The COVID 19 calamity has not only spelled disaster for human health but also spilled its effects on economic activity worldwide. With countries coming to a standstill, and lockdown measure initiated to minimize the impact of the infection, a lot of businesses and organizations are on the brink of collapse. In such a scenario, many people have been subjected to salary cuts while a few unfortunate ones have lost their jobs. And in some sectors, employees have been asked to go on indefinite leave without pay. Those facing deduction in their paycheck, are now working on a salary that they were probably drawing a couple of years ago, setting back their careers and causing financial distress. So what can one do during such unpredictable times, and what measures to adopt to ensure one’s financial well-being?
Here are some points that may help:
Work your monthly budget based on this revised paycheck and find areas to cut back. List out essentials one side and luxuries on the other, this will help in curtailing certain unnecessary expenditures.
These are expenses that are more often seen as “wants” rather than “needs”. But it is different from variable expenses that are required to live comfortably like groceries, light, water or maintenance bills, and so on. Discretionary expenses apply to costs that are non-essential in a household and can be put on the back burner till the finances are back on track.
Times are tough, so try to save up as much as you can. Be a responsible buyer and purchase only what you need while avoiding to stock up on perishable items. Plan on reducing your monthly bills like; for example, aim for optimal utilization of water and electricity. If the lease period of your accommodation is over, look for a place that is reasonable to live in. If there are any major repairs to be undertaken in and around the house, prioritize those depending upon the influence it would have on your comfort.
When you are making cuts, it would be tempting to pull back from investments for the time being. While it can be done to preserve cash during this time, it may hurt your long term saving goals. The best way is to do away with unnecessary expenditures and push the maximum amount towards savings or investments.
With the volatile economic situation, it’s wise to be cautious with one’s spending habits and other financial goals. Times like these not only calls for taking care of one’s physical well-being but also to be financially responsible. If you have dependents or are staying away from your families in a different city, be prudent in chalking and sorting out your finances. Our personal and professional lives may have taken quite a turn in the light of this pandemic but it is crucial to not lose hope and keep preserving because this too shall pass.