How your financial planning will protect you from next global pandemic?

        For the last one and a half years, the whole world has been experiencing a global pandemic. It will forever change many lives individually, entire families, and future generations. Many have lost their loved ones which can never be compensated. Several people are losing their employment. The psychological and economic impact of the Covid will never be forgotten, but some lessons can be learned. 

      From a financial and economical perspective, it will be important to learn from this experience that some things are beyond the control of anyone and you have to be better prepared for the future. In addition to your health and safety, one of the biggest stressors may also be your finances. Pandemic creates some painful financial lessons for us but at the same time, it’s an opportunity to understand how to tackle these unexpected situations and how your financial planning can protect you from these situations. Let’s understand it!

 

• Protect those you love most:

       If someone is the primary income earner of their family or one’s household would struggle financially if you pass away unexpectedly, having life insurance is smart. It ensures that, if someone takes an exit from life, they have ample cash that can help them to sustain their future expenses and maintain their standard of life. Initially, people thought that only some age groups were at risk of dying from the pandemic. However, the time has shown that isn’t necessarily the case. After all, life insurance is all about preparing for the unknown. If your family members rely on your income, it’s worth exploring, no matter what your age.

 

• Buy your health insurance now and secure your future:

      Health insurance is to ensure precaution is better than cure. The current covid pandemic has made us realize that medical emergencies are unpredictable and can cause financial disruption which is tough to afford. With a high infection rate and lack of proper precautions, people have started to understand the importance of health insurance. Besides, with the rising cost of medical expenses, access to good medical facilities and hospitalization costs can be financially tough. Therefore getting health insurance cover for yourself and your family can add protection you need in times like these. Apart from the obvious benefit of having the financial confidence to take care of your loved ones, health insurance is extremely useful in beating medical treatment inflation.

 

• Create a financial safety net:

     Covid has not only affected the health of people around the world, but it massively makes an impact on every person’s financial situation. Thousands of people lost their jobs. Having a sturdy emergency fund makes sudden unemployment or other financial hardships significantly easier. An emergency fund protects you during unforeseen events and affords you flexibility. The mere act of contributing to an emergency fund is stating,’’ I live in the present but preparing for the future, where anything can happen.’’ We should have adequate savings for such unprecedented situations. One can set aside at least six months of living expenses; they have a substantial buffer that can cover gaps when income is unsteady. It will help you be on your bills without getting yourself into debt to pay for the necessities. Emergency funds will definitely give you stability when lives get rough.

 

• Strive at multiple sources of income:

      It is more important to get 1 rupee in 100 ways than to get 100 rupees in one way. Because if for some reason the 100 rupees coming from one way is stopped, it becomes difficult to live. But even if 10 out of 100 ways are closed, we can live upon 90 rupees which are coming from the other 90 ways. There are some other ways of income apart from your primary income source such as interest income, dividend income, rent, agricultural income, etc. We should not depend on one source of income. If one dries up if regulations change if policies change, or disruption occurs you have options to maintain not only your lifestyle but thrive.

 

•  Pay off your debt:

     People who had no debt when the pandemic hit were able to ride the storm better than those who had a huge amount of debt. Suppose you have a large number of debts and liabilities and during the peak of the pandemic you lost your ONLY source of income then what will you do? So, it’s always better to keep your debt low or have No DEBT at all. I personally follow this rule. If I can’t afford it, I never borrow money to have it. The result is, I work hard and save until I can afford it. Instead of paying interest for debt, it can be used for savings and investments.

         This pandemic damages many lives physically, psychologically, and financially too. Also, we learned so many things from this global pandemic. Many countries started to rebuild their economies, then why not you? Analyze your finances, clean up unwanted products and boost your financial savings. I hope now you better understand how your financial planning will protect you from any uncertain situations. I am glad that you are still reading now, it means you are determined to make your life better. Stick to your financial goals. 

Happy Investing!!

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