How am I managing my personal finances in corona crisis?

Corona crisis is an unprecedented one. We have not seen such kind of crisis for decades. Because of COVID 19, not only our life but the whole society is at risk, Our investments and the global economy, which impacts our investments are also facing the heat. It looks like everyone’s life takes a pause for a while and our mind is filled with confusion and anxiety. When our economy is slowly opening up, yet there are some black clouds around.

Corona pandemic made us to :-

# Look at our finances in a deeper sense.

# Check our habits and approach towards money.

# Be serious about having a concrete structure in the form of the formal financial plan to follow so that we will be ready in the future for such an unexpected crisis.

As far as my own finances are concerned with the grace of God nothing has changed so far. I am getting client flow as it is. I must say in this corona crisis, I could talk to many different types of client’s personalities.

# Some were very much worried about their finances and want a quicker solution

# Some young guys just started their career are taking such event seriously and want to plan things meticulously with the help of an expert

# Mid aged guys who may or may not feel any job threat but want to check whether they are on the right path as far as their finances are concerned and any changes needed in such crisis.

# Senior citizens who are retired now and want to invest their money safely with the help of a reliable expert who will give them the right advice rather than just jumping in equity for quick money.

We should understand that the basics of financial planning are the same before COVID 19 as well after COVID 19 too. I was/am personally following these simple 5 pointers as far as my finances are concerned.

Emergency fund: I always keep aside an adequate emergency fund. I had 6 months of my monthly expenses in my emergency fund, Now I have topped it up to 1 and half years of expenses. In current situation have adequate emergency fund by your side

Insurances: Before starting investing, I made sure I had covered all my possible risks of life which might have drained out my finances. Simple checklist ion insurances:

# I have an adequate Term insurance cover.

# I have a health insurance policy by my side. I have a 5L family floater as my base plan and have a 25L super top-up plan. I am thinking of upgrading my super top-up plan if the corona situation worsens in India.

# I am serving my critical illness policy as well as the accidental benefit standalone policy.

Short term goals: I follow Goal-based Investment theory since long. I have segregated my goals into short term, medium-term, and long term goals. I have 2 short term goals

# first one upgrading my car within a year

# and the second one going on a domestic trip in 2 years.

Because of the corona, the term of the goals is pushed further. For both these goals, I have 100% of investments in debt products only. I have FDs and parked money in liquid funds. So I am not at all worried about these goals due to the recent fall in the share market.

Long term goals: My long term goals include

# my retirement planning and

# buying a weekend home.

As these goals are 15/20+ years, I am investing 60% of the required monthly amount in equity mutual funds. But as I know these goals are really long term goals this volatility in the share market is not bothering me. Rather I am topping up in the Nifty Index fund as and when I get extra money.

Periodic rebalancing: I was following the yearly rebalancing of my investment portfolio since I started investing. It helps me to follow my asset allocation and book yearly profits from the different asset classes and reinvest it again as per the asset allocation. As far as my Direct Equity is concerned I do periodic profit booking. I sell part of the share which shows 30–35% profit.

As I was following these basic principles of Financial Planning Corona virus doesn’t impact my fiances or style of investing much.

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