’t ever need to worry about your finances again.
To sum it up, financial discipline and prudence is required to sail through the ups and downs of life. The second wave of pandemic might go in a while, but if we are able to retain, imbibe and implement the learnings from this crisis, we would be ready for the next time adversity strikes us.
