The Centre for Monitoring Indian Economy confirmed the devastating effect of the COVID-19 pandemic on the country. Along with facing a monumental health crisis, the country is reeling under the impact of a massive economic crisis that by the beginning of May had led to 122 million job losses. Against this backdrop, being ‘Atmanirbhar’ or self-reliant became the call of the hour. With the country taking conscious steps towards reassessing and strengthening itself, here are some investment ideas and financial measures you can take to become financially independent too.
- Consider long term investment plans-
Long term investment plans such as ULIPs allow for wealth creation while also functioning as a life insurance investment. These goal-based investments instruments are also one of the popular tax saving investments in India. Depending on your risk capacity, you can opt for debt or equity-related funds. Other tax saving investments in India are PPF, ELSS, etc.
- Invest in term plans to cover dependents-
Term plans offer the financial security to your dependents in case sudden uncertainties. This allows them to manage the monthly payouts such as the home loan EMIs, children’s school fees, etc. so that they can maintain their lifestyles, and their future goals are not affected.
- Focus on how you invest
Be disciplined when it comes to making tax saving investments. If your portfolios have suffered losses, but your goals are over five years or more away, opt to hold on to your investments as it would prevent your notional losses from converting into real ones.
- Reduce your outstanding loans-
If you have surplus available, opt to prepay your outstanding loans or to increase EMIs. In case of multiple loans, it would be wise to work towards reducing the ones with the longest tenure and the priciest EMIs earliest.
- Have an emergency fund ready-
Keep aside sufficient funds to cover four to six months of expenses to serve as a pool to turn to in case of contingencies such as loss of job, delay in receiving salary, sudden and unavoidable expenses, etc.
- Opt for a medical insurance cover-
Illnesses can drain your finances significantly. It is therefore important to buy a medical insurance for yourself and your family that covers most of the common and probable ailments. This allows you to make your finances foolproof so that you are not burdened financially in times of medical emergencies.
- Budget the expenses-
Focus on making only essential expenses. Make a conscious effort to delay your feel-good or luxury expenses. The use of credit cards only offer a false sense of money available at disposal.
- Keep an account of your finances-
Ensure that the financial holdings you own, such as long term investments, bank accounts, insurance policies, etc., have a nominee. Also, all stakeholders should be aware of the nominee details and other records related to the financial and physical assets. It may also be worthwhile to write down your will to avoid unwanted hassles in case of your sudden demise.
- Boost your finances by eliminating the clutter-
Quit indulging in luxuries that drain your time and finances, by fine-tuning your wants. If you are stuck with quite a few items that are laborious to maintain and are a stress on your finances, opt to get rid of them on websites that allow resale. Apart from reducing the clutter, the sale money would also assist you financially in times of pay cuts.
These unprecedented times call for conservancy and better resolve. Practising self-reliance, therefore, becomes the key to navigating through this economic crisis, which has brought the entire world to a halt, while also preparing for a better and safer tomorrow for both you and your loved ones.