How To Save, Invest And Spend Better

Despite the dire stance of many in investing, the government's turmoil caused by-19 may serve as a warning for others to tighten their funds.

The biggest threat to a person's life is the regular loss of income. The pandemic has shown everything from people losing their jobs to the complete closure of businesses. We are suddenly witnessing a shocking new era in which employees are looking for solutions to significant pay cuts, and businesses large to small have become incredibly closed.

On the other hand, housing savings have increased exponentially since the day the country entered the isolation regime. Whether you're a prankster or a money-burning machine, locking doesn't cost everyone more than the basics. The cost per person comes down to rent, salary, EMI and basic necessities. This would be great for those who survive in business or keep their jobs; But it could also mean bleeding for businesses depending on consumer demand. If you think its results will end there, you are very wrong! This will eventually affect our work! This creates a negative cycle as these occupations directly impact their ability to pay salaries and create jobs through expansion.

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While investing, a lot of money has turned its eye to the stock market this year as it has seen a surprisingly V-shaped rocket recovery in the market. On the other hand, the interest rates offered by banks continue to fall. More and more families are putting money in banks to make up for the uncertainty, and families with enough money to explore investment opportunities have taken advantage of the market downturn.

Despite the dire stance of many in investing, the government's turmoil caused by-19 may serve as a warning for others to tighten their funds.

Four strategies to prepare for the next pandemic:

increase in savings rate

I understand that we all want to live a seductive lifestyle, but an epidemic of this magnitude must survive a little more than we are used to. We will eventually recover the additional costs from before the pandemic such as vacations, shopping, parties, but we must remember that there is no guarantee that a disaster of this magnitude will not strike us again. So spend wisely.

Diversity

In this pandemic, confiscation of savings by private banks has caused stock markets to collapse and nothing seems safe for financial institutions, proving that any financial product is risk-free and risk-averse. I saw it myself. Blake reminded us that there are no safe harbors for our money. In fact, every investment carries some risk, and you need to determine what type of risk you are willing to take. The amount you invest in each asset should be determined by the amount of risk you wish to take on, not the current income.

emergency funding

While transitions are not usually possible, they are still possible, so you should have at least three months' worth of money in a contingency fund. The main argument here is what happens if we lose our jobs or our business goes bankrupt? As a result, these emergency funds come in handy when looking for a new job.

Don't be afraid to change too much, just get used to it.

When an investment is too volatile, investors may be tempted to sell it, realizing that the situation could worsen. In March 2020 we saw right that the market initially fell like a pinball and Nifty 50 fell from 12400 to 7700. But today, it has reached an incredible peak of 18,000 in 18 months. Investors can handle such volatility only if they have the necessary risk appetite both financially and emotionally. In fact, every responsible and prudent investor should take advantage of that opportunity to invest, if they can.

In a few years we may forget the government pandemic. You can mention that it is a feeling of relief rather than fear. You may also forget the lessons you learned financially and return to your past behavior. But I hope many of us will change our ways when we remember the faces of the well-known people who spent the nights of the unemployed and homeless because of the disaster. This is how crises work. It leaves a mark that doesn't come off like a wound! Fear the mark here!