During uncertain times, it is vital to get proper financial advice. Due to the pandemic, there has been temporary closure of businesses, schools and other public facilities and events. While these actions are necessary steps to help reduce exposures, it may bring financial uncertainty for many people.
As you plan for the potential impact of the coronavirus, there are some steps that you can take to help protect yourself financially, both in the short and long run. Don’t simply ignore your finances altogether and hope it all works out.
Also, remember this global pandemic is temporary. Stay calm and look to the future.
1. Don’t Panic
These are uncertain times, but don’t let the fear of the unknown drive you into panic mode. Even though financial uncertainty is a symptom of this pandemic, you shouldn’t let it dictate your investment choices (to buy/sell) and your spending (over stocking home goods). Panic rarely works out well when fused into your financial decisions.
Everyone’s finances and investments might go through a period of volatility. The solution is not fear or panic. The best thing you can do is stick to a financial plan and not make rash decisions based on fear. Before you make any big-money moves, be sure to step back and make sure you’re not making them in panic mode. It’s more crucial now than ever not to let fear take over.
2. Embrace Minimalism
Being smart about spending and budgeting can help avoid the need to take on debt during this time. To make the most of the situation, you’ll need to adjust your budget accordingly. Develop a budget that details your current reserve and possible expenses that are necessities. Now is the time to figure out just how much you have available.
By reducing expenses where we can, we can make sure that funds available stretch, as we don’t know how long or how deep the crisis around the pandemic will last. It’s important you know exactly what you have available and where you have your available funds in case the need does arise. Make prudent use of your current resources and try not to take on new debt.
3. Think Liquidity
Markets are going down now and may continue for some time, but this can create an opportunity for investors who are focused on the long term. If you’re considering investing, opt for less volatile funds. This strategy helps in mitigating risk arising out of interest rate volatility and provides high liquidity to your portfolio.
Liquid funds are categorized as low-risk products from liquidity and interest rate risk perspective because they hold very short term instruments where the chances of interest rate fluctuations are less. Volatility in such funds is low. Flexibility and accessibility are two ways liquid assets can help you stay ahead. Hold on to your cash or invest in liquid assets.