Build Your Financial Health With 3 Pillars During Uncertain Times

COVID-19 pandemic brought uncertain times for many people, not just in terms of health but also finances. The loss of jobs and incomes has left many staring at the abyss of financial uncertainty. This calls for a plan that can help you come out of this predicament and build strong financial health.Let’s look at 3 pillars of robust financial health and how building these can help you sail through these difficult times.

• Prepare a budget for your essential and non-essential needs every month.
• Open another savings account that you only use for your monthly spends and refuel it every month from your principal account.
• Cut down on expenses like a trip or buying a gadget you can do without.

• Build an emergency fund and put every penny you save in this fund until it’s big enough to support you for 6 months if your income stops.
• Save at least 20% of what you earn every month that can help you in uncertain times.

• Cut Down on Your Spending: The first step is to cut down on your spends. Some tips;
• Increase Your Savings: While cutting down your expenses is important, it is equally important to save. To do this;

• Buy a Health Insurance: If there is one lesson that COVID-19 has taught us, a medical emergency can knock on our doors anytime. With a massive rise in medical costs, buying a health insurance policy has become an absolute must.
• Buy a Life Insurance: Life Insurance policy helps policyholders ensure their family is financially cared for in their absence.

Uncertain times may tempt you to tackle it with a credit card. However, this can often land you in a debt trap. Watch for the credit card bills and make sure it doesn't go beyond what you can truly afford no matter what your credit limit is. In extreme situations, personal loans with lower interest rates can be a better option.In fact, loans can be a useful tool when used wisely and taken responsibly. If you are taking a personal loan for uncertainty , make sure you have a clear plan of repaying the debt in time.Financial uncertainty calls for re-calibration. Check how you are fairing in these 3 areas and make necessary corrections to ensure you build a strong financial foundation. Consult a financial advisor that can help you build an actionable plan towards a more secure financial future.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.