The world is going through a stressful phase due to pandemic. Most of us are stuck at home doing the same chores every day for the last year or so. Staying at home has its own advantages, it gives us an opportunity to look into aspects of our lives which were often ignored in the past i.e. our physical, mental and financial health or financial wellness. Financial wellness is a state where you are financially fit, what does that mean? it means that your finances are at optimal levels and are being used in the most productive way.
As you follow the prescription provided by your physician to stay physically and mentally healthy, to be financially fit, you have to follow some precautions as specified by your financial doctor, specifically in the prevailing situation where you have to be better prepared than before against events that may impact your financial wellness.
What precautions should I take to be financially fit?
Wash your hands – Keep your Income & Cash Flows Clean
Wash your hands off regularly from unnecessary expenses and non-productive investments. It is time to keep your cash flows clean and investments healthy. It is quite common for any individual to make impulsive buying. You may also have made some unnecessary expenses shopping online or may have invested in an inappropriate instrument just because you saw a repetitive promotion on every website you visited or channel we watched. It is ideal to cut the clutter and have a compact cash flow statement to enhance your savings.
Keep distance – From Unsolicited recommendations
People seldom have a habit of advising others.The advice they give might work for some but at the same time may not be the right one for you. Depending on the criticality doctors prescribe different medicines similarly your financial planner provides investment advice based on your requirements. Hence stay away from unsolicited advice from people asking you to make investments you don’t need, but you eventually made under peer pressure. Since last year, a lot of individuals have started looking for a real estate investment or gold just because the cost has come down. Distance yourself from this kind of advice.
Wear a mask to protect yourself – Prepare for the worst
Ensure you are adequately covered which protects you against uncertain events. Make sure you have your Life & health insurance renewed at the time and also make an effort to read the terms and conditions. Ask your insurer if they cover covid treatment. If not then take a covid insurance cover. Check if your life insurance is sufficient. If not, go for additional term insurance cover. You may not be driving off late but your vehicle insurance would also be expiring, so make sure you have these risk measures taken care of. Also, prepare a contingency fund equal to 6 months of your expenses. These measures act as a protection against financial challenges. Another important step you should take is to write your WILL which will enable ease of transfer of asset in case of an unfortunate event.
Stay indoors and step out only if necessary – Stay in the market
Events like these cause panic in the market and hence a lot of investors sell their holdings and prefer keeping cash with them with an aim to reinvest at a better price. Timing the market has on many occasions proved difficult in volatile market conditions. Similar things happened last year too, but it was those who held their investments, gained well when the market recovered and touched an all-time high. So, if you have long-term goals or the intention of your investments is to create wealth, stay invested and do not panic. In case you are a SIP investor then continue the investments, the volatile markets help in cost averaging the investment.
Get vaccinated under the supervision of an expert – Get an expert
Last but not the least, get yourself vaccinated against bad financial decisions. Consult your financial doctor before taking important financial decisions. These decisions would affect your long term financial life hence discuss in detail and be clear of what you want. Be an informed investor and take the best possible approach to attain a healthy financial life.
