Lockdowns and mobility restrictions wreaked havoc on businesses, organizations, and a variety of economic activities.
According to FICCI, 80% of businesses have experienced a substantial decline in cash flow as a result of this circumstance. People have also become financially insecure as a result of it.
In these unpredictable times, an effective plan for proper financial management can aid in the smooth functioning of life and relieve a person of many problems.
- Inadequate emergency funds: It’s a good idea to keep enough cash on hand in case of an emergency. It cannot be denied that the pandemic and subsequent lockdowns highlighted the importance of having adequate emergency funds to support the household in the event of a pay cut or business loss. Most importantly, people must have separate finances available to cover medical bills in the event of an emergency.
- Increased debts are a major source of anxiety for people throughout this global pandemic. Those who have lost their jobs find it difficult to repay the loans they have taken out for various household responsibilities. Home loans with high-interest rates, in particular, are increasing the financial pressure on low-income families. Failure to return them on time results in a significant increase in debt.
- Delayed or late payments: Late payments are inconvenient because they typically result in additional fees. As a result, this financial worry must be addressed in order to avoid additional charges. It is critical to developing a simple way to manage financial obligations. People can profit from using the auto-pay method to pay their EMIs. If a person does not have enough money to pay the EMI, he or she might call the bank to clarify the loan’s terms and request a payment extension.
- The importance of cash flow cannot be overstated. Any cash flow problem continues to worry consumers since it disrupts the regular budgeting process. Cash flow problems become a hindrance for those who must meet financial obligations. Cash flow issues may be more severe than ever for businesses incurring losses as a result of Covid-19’s spread and subsequent restrictions.
- Lack of health and life insurance plans: People must choose adequate health and life insurance plans because the Coronavirus has not been completely eradicated. These are critical in preparing people to deal with an unexpected emergency situation during the pandemic.
- Lack of insurance exposes an individual and his or her family to financial hardships and leaves them unable to deal with financial demands that may arise at any time. When faced with a catastrophe, having a life insurance plan can help the entire family. Most medical crises, as well as the costs associated with them, are covered by health insurance. It is especially important to take advantage of health insurance plans that cover Covid-19-related illnesses, as this is a pressing need.