The country as a whole, and its citizens, are in a steady process of unlocking, after having spent much time at home. While we are still advised to go out only when needed, we’re trying to restore a sense of normalcy to our lives. Offices or schoolsare not likely to restart very soon yet. There might be some more time we’d be required to stay at home. But the reset button is being slowly pushed, and we are getting back in the groove.
Your financial planning might have witnessed a bit of turmoil with salary cuts or various money matters. But, just like us resetting and unlocking our life, we must also reset our financial plan. Read on to understand how you can get your financial and investment life in place in the long run.
Your children and offsprings are likely to be at home this time. Utilisethis time to teach them about personal finance. Educate them about the importance of investing. This activity will help your family understand the basic principles of investing and budgeting.
Audit And Insure
Now is the best time to carry out an insurance audit. Analyse your health and term cover considering your expenses, income, and financial goals and objectives. Your life cover needs to be at least 10-20 times your income.
Combine And Manage
Open an EIA (e-Insurance account) to review your insurance policies and keep them in one place and manage your insurance policies online.
Review And Sort
Take out time to sit down and review the asset allocation of your investment portfolio. It is especially important when the market is going through so much mayhem right now.
Evaluate And Edit
If your investment is less than 20-30% in equity, you don’t need to fret. Most of your capital is safely parked in different investment avenues. We panic because we think in isolation. Make sure to check your investment options right now, and ensure that you haven’t invested in unwanted or junk products. Usually, investors invest but do not get time to review their portfolio. Now is the time to do that.
Goals And Liabilities
Have you ever arranged a personal balance sheet? Do you have a fair idea about your net worth, assets, and liabilities? Formulate a net worth statement which will deliver a summary of your assets and liabilities and help you apprehend where you stand currently with respect to your current financial condition and goals.
Spending And Saving
Get an overview of your spending, budget, and emergency fund. Revisit your expenses and budget and cut down on unnecessary spendings. Ensure that you have enough emergency funds.
Diversify And Invest
In an uncertain economy with the additional uncertainty of the coronavirus now, there is much fear. Diversification across different types of investments is necessary for this situation too. Open multiple accounts in various banks to ensure sufficient diversification that can protect your capital in case of any bank failure. If you have a considerable amount of money invested in bank fixed deposits, you can consider investing it across at least 2-3 banks.
These are indeed challenging times, but we can get through them! Remember, this too shall pass. Meanwhile, look at the bigger picture and focus on your ultimate goal – financial freedom. Make sure you utilise this time in the most optimum way possible to get there. Happy investing!