These are testing times, and most of us are facing extreme hardships in different aspects of our life, such as health. Many health experts and government authorities have issued guidelines to control the spread of the virus. In this issue of Openance, we will see how these tips can also help us build the health and immunity of your finances.
Wear a Mask – Get adequate insurance cover
There is a proverb that says that precaution is better than cure. In the current scenario, it is essential to stay protected. Wearing a mask can help us and others to distance ourselves from the disease.
Similarly, having adequate life insurance and health insurance cover can protect our finances and investments. If you have adequate insurance covers, it may not be necessary to dip into your savings and investments under challenging situations.
If you take life insurance, your nominee will receive the sum assured after your death. This would help them to achieve their financial goals after your demise. Health insurance compensates for the hospitalisation charges and other prehospitalisation and post-hospitalisation charges.
Sanitise Regularly – Carry out portfolio evaluation
In addition to wearing a mask, regular sanitisation of your house and various items is also essential. For example, it is necessary to wash our hands or take a bath after coming home from the office or any other place.
Similarly, you need to be careful about your investments. You may also evaluate the role of our investments, such as mutual funds, in helping us to achieve our financial goals. We can exit investments that no longer work for us.
Stay at home – Buy a house
Another way to keep yourself safe is to stay at home. The present scenario has made individuals realise the importance of having a house to call their own.
Thanks to the low interest rate, most banks and housing finance companies are offering home loans at very affordable rates. So, it is now the right time to buy a house if you have been planning to buy a house.
Social distancing – Curb impulsive shopping
It may not always be possible to stay at home. We have to visit offices or buy grocery items from the nearest shop. Besides wearing a mask, it is crucial to maintain distance from other people.
Distancing yourself from impulsive shopping can help your finances. Online shopping and cashless payment options have made it easier for individuals to buy things on an impulse without paying any attention.
There are several ways to curb mindless shopping. One can remove their card details or log out from the shopping websites. Also, you can keep items in your cart and revisit them later after a few days. Finally, you may order the items if you still want to buy them after a few days.
Healthy Diet – Portfolio diversification
A healthy diet that is a mix of different nutrients is vital for our health. Each nutrient, such as the various vitamins and minerals, plays different roles in keeping our body healthy and fight diseases.
Similarly, we also need a mix of assets to keep our finances healthy. Assets such as equities and debt have a negative correlation, i.e., the performance of the assets will vary from each other at different periods.
For example, when the equity markets are underperforming, assets such as debt and gold balance equities’ poor performance. Hence, diversification of investments may help to reduce the portfolio risks and give optimised returns.
Get vaccinated through an authorised channel – Get in touch with a financial planner
In this current scenario, we are bombarded with information and tips on social media. And it may not be easy to segregate false news from genuine news. We have seen many incidents where malicious individuals cheated people on the pretext of offering vaccines. Hence, one should rely on authorised channels for vaccination and other COVID-19 related news.
In the same way, relying on investment tips on social media or news may not help you in the long run. Instead, it is essential to rely on a certified financial planner who will take care of your finances and provide personalised advice. Moreover, unlike tips readily available everywhere, a financial planner will consider your risk tolerance and investment goals before suggesting any course of action.
COVID-19 has led to drastic changes in our life. It has taken a toll on our health and finances. In this piece, we have tried to show the relation between staying safe from the virus and our finances. Insurance cover, portfolio evaluation, buying a home, distancing from impulsive shopping, portfolio diversification and relying on financial planners are some of the ways to get better with our finances and stay financially protected.