Hi there

Times are difficult, as the economy is getting back on its feet and everything is slowly opening up again. Payments have been delayed/cut and jobs have been lost amongst the various uncertainties that plague our everyday. Amidst this, it is very important to keep our heads straight and use this time and your money effectively. 

Here are a few things that you can do right now to make the most of your money in case you have had a pay cut/job loss recently:

1) Keep a track of all your spendings

It is extremely important to prioritize your expenses and use whatever money you have effectively. Make a list of all your expenses - divide them into essential and non-essential expenses (and avoid this completely for a while). This way, you can reduce expenses which are not important at the moment.

We know shopping is relaxing and helps you feel good but do not use 'delivery start ho gaya' as an excuse to go overboard with online shopping. If you don't need something in the next few months as you are still working from home,- DO NOT SHOP! SAVE that amount instead! Use this time to evaluate all your unnecessary spendings and list them down and control it. 

2) Use your Emergency Fund

This is what your Emergency Fund was built for. If you have been following us, you must be having at least  3 months' worth of your expenses on hand. DO use it to cover your essentials like groceries and rent. DO NOT use it to splurge on that big sale. Make sure you are spending your Emergency Fund sensibly. Cutting back on spending will help you stretch your savings for longer.

If you can take support from your parents/spouse/family - there is no harm in asking them for help. These are tough times and asking for help is not a bad thing. 

3) Hide your Credit Cards

Hide this card, give it to your mother if you must, to keep it away; but do not use it. Credit cards may look very lucrative right now and even make you buy some things which you 'feel' like buying. Stay away from them. It will be a financial disaster, given the uncertainty around your future income and the interest rates that get charged on deferred credit card payments. Completely avoid using them.

4) Stop/Pause your Investments

If there is a reduction in income/ or no income now - it is advisable to stop/pause your SIPs until you have a regular flow of income to match up to them. If you have a credit card payment pending, use your savings to pay that off. But remember, the idea, for now, is to free up your cash flows, instead of spending or investing it away. 

Also, evaluate your investments to check what you can do if things get worse (its good to be hopeful but better to be planned) and know all the avenues you can revert to if things go bad.

Ensure you have your health insurance & life insurance in place. If a health emergency strikes now, it can really eat into your savings, so it is better to be prepared.

As a last resort - if you have been contributing to EPF (Employee provident fund), you have the option of taking money out from the same, worth 3 months of your contribution to EPF. Do remember it will take some time to get this money credited to your account and we would recommend not touching it unless it is extremely important.