COVID – 19 pandemic has hit every nation in the world and India is no different. With precautionary restrictions and lockdown in effect, lives of all of us have taken a major shift, grappling with things like working from home and moving to digital transactions and balancing work & home chores to lapses in business opportunities and delayed payments and salaries.
The lockdown has impacted many businesses and delayed salaries are not an uncommon thing. Such chaos has made things quite challenging, leaving you juggling with your finances to make ends meet. Caz, whether you receive your salary or not, you still need to pay your bills and have necessities at home to survive. With no inflow of cash, the situation can be pretty stressful. Well, don’t lose hope yet. There are still ways you can best manage your finances and be in control of the situation. So, what can you do?
Work on a 3A Plan – Accumulate, Analyze, Action
This is the 1st step. Accrue your financial data in this step. Use a separate journal or excel file to list down all your financial details. This will include all your savings – fixed deposits, mutual funds, SIPs, emergency funds, etc. Wherever you have, whatever you have, list it down. Other than your savings and investments, also list down your monthly and quarterly expenses.
Once you have every smallest of your financial detail on paper, you have a vantage view. Start with expenses. Evaluate every outflow. Divide them into categories – Urgent/ Important, Urgent /Not Important, Not Urgent / Important, and finally Not Urgent / Not Important. You can make a quadrant and divide all your expenses under these four categories. Clearly, all the expenses under the last one, are the least priority or maybe unnecessary ones. Then come to your savings. You can categorize your savings in a similar way. Divide them into Flexi & Fixed Funds. Flexi funds like your emergency funds, SIPs, etc. are the ones you could use on an urgent basis. Fixed investments like equity, mutual funds are market-linked and offer little to zero flexibility of withdrawal without considerable financial implications. This exercise will help you curb on your expenses, prioritize the most important payments which require immediate attention, identify available funds from your very own finance pool, and manage things better.
Once evaluated, take charge. Focus on only the necessary expenses. See whether you can use funds from your existing investment pool. You may need to do a few things for that. For instance, whether you are looking at utilizing at your SIP money or simply put its payment on hold. You would need to talk to your bank before you settle in with your decision. It is quite possible that your savings may not be enough to take care of all your necessary payments. In which case, take advantage of every benefit or relief you get from your vendors. Like your EMIs. Request and avail for a brief moratorium. If you are paying rent, talk to your landlord and see if you can get a deferment there as well. This will give a window period of relaxation to manage your other expenses. If your salary is only delayed, you need to only manage a short period before you get back on your feet. You can also apply for a short-term personal loan online to meet your emergency expenses