How to Save Money During Pandemic and Avoid Financial Stress?

The COVID-19 crisis has caused immense disruptions in our lives, not just to our jobs but to our health as well. Businesses have been forced to temporarily shut down to support efforts in containing the COVID-19 pandemic, with some even ceasing operations due to the huge losses incurred during the community quarantine.

Due to COVID-19, people don’t know what will happen in the future so decide accordingly.

1. Plan Budget before paying any dues

Remember, the budget plays a very important role to deal with any financial process. Prepare your budget in such a manner where you can divide your savings and spending accordingly. Due to pandemic lot of people lost their jobs, there are salary cuts and businesses are shut. So, income has reduced suddenly. One should revise their budget and plan according to the needs. Check what is more important first; your savings or paying the debt. Reduce the limit of your budget by cutting down all useless expenses. Spend less and save more should be the mantra these days. Use online shopping as you get good price if compare to Shopping Mall Shopping.

2. Build up your Emergency Savings First

You’ll need to continue paying current bills but aim to have liquid fund in your emergency savings account before tackling longer-term goal savings or paying off debt that you may have. Not only will that money provide peace of mind and increased psychological well-being, but it will be critical for the unexpected expenses that will inevitably come

3. Pay your dues if the Interest Rate is high

If you have saved some emergency fund for the future then try to first pay your all your debt. Else, you will get trapped to pay a high rate of interest in the future. If your income is strained to a level where you have to pick between your EMIs and continue you’re saving options, pay your EMIs. Even though you have the option of delaying your EMIs with the RBI-mandated moratorium of six months, you should prioritize paying your EMI dues.

Remember, investing your money is optional but paying your EMIs is an obligation. If you deferred the first five EMIs of a 20 year home loan, you’ll end up paying 30 EMIs. Hence, using the moratorium while you can pay your EMIs is a costly option.

4. Cancel Unnecessary Subscriptions and Memberships

Don’t worry, we are not asking you to cancel your Netflix subscription. But you surely can cancel your gym membership as you can’t really use it during the corona virus lockdown. Similarly, you can find out other such memberships and subscriptions which are either not feasible or can be avoided during the lockdown.  

5. Pay down Debt

After you’ve funded your emergency savings, then it’s time to pay off big debt like credit cards or personal loans. The most important number you can pay attention to when paying down debt is the interest rate start by putting all your extra payments to the debt that is charging the highest interest (usually payday loans, followed by credit cards and personal loans), then go down the list from there.

6. Go for Emergency Funds if your Interest Rate is Low

It’s important to keep in mind that an emergency fund is something that will always help you in need. Nobody can predict the future, so if you think avoid paying EMIs for 6 months by option RBIs loan moratorium option then go for it and save money as an emergency fund. Your emergency fund should be more than 3 months EMIs. You have to cut back as much as possible in order to keep the cash flow. Prepare yourself for any next emergency now.

7. Social Distancing does not mean Social Isolation

Reach out and check in regularly with people you care about. Make that phone call, or even video calls using Face time and Skype. Or send a text or whatsapp. Be part of social media community groups. There are also groups that screen live stream events on YouTube and Social Media platforms. 

Unified Vision Capital is a limited company assisting Large Corporate, Institutions, Government bodies and other entities in assessing their financial requirements and raising funds by way of both debt and equity from Scheduled Commercial Banks, Financial Institutions, Non Banking Financial Companies and private, public, family Fund Houses.

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1. Investing makes your money work for you
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