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Boost Your Financial Fitness For The Impact Of Covid-19 And Beyond

Living the lean lifestyle won't be forever. For now, it's the fitness mantra you need to protect your precious financial resources. Follow these to reap the benefits of a healthy investment portfolio. These will protect you well and enable you to weather through any crisis with confidence.

Photo Credit : Shutterstock

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It's been 126 days since India went into lockdown. We're at home, locked away from the world, the safest place for us. Yet, there has never been a more eventful time in our memory.

After months of working remotely and social distancing you may be at your wit's end!

At first, we rejoiced at the fact that we get to skip our dreary commutes and work from home.

Finally we would get to spend more time with our families.

But the going hasn't been easy for us at all.

We are physically and mentally exhausted with the never-ending chores at home. And work from home, is actually more work!

To top this, for many it's a tough time financially too. Many lost their jobs due to downsizing, others took pay cuts.

Remarkably though, some are cruising through all of this!

Yes, it's true.

We are talking about those who had at least six months' worth of emergency funds in their kitty. They are navigating through this mayhem much better than most.

Better still, are those who took our founder, Ajit Dayal's recommendation and set 24 months of expenses aside for unforeseen eventualities.

Yes, financial preparedness is something we have always advocated to our investors.

And this was way before the pandemic hit us.

Now it's no longer optional... it's critical!

In other words, it's essential to maintain one's financial fitness.

So what is Financial Fitness?

Much like we maintain our body's fitness, we need to maintain our financial fitness too.

A good fitness mantra is to organize your money, pare expenses where necessary and grow it well.

So now that you're ready, here are our recommendations to get your finances into better shape than ever before!

1. Analyze your Cash flow
Study your bank statements to analyze your cash flows. Consider your income and your expenses over the last few months to figure out areas to "cut the fat" . Cut back on things you do not need while at home. Aim to spend on necessities - safety, medicine, housing, and food.

2. Renegotiate EMIs
Mortgage and rent are often the most expensive budget items. If you are in a position to pay your bills, pay them. EMIs are cheaper at the moment, so renegotiate them with your bank if needed. Ask your landlord if they can lower your rent, given the current situation.

3. Add more streams of income
Sites like Upwork and Freelancer are booming at the moment with jobs for freelancers. Writing a book, tutoring online, drop shipping are all great ideas to earn a second income. Starting a business is also something you can consider.

4. Build an emergency fund
Use money saved during lockdown on daily expenses to build your emergency fund.
In an ideal world, you would have 24 months' worth of living expenses saved up in an emergency fund. Beginners to this concept can start with even one month, and then build it to two months, and keep going from there.

If you already have a healthy emergency fund, consider contributing more to your retirement fund.

Living the lean lifestyle won't be forever. For now, it's the fitness mantra you need to protect your precious financial resources. Follow these to reap the benefits of a healthy investment portfolio. These will protect you well and enable you to weather through any crisis with confidence.

Source: Quantum Mutual Fund


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