Covid-19 has almost halted lives across the country. Earners of numerous families are seeing unprecedented times that led to concerns about the future and fear of restricted income. Instead of chasing business and financial goals, the emphasis has now shifted to maintaining a good health and on survival during the deadly pandemic. Though Covid-19 will continue to have its negative impact on the economy, I am sharing a few smart ways in which people can address growing financial concerns in the time of coronavirus.
Revisit your family budget
Amidst lockdown; take some time to re-evaluate your family budget. Spend less on certain discretionary expenses during the pandemic including clothing, beauty service, lavish meals etc. All of the savings from this should go to emergency fund. One key to saving money is to plan, as much as you possibly can, ahead of time. Make a list of items you routinely need to buy or maintain like groceries, electricity bills, house rent etc. and make a revised budget for next few months.
Create an emergency fund
You need to create an emergency balance fund out of the savings to add up with your last balance. Emergency fund should hold three to six months' worth of living expenses. It is not a good idea to invest or lend money to others if you couldn't secure your emergency fund.
Pay your credit card bills
Although banks will not charge late payment fee and charge simple interest instead of compound interest on credit card bills payable from Mar 15 to May 31, but if possible, it is prudent to pay credit card bills ahead of that time limit. Credit cards usually charge higher interest and if you cannot pay the due now and cumulate it, chances are high that you would miss a payment deadline and count higher charges in future. Evaluate your last few card statements and make a list of payments that you can avoid now.
Buy nonperishable household items once in a month
To avoid frequent human contact and save transportation cost, take the advantage of wholesale price or bundle offer to purchase nonperishable household items once in a month. You should consider stocking a 30-day supply of household items; like- food staples, laundry detergent, diapers, baby foods, prescribed medicine etc. But don't stockpile at home, it hurts everyone.
Reduce financial obligations
If you have an outstanding debt, try to pay off or restructure some of your debts for smaller EMIs and longer period. If you are a good borrower and your financial hardship is real, banks might be more open to help you.
Paying attention to your health has never been more important. Amid the Covid-19 global outbreak, it's likely to be a stressful time for everyone. Beside yours, pay attention to the mental health of your children and other family members. You must take proper care of your health, stay at home, self-isolate or observe proper social distancing rules. Pandemic and financial hardship is temporary, but you must remain there healthy to safeguard your family even after pandemic. Take care!
M A Faisal Mahmud, Chief Investment Officer at LankaBangla Asset Management