Saving and investing funds during uncertain times
Jul 27,2021 Savings, Peer to Peer Lending, Investment
The COVID-19 crisis has caused enormous disruptions in our lives, not just to our jobs but to our wellbeing as well. Businesses have been forced to temporarily shut down to support efforts in limiting the pandemic, with some even ceasing operations due to the enormous losses incurred during the lockdown period.
For individuals living on monthly salaries, the sudden loss of income brings heavy financial strain. It is important to evaluate your expenses and see where you can compromise to save some money or to at least keep your finances in order in the midst of this pandemic.
Take stock of what is necessary!
If your household is one where you and/or your partner has an uncertain outlook on the stability of your income, you need to evaluate areas where you can cut down briefly.
In some situations, you may already be spending less because you are not driving considerably, you are not making unplanned trips to departmental stores, or you are just being more careful in general of how you spend every penny. Even if that is the case, you still need to find time with the family members of yours to assess what is truly important and focus only on those things for the foreseeable future.
That way if your family income goes down, you are better prepared to absorb the jolt. If tomorrow you end up being wrong and everyone in your family continues to work, then you are going to feel like you have a good fortune because you have planned for the worst and will be still far away from it.
Build (or replenish) your contingency fund!
For years, financial experts have said, "You should have contingency fund," only to have folks stare at them and say, "Why?" Our present situation is why.
Contingency / emergency funds are intended to help you in times of uncertainty and helps you to mitigate financial hurdles when you are not earning the income you are used to. At any given time, you should know exactly how much you have in your contingency fund and whether it is enough for your family. (Thumb rule: If it is not at least six months of fixed expenses, it is not enough).
If your present situation is stable, then you must be building up your contingency fund to that six-month threshold. If you are having salary cuts / unstable income and you are unable to accumulate enough to get to six months, try getting to Rs. 100,000 as fast as you can. In some instances, this may mean you can't clear of some of your obligations as fast as you would like, but there has never been a situation in last 100 years that better proves the "why you need contingency fund" more than this one right now.
Be A Regular, Savvy Investor!
"Should I stop investing or sell my investments now?"
For most investors who are still actively earning and have decent contingency funds, not much should change. Unpredictability in the market makes us want to do something, adjust something. The best thing you can do during pandemic time is to stay steady.
Evaluate your investment goals and understand your risk appetite. You may want to re-calibrate your portfolio if your proportion of stocks or mutual funds is not working properly. You can keep making the same consistent investments in different asset classes such as P2P Lending.
P2P Lending is an opportunity, where you do not need any financial institution as an intermediary. It connects smart investors looking for better returns with creditworthy borrowers looking for short term personal and business loans. P2P lending is for sophisticated investors. The money invested in various loans listed on P2P platform gets diversified among large number of borrowers from varied risk buckets, location, gender, and age-group etc.
To start lending money on OMLp2p platform, you only have to create an account on our platform and complete the required online documentation/verification process.