How to take care of your financial goals amid Coronavirus setback

Published: March 27, 2020 1:38 PM

The coronavirus will go away in a few weeks or months, but its financial impact may remain for a longer period. So, it's time to practice strict financial discipline and ensure your health protection.

How to take care of your financial goals, Coronavirus setback, regular investment, tax-saving goals, budget, debt, Covid-19, loanKeep your emergency fund topped up with more inflow. If the Covid-19 problem continues longer, then you may have to use your emergency fund.

If you think coronavirus may impact your short and long-term financial goals, then you are right! However, you may avoid its impact or reduce it to a great extent if you take care of your financial goals. Let’s find out what all you can do to prevent the implications of coronavirus on your financial goals.

Don’t stop regular investment

Investment is an ongoing process that helps you to achieve your goal. You should ensure continuity of investments despite grave economic concerns. The best to invest in the present market is through the SIP mode. No one can predict how the stock market will move in the coming days because coronavirus is spreading continuously. Amid volatility and chances of further downside, if you continue to invest through the SIP mode, then you can get the benefit of Rupee-cost-averaging. You can buy mutual fund units at an attractive rate. While investing, it’s also important to adequately diversify your portfolio to reduce the extreme risk prevalent in the current market.

Accomplish tax-saving goals

As the last date of FY 2019-20 is getting closer, it’s highly important to accomplish your tax-saving goals. A delay may cost you higher tax liability. You can’t save taxes for the current financial year once it’s over. So, it’s better to check how much more investment you need to make, to avoid missing the tax-saving goal.

Review your financial budget

Amid the spread of coronavirus, most of the employers are asking their employees to work from home. There is a fear of a large number of job losses happening all over the country in the coming months because of the slowdown. You may also feel the heat of the economic downturn. So, the best way to tackle the financial problem is to take a step in advance. Review your financial budget, segregate your expenses in terms of their priority, and spend on things that are higher on the priority list. For example, avoid expenses on avoidable things, whereas it’s important not to miss out on EMIs, credit card bills, tax payments, etc.

Keep emergency fund ready

Keep your emergency fund topped up with more inflow. If the Covid-19 problem continues longer, then you may have to use your emergency fund. Several cities in the world are under complete locked-down. You may also face a similar situation, and in that case, an emergency fund will come handy. Having an adequate emergency fund will ensure that you don’t have to break your investments towards your financial goals.

Handle your debts carefully

Debt mismanagement can result in a negative impact on your credit score. The credit bureau only checks whether you have defaulted in a loan repayment or not, it doesn’t consider the market situation or corona impact. So, if you have taken a loan, then ensure timely repayment of EMIs. If you think that you’ll find difficulty in repayment, then request your bank to extend the tenure of your loan to reduce the EMI size. At this point of time, it’s better to avoid new loans, especially for buying vehicles, marriage, etc., which can be delayed to a future date.

Stay safely from Covid-19

You should take all precautions to prevent the Covid-19 disease. The pandemic may not take your life, but it can severely devastate you financially, and you may take several weeks to recover. Take measures like washing your hand, avoiding travel in public transport, social distancing, etc.

The coronavirus will go away in a few weeks or months, but its financial impact may remain for a longer period, so it’s time to practice strict financial discipline and ensure your health protection.

(By Amit Jain, Director-Wealth Management, JRK Group)

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