4 ways to manage personal finance and survive a crisis


In order to control the spread of the novel COVID-19 pandemic, several measures were adopted such as a nationwide lockdown, social distancing, etc resulting in a situation of either job cuts or salary cuts. Those workers employed in the unorganized sector took the very first chance to return to their native places not only to meet their family members but also to minimize the cost of living by saving on room rent and relatively expensive food items. Not only the workers employed in the unorganized sector, but employees of the organized sector are also facing hardship due to salary cuts and downsizing.

According to a FICCI – Dhruva Advisors Industry Survey, almost 32% of the firms have noted a job loss of more than 10% from their company’s perspective. In the April edition of the same survey, this figure was nearing to 40%. The survey also showed that 34% of the firms participated in the survey have witnessed salary cuts of more than 10%, while employees of 14% of firms have faced salary cuts between 5% to 10% and employees of 4% firms have seen up to 5% salary cut.

During these times of unprecedented hardship, it is imperative that you manage personal finances well. There are several ways to survive a crisis and the following are some of such ways;

Minimize the cost of living

In order to move past through this crisis situation is to eliminate all luxury expenditures and by starting to live on a modest minimum. Nearly all the entertainment industries have halted due to the COVID-19 pandemic, making it almost easy to cut expenditures on luxury, but the need is to concentrate on minimizing the expenditures on necessity. The pandemic has pushed most people to adapt to a work-from-home culture, switched to a digitalized lifestyle.

Consider and evaluate investments, EMIs

In case of facing a salary cut or a job loss due to downsizing, you may also consider stopping your SIPs or other regular investments until your earnings stabilize. And also, one can avail EMI moratorium if earnings have totally stopped all of a sudden. However, remember that interest will continue to accumulate during the moratorium period. Hence, it’s better to continue paying EMIs of high-interest loans.

Efficient utilization of savings

In case of facing a job loss, one may have to liquidate your savings to meet day-to-day expenditures. While doing so, utilize emergency fund first, but partially and then liquidate your short-term liquid funds and try not to disturb the investments made concerning long-term goals. As the gold prices are currently high, you may also consider liquidating your stakes in gold, rather than redeeming equities, which are not performing well. A facility to partially withdraw your Provident Fund (PF) money or make a partial withdrawal from your PPF, NPS account, but only in extreme situations are also provided.

Considering a loan

In the case of exhausting most of the other options, one may have to take loans for survival. In such a circumstance, refrain from taking high-interest personal loans or credit card loans, but try to take cheaper loans such as loans against an insurance policy or other securities like mutual funds (MF) or even gold loans.


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