The COVID-19 pandemic has brought unprecedented challenges to the world, and with it, a deluge of information about how to stay safe. While things in India have come to normal, there are still multiple questions to be answered.
In these uncertain times, it is crucial to not only focus on physical immunity, but also on building financial resilience to protect your financial security. Ensuring your financial well-being can help you weather difficult times with greater ease.
Below are some ways you can use to build your financial immunity in this new Post COVID-19 world.
- Review Your Current Budget - To better navigate these difficult times, consider revaluating your needs and wants and creating a budget that meets your necessary expenses. You may want to cut back on expenses such as dining out and travel, and instead save more for potential medical emergencies like COVID-19. The goal is to be mindful of your spending and save for unexpected events.
- Create an Emergency Corpus - An effective way to build financial immunity is to create an emergency corpusfor rainy days. Now, even more than before, it is critical to create an emergency fund. Ideally, you should have at least three months of your daily expenses as a reserve for tough times.
You can keep aside your emergency savings in an easily accessible medium such as ULIP investments. Apart from the initial lock-in period of five years, ULIP allows you to withdraw money in the time of need. This can come in handy during tough times. You can also alternatively invest in a Guaranteed Income plan that offers a guaranteed return on your investment and create a type of secondary income. With the option of Systematic Withdrawal Plan, you may take out your money when you want.
- Invest Wisely: It is not wise to rely on a single income source. This has become even more evident during the current pandemic situation. You need additional help to stay financially immune. For this purpose, you need to create a financial plan that has a variety of safe investments. You can trust guaranteed income investments to be your safe bet at all times. You choose your saving goals and financial appetite to decide how long you want the regular income. A guaranteed income plan also allows you to decide the payment option that suit you the best.
- Opt for a Comprehensive Insurance Policy: Uncertain times like the COVID-19 pandemic stress the need for a comprehensive insurance cover. An insurance policy safeguards your family in case of your absence. Hence, if you do not have health insurance or a life insurance plan, buying one is another prudent decision you must take immediately.
There are different types of insurance plans you can choose from. If you want a pure insurance plan, consider investing in a term policy. If you want to safeguard you and your family to have a guaranteed income and life cover for life, then it makes sense to invest in a guaranteed income plan especially for those who have dependents in their family. It helps in providing a safety net for your family even in your absence. However, if you prefer insurance along with market-based returns, you can opt for the best ULIP in India. ULIP plans give you a comprehensive insurance cover along with investment in funds as per your risk tolerance.
Moreover, buying insurance is not only beneficial from a security point of view, but it is also advantageous from a tax perspective. The premiums you pay for your ULIP policy or a guaranteed income plan, or term insurance plan are exempt from tax under Section 80C. Further, the death benefit and the maturity proceed also enjoy different tax benefit under Section 10(10D), subject to some conditions. A good insurance plan can reduce the monetary pressure during stressful times like the COVID-19 pandemic or recession.
The last year and the present times have been testing for everyone around the world. With the new normal seeping in, anxiety levels have been redefined. However, one thing you should remind yourself of is that there are a few things you still have under your control. You can be a responsible citizen and take good care of yourself while following all COVID safety protocols. Further, being cautious of your finances, understanding money management, and choosing the right financial tools for investment in these unprecedented times is even more crucial to tide through the pandemic. Along with physical immunity, you must build financial immunity too.
It is time you start focusing on boosting your financial immunity and taking the right steps to financially safeguard the future of your loved ones. With the above tips, you can easily create a failproof financial plan to help you navigate grave times like the COVID pandemic. Once you are financially secure, you will be stress-relieved and much-adequately prepared to tackle difficult times.
Chirag Iyer BFSI Enthusiast
Chirag is a writer and an avid reader who loves to drink coffee! His other interests include boxing, karate, and singing.