The COVID-19 pandemic is an unprecedented crisis which has affected all aspects of our life. Whether it is the job, home, or the lifestyle front, suddenly, everything has become topsy-turvy, and lockdown is the #NewNormal. Amidst the additional chores and the demands of your job, have money matters kept you up at night?

The dangers of job cuts, layoffs, and reduced payslips have suddenly become real. Whatever may be the status of lockdown, it will have some impact on your wallet now and in the immediate future. It is time to focus on your money more than ever. If you are wondering 'how' or 'what', let's make things simpler.

Here are four actions that you can take to manage your money efficiently:

#1- Assessment for an emergency budget

With the lockdown in place, you need first assess the changes in your immediate lifestyle and ensure you have enough for your expenses. Think of it as having and executing an emergency budget.

• Hold cash reserves for buying groceries, vegetables, milk, from the local stores in case digital payment modes might not be available.

• Secondly, cut down on unnecessary expenses. Buy essentials as you may need but do not hoard unreasonably.

• Thirdly, review your monthly memberships, like a gym membership, online streaming platforms, DTH subscriptions. Cancel or freeze unnecessary memberships which you won't use during the lockdown.

• Check on your emergency funds progress in case you may need it.

#2 – Assessment of your job and income

Do a SWOT analysis of your career and income. Assess whether your current job would still be there once the lockdown lifts or you need to look for other opportunities. If there might be pay cuts, and you should prepare for the same. Assess whether you are up for appraisals and can you expect any bonus this year.

You need to know the income flow in the coming months to have a clear idea of your finances. In case you anticipate a layoff, use the many opportunities available online to upskill yourself.

Even if your job is not under threat, the new learnings can help you perform better in your current role, and it may give you an option of a side hustle.

#3 – Negotiate your liabilities

In case of job loss or pay cuts, communicate the situation with your landlord (if you are renting for home or business) for a waiver and banks to negotiate a better interest rate(if not a waiver) for any loan that you may already have.

If you have existing loan EMIs or credit card bills and do not have a cash flow problem currently, pay them without default. A default would incur additional interest accumulation, which would put an unnecessary burden on your purse strings.

When there is uncertainty over income, new loans for large non-critical purchases are best put off.

#4 – Invest if you can

If you have existing SIPs, continue them, as your SIPs will earn you more in this market. If possible, start new SIPs, as always in alignment with your life goals, so that you can maximize your wealth in the long run.

There may be much in an external crisis that is not in your control, so simply focus on the factors that you can work on, to make your life stress free.

"Any kind of crisis can be good. It wakes you up." Ryan Reynolds

#budgeting #crisis #EMI