The biggest threat a person can have in life is loss of regular earnings. The pandemic has showed us everything, right from people losing their jobs to total shutdown of businesses. We’re suddenly witnessing a new jolting era where employees are settling for significant pay cuts, while business houses from big conglomerates to small enterprises are facing an unbelievable standstill.
Household savings, on the other hand, have witnessed a huge uptick from the day the country went into the quarantine mode. Whether you’re a miser or a money burning machine, the lockdown has prevented everyone from spending anything beyond the basics. Everyone’s expenses have come down to rent, salaries, EMI and basic necessities. Though this may sound good for people who have managed to survive their business or hold on their jobs; but this would mean blood bath for businesses which rely on consumer demand. If you think the effect of it will end there, then you have highly mistaken! It will eventually come down to our jobs! As this will directly affect the ability of these business to pay salaries and create jobs by expanding, creating a negative spiral.
With respect to investing, a lot of money eyes turned towards the stock market this year as the market saw an astonishing V-shaped rocket recovery; while the interest rates offered by banks kept going down. Households with a surplus have kept their money in the bank to meet uncertainties, while those with enough wealth to explore investment opportunities made sure they took advantage of the market’s decline.
While many individuals have a rigorous attitude to investing, the Covid-19-led disruptions may serve as a wake-up call for others to strengthen their finances.
4 strategies to keep you all set for the next pandemic:
Increase Saving percentage
I understand we all wish to live a flamboyant lifestyle, but a pandemic of this magnitude has forced us to preserve a bit more than we use too. While we eventually will restore all of the additional expenditures we had before the epidemic such as vacations, shopping, parties, and so on, it is essential to remember that there’s no assurance that a catastrophe of this scale will not hit us again. Therefore, spend but wisely.