The past year has been one of not only worries about the epidemic, but also days of going through a severe financial crisis. Still, Covid-19’s fear has not left us. While many businesses are on the upswing, many will still take time to recover. Many are at a point where they cannot even say for sure how long it will take. 2020 is a year where not only enterprises but also individuals have learned the lessons of financial discipline.
Looking back on the bad years, there are many lessons to be learned. Even those who are lagging behind in financial planning are entering the new year with some lessons to be learned from 2020.
Let us look at five important things that the past 12 months, especially the days after February 2020, have taught us.
- Own Emergency Fund The impact on the financial situation is great when a catastrophic or catastrophic event or loss of life occurs. It was a year when everyone recognized that the Emergency Fund should be set aside specifically to deal with serious health problems as well as disasters. Such funds should be allocated for disaster relief, treatment and cost of living. Even those without a monthly income began to raise emergency funds from their reserves.
- Investment plans Having investment plans like SIP is a lesson learned today. Instead of investing all your money in a single deposit, divide it into equities, mutual funds, or gold bonds. Similarly, compare and invest small small cap funds, sectors and companies in the stock market. For example, some funds, including pharma funds, have shown good growth during the epidemic. Things like this should be kept in mind while preparing for investment.
- Gold investment Gold is the way to find an emergency fund in times of danger. Moreover, despite the crisis, gold has performed well this year. (It may not always be so). Gold should not be seen as just an ornament but its investment potential should also be considered. Instead of jewelry, you can buy gold nuggets and bonds. Gold prices are at an all-time high, but not all investments are in gold. Up to 15-25 per cent of the total investment can be invested in gold with expert opinion.
- Health Insurance and Term Insurance The Covid era was marked by the realization that unexpected medical expenses and death could happen to anyone at any time. Although Kovid treatment is free in government hospitals in places including Kerala, there is a situation where lakhs are required for access to specialist treatment or other related health problems in private hospitals. With this in mind, do not hesitate to take out effective health insurance policies to ensure the protection of family members. Term insurance can be taken in view of the security of the borrower and the financial liability that may arise in the absence of individuals.
- Digital awareness In this age where everything is digital, it’s time to learn to get acquainted with digital technology. An example of this is the increase in UPI transactions during the lockdown. Take possession of digital banking. Learn the basics of life with current technologies. Moreover, 2020 has shown just how great the impact on life can be, such as job insecurity, pay cuts and salary delays. Therefore, 2020 has taught us that it is essential to find a second source of income and to practice the work that can be done online. It was also a year of learning that adding things like work from home can reduce the cost of ventures.