The novel coronavirus is keeping the world on its toes. Unemployment went up by 24% as of May 17, 2020, while households experienced a 46% fall in income globally, according to figures released by Statista. Fortunately, the money habits of millennials are more practical than those of their previous generations.
With the onset of a new normal due to the pandemic, spending and investment trends are fast changing. Younger people are concerned about their budget, emergency funds, and treatment costs. Take a look at a few planning tips that can help you make the most of your money during the COVID-19 crisis.
Consider ULIPs
In a unit linked insurance plan, the policyholder needs to pay monthly or yearly premium. The returns are market-linked, with adequate financial protection. The best ULIP plans offer 8 investment fund options. You can also benefit from tax exemptions under Section 80(C) and 10(D) of the Income Tax Act, 1961. Choose from different payment options, such as single pay, 5 pay, 10 pay or regular pay. This is an attractive investment option that can help secure your finances even during a pandemic.
Get a Personal Loan
If you are facing a major cash crunch, think of buying a personal loan. Paperless digital transactions make the process seamless, and you can get any amount between ₹1 lakh and ₹40 lakhs. The repayment tenure is flexible too, from 12 months to 84 months, pick whatever suits you. The funds can help you cater to emergencies and unexpected medical costs if any.
Budgeting and Saving
By cutting down on unnecessary expenses, you can set some money aside every month. Have a clear idea of cash inflow and outflow. This way, it becomes easy to allocate funds to the “needs” and “discretionary spending” categories. Wait for end-of-season sales, discount coupons, and flash sales. Try to stick to one streaming subscription and cut down on ordering food from restaurants. If you are an outstation student, consider moving back home. This will save on rent and electricity until you decide to shift back again.
Emergency Fund
Re-think your financial priorities and save for an emergency fund. However, you do not need to sacrifice a major portion of your lifestyle for this. Little spending cuts here and there can build a healthy financial cushion. Pool a certain percentage of the income towards the emergency fund every month. This will help you deal with unforeseen expenses, without creating a dent in your budget or savings.
Take Up a Side Hustle
Millennials have been hit especially hard with furloughs and job losses. If you are one of them, try to pick a second source of income. This is a wonderful opportunity to earn a few extra bucks while improving your résumé. Make sure the second job is a virtual one, to stay safe from the virus. Look for freelance jobs you can do online. You can also learn new skills to enhance your career prospects.
There is an array of financial goals to consider during the pandemic. Review your lifestyle choices and keep yourself well-equipped for the rainy days ahead. Don’t forget to get out the best ULIP plans to meet your long-term financial goals too.
