The COVID 19 pandemic has taken the world’s economy on a ride. United Nations Chief has warned that the COVID-19 pandemic will cause unimaginable devastation, and lead to a loss of USD 8.5 trillion in global output; the sharpest contraction since the Great Depression; if nations did not respond with unity.
Due to this, people’s financial conditions have already started to deteriorate arising due to loss in jobs, pay cuts, loss in business etc. According to reports by the International Labour Organization (ILO) and the Asian Development Bank (ADB) 4.1 million youths in India have suffered a job loss in the month of July 2020.
As per, Centre for Monitoring India Economy (CMIE) data, salaried jobs were nearly 19 million short of their average in 2019-20. Five million people lost their jobs in July; another 17.7 million jobs were lost in April 2020. Moreover, an additional 0.1 million jobs were lost in May 2020.
With the help of this article, we are highlighting key steps and actions that can be undertaken in order to curb financial losses faced during this crisis.
- Borrow smartly: Whenever we are short of cash, the first option that we look for is borrowing. Which is right, but here one needs to be smart enough to choose the right type of loan for themselves for immediate needs. In addition, these loans take a lot of time to get sanctioned, thus hampering your need for immediate money. Also they are subject to approval based on your payment history and credit score. Your application may or may not be accepted. The most suggested option in such cases is opting for Gold Loans, provided you have the right gold ornament with you. They are easily available and you do not need to specify the purpose of the loan. Gold Loans are suitable for all your short and long term needs. As loan against gold comes with some of the benefits like flexible payment options, quick processing, minimum documentation and the interest rates are also minimum. Simultaneously gold loan offers various schemes as well based on your requirements like:
Which makes it easier for a borrower to choose a scheme based on his/her requirements.
- Make timely payments of your card/EMIs: We all know the importance of making timely payments to our banks, as we do not want to fall prey to bad credit score. Here the customer can choose to reach out to their bank to give them time to repay their card bills. However, even if the bank gives, you time to repay, it will still levy interest charge on customer for late payments. Customer either makes timely payments now and relaxes or chooses to pay extra later. Therefore, to address this difficulty, the government has introduced measures like moratorium with options like increase in the tenor and pay at the end of moratorium or increase in EMI with the same tenor. From which the customer can choose and calculate based on their situation. Experts suggest opting of this relief only if extremely necessary as availing of moratorium burdens the customer in the end.
- Take control of your spending habits: One needs to identify what are their genuine needs and wants. Irrational wants can be put on hold until the necessities are being addressed. There is a difference between needs and wants, similarly one needs to get charge of that. Unnecessary habits like shopping, eating out etc should be altered until the time you have enough liquidity in your hands.
- Pause on SIPs and other investments: This is a tough task for any of us to pause on SIPs and other investments that we may have been doing to fulfil any future plans like retirement, marriage, education, home etc. Apart from this, you can make use of the extra bucks that you are getting with the government reducing PF contribution from your salaries. Therefore, it is advised to save wisely in order to deal with the current scarcity.
- Increase savings: Last, but not the least, setting aside a particular amount every month can help you and your family anytime in the long run during emergencies. Simultaneously, you can save by curbing your mobile bills, groceries, avoiding unnecessary usage of credit cards, part payment of rent, subscriptions etc. Try to cut short on these and limit it to just necessities where you are sure to save some bucks.
Adapting to these simple tips, you will definitely make a little difference in stabilizing your finances and be able to deal with the current situation wisely until we all come to normal terms.