How to plan earnings, savings and expenditures in this pandemic
Growing investments and achieveing goals is not a faraway dream. It is in the darkest moments that we find the light at the end of the tunnel.
India witnessed a devastating second wave of the COVID-19 pandemic and saw its healthcare infrastructure crumble. The disruption costed lives and livelihoods.
In these times, multiple situations have emerged wherein the bread winner of the family has succumbed to this dreaded pandemic leaving behind a distraught family. Laying a heavy burden on the woman to take charge of all the finances.
Every rise in a statistic is a painful reminder to every mourning wife, mother or daughter, thrown into a disarray of responsibilities she once had someone to bank on for. It is not an easy fight to wager, but in scenarios when the system continues to fall short in aid, every tool available can help to keep on fighting. To make the most of these tools, a few steps can help to get started.
In the midst of grief, pain & loneliness, standing up and taking charge can be difficult and feeling clueless is okay. Among a hundred things to do, multiple decisions to make that you have never made before, all considerations will end up being aimed with one goal in mind - security. Armouring yourself with the right facts in place will secure heading in the right direction.
Gaining financial strength could in a different context be contested as a privilege, but in this scenario, emerges as a necessity. Being aware of your and your family’s finances is the first step on the journey. Understanding Employee Benefits is a good place to begin with. You can explore multiple policies and schemes with your employer.
Employee Deposit Linked Insurance (EDLI)
The Employee Provident Fund Organisation provides financial assistance to the family members in case of the death of the employee.
Employees’ State Insurance Scheme
Employees’ State Insurance Corporation (ESIC) provides an integrated social security scheme that aims to provide financial protection to workers in case of sickness, maternity, death, or disablement due to an employment injury or occupational hazard.
Group Insurance
In most cases, a lot of companies offer group term life insurance policies to their employees wherein financial assistance is provided to dependents of the employee, however the risk cover might differ from company to company. In case of death, the nominee can claim the insurance amount from the company.
In any of the options above, evaluating tax implications is important before taking the decision. Financial Security is derived from taking that first step towards prioritizing financial actions.
It might seem like a herculean task initially, but once you begin to seek to understand different claims, the paperwork, consolidations and debit or credit discovery the road to financial security is a straightway path.
The next progressive step to be taken is in the direction of maximising earnings. While the burden of being the sole earner in the family is daunting, it is important to get a clear picture of assets, liabilities, insurance policies that you can claim. A task as tedious might leave anyone flustered, but with a simple checklist, you can insure that everything is covered.
Gather all the financial documents in the house and find any bank accounts that need to be transferred to your name.
Check spouse’s email and mobile phone (if you have access) to gather details about bank accounts
Get consolidated mutual fund statement from your spouse’s broker/camsonline.com
Look for emails from NSDL or CDSL in spouse’s inbox to know details of mutual fund and demat account holdings
Apply for a free credit report from CIBIL to learn about loans and credit card dues
Check income-tax portal (if you have the password) to learn about tax dues or refunds
Check with insurance agent for policy details; if there's none, check spouse’s email
Your earnings are only ever as good to you as your spending. Optimising spending begins with a simple step of paying off any dues. Any sign of pending bills will remain to be looming danger over your head. Pay them off at the earliest.
Most scenarios see liabilities like home and car loans emerge as an imperative cause of trouble. Clear them off at the earliest. It is always advisable to first pay off your dues and then begin spending money on other necessities to discipline your savings the right way.
At this point, you begin to wonder how long it might really take for you to get back on your feet. All savings might seem to disappear, but this is where your financial security comes into action.
Allocation of insurance money is the most strategic and impactful tool in managing your dues. The best thing you can do with insurance proceeds is to pay off the liabilities. Continuing EMIs can emerge as a grave danger in the future if not paid in time, especially in the cases where the option of a flowing income no longer exists.
While the above measures might be true in some cases, in others a source of income might be lost completely. All hope is never lost, in the war that you have begun to raise in this battlefield, every step in the right direction is an armour to shield you from adversity.
If you are not earning, a part of the insurance money should be parked in fixed income instruments that can generate regular income. If some money is still left, allocate it for future needs such as child's education and marriage.
Explore different assets like Mutual Funds, EPFs, PPFs, etc to develop insurance payout.
Growing investments and achieveing goals is not a faraway dream. It is in the darkest moments that we find the light at the end of the tunnel. While the battle is not an easy one, it certainly isn’t lost till there are reasons left to fight for. The unknown can be intimidating, but with the right tools at your aid, the most endearing battles can also be won.
Happy Investing
Source: Moneycontrol.com
