Due to the Coronavirus (COVID-19) pandemic, the world is facing an enforced lockdown and looks like this may persist for some more time. Hence it is essential for us to save the liquid money required for our livelihood and sudden needs in the forthcoming months. Financial stability can be attained by planning, prioritizing spending and efficiently using the resources. This pandemic, however, gives us the opportunity to determine our finances in a better way and also clarity on what you need vs what you want. meandmylifestyle may be able to help you to figure it out. Here are a few ways
Sure that all your spending on shopping, movies, tourism, and other luxurious items has come down or almost zero due to present home stay. Hence, no comment on this at the moment. Even the lockdown is lifted or partially relaxed in the next few days, don’t jump on and start spending on the luxurious amenities. Just continue to lead the life in a similar manner until the coronavirus completely vanishes from our lives.
Make use of the moratorium facility offered by the banks on all EMIs and credit card outstanding. Postpone all the EMIs and credit card payments for the next 3 months and save the money in your account for sudden needs.
The next question pops up in our mind is that whether using moratorium is beneficial or it only increases the interest burden if opted?
Many experts suggested in various debates that this moratorium facility only increases the interest burden on borrowers but not beneficial. In fact, this is one of the very good relaxations/reliefs provided by the RBI to increase the liquid money and reduce the burden of monthly payments.
Usually, loans have an average repayment period of 48 to 60 months for personal, auto, etc and 120 to 240 months in case of home loans. It is funny to think of 3 months interest burden when we have borrowed and ready to pay interest for such a longer tenure or repayment period.
It is okay to bear the interest burden of 3 months in these hard times and this can be compensated by putting some extra efforts after everything becomes normal. In fact, the amount which we saved or about to save on shopping, etc will get compensated with the extra interest we are going to incur for the next 3 months.
If we are lucky enough, RBI / Govt may waive off or give partial relief on interest burden for these 3 months, just blind hope.
The whole economy got impacted terribly.If the virus spread doesn’t reduce soon, the economic contraction continues for a longer time and the experts are anticipating that there might be a recession and huge job cuts/layoffs, so gear up.
One needs a frugal mindset, there should be a change in the eating habits to save some resources and thereby saving a tiny amount. Use the daily essentials and resources of lesser cost. People tend to increase their food consumption during home quarantine days, just remember this is a very crucial time and let us not spend resources or money on excessive eating.
Besides cost savings, think of the ways to increase the monthly income by staying at home like doing online jobs. This doesn’t require any investment other than your time.
Many people are homeless and fighting for food. Spend some amount and time to help the poor and needy. Remember it is not a charity that we are doing but more of our contribution and responsibility towards society in difficult times.