personal finance

Coronavirus lockdown: Have time on your hands? Complete these 5 money-related tasks


All of India is under a strict 21-day lockdown to stop the spread of the coronavirus. A majority of the country’s workforce is now working from home. Some, unlucky or lucky as the case may be, have some extra time on their hands due to this. Wondering what to do with this free time? Why don’t you spring clean your finances?

What with the world staring at a recession due to COVID-19, now is a good time to sort out your money matters.

Here are five money-related things you can during the lockdown.

Get insured, check current insurance status

Since the reason for this very lockdown is a viral disease, the first thing on your mind should be checking if you have adequate insurance. Buy a health cover for yourself and your family, if you do not already have one. If you do, check the coverage.

Suresh Sadagopan, Founder, Ladder7 Financial Advisories says, “A lot of people depend on the medical cover given by their employer and do not possess a personal cover. At a time like this, not having your own cover is dangerous because jobs and industries themselves are at risk. If tomorrow you fall sick, you do not want to end up in a situation where you neither have any health insurance cover nor a job. This is why we recommend some level of personal insurance for self and the family, say a family floater plan of Rs 5 lakh, this should not be too costly and now with some time on their hands, people can plan this.”

Life insurance is important as well. “Even if people have bought a life cover, then it might not be up to the required sum assured. One should check if their cover, sum assured is good enough for them,” says Sadagopan.

Check your expenses, save up in case things go further south

Across sectors and firms, job losses and/or pay cuts are happening or could happen soon. So, preparing for such a contingency is something everyone should do.

How much money should you have for emergencies? Sadagopan says, “Minimum three months worth of typical expenses, along with your EMIs, should be in your account.”

Reviewing financial documents, rectifying financial plan

Spring clean your financial assets such as bank accounts, demat accounts, mutual fund investments and insurance policies. This will not only ensure good maintenance of finances but also provide a consolidated view of your financial status. Dilshad Billimoria, Director, Dilzer Consultants says, “Gather all your documentation in one place, have everything on paper, along with the necessary passwords and confidentialities, both online and offline. Clean up all old files with unnecessary paperwork, account statements or old insurance policies.”

Also, now is a good time to review your financial strategy: check what worked for you and what hasn’t, and do a comparative analysis. “This is the time to start reflecting on exactly what your real goals in life are, it’s a time for consolidation and understanding of what matters the most for you,” explains Billimoria.

Investing in these times

There is a bloodbath in the equity market. In its worst crash yet, Sensex too tanked over 3,900 points on March 23. Investors in stocks and mutual funds have all burnt their fingers.

However, there are some financial advisers that say that now is a good time to invest in good quality stocks, i.e., value picks. On the other hand, some advocate the opposite — save up and do not think about investing now.

So, what should you do? “If you have taken care of all your necessary expenses, if you have money to spare, then you are in the position to take a long-term view. The markets can go further down from this point, nobody can know the answer to this or what the exact bottom will be. If not at 25K-27K, then when will you invest? If you have the money, the risk appetite and can stomach the volatility for some time to come, you’re on to a very good path,” says Sadagopan.

That was equities, what about debt? There have been cases where investors have been abandoning equity to move to debt investments. Is this a good switch? Relocating money from equities to say, FDs is a grave mistake, so is stopping mutual fund systematic investment plans (SIPs), according to Sadagopan. “The debt space is not safe either. If the current situation continues, defaults will start happening everywhere, corporate FDs, NCDs, and so on. As a result, debt mutual funds will start crashing too.”

So, have a good mix of assets to help your tide through these tough times.

Get your banking, tax-related activities in order

Take out some time to update documents that need updating. Make the most of any free time you get now to sort out those banking activities that you kept putting off. Now since most banks are short staffed and are encouraging the use of digital routes, update your documents using your Net banking account.

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With time on your hands, why not take a closer look at the details of the new tax regime announced in this year’s Budget. See if it makes sense for you to opt for it or stick to the existing regime. If you have not done your tax-saving investments yet, the finance minister has given you time till June 30. Sort that out too. Not linked your PAN with Aadhaar? For that, too, you have time till June 30.





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