The year 2020 has given us a crash course on the need to be more prepared for unprecedented times. The coronavirus outbreak, which resulted in lockdowns across the country, has added to the financial woes of many investors.

Amid the pandemic situation that has impacted the flow of economic activities, many investors will now be mindful of their finances for 2021. 

Vaagisha, a Global Security Manager at LinkedIn, said, “The bulk of my investments are in shares and my portfolio is in the red since the lockdown was announced. For the new year, I am going to invest in different insurance schemes as it provides a cushion during unprecedented times”, Vaagisha said.

Pratima Rawal, a former equity analyst at Allegro Capital Advisors, said the year 2021 could see numerous investors redesigning their budget and financial planning, especially after the major economic recession that ensued post Covid-19. 

“I suggest people should invest more in insurance schemes as it is safe and provides good returns in the long run. There are various insurance schemes such as term insurance, child and healthcare insurance, and retirement insurance. Investors should look forward to investing in these investments’ schemes in 2021,” she put forth.

Here are 7 learnings to help people save more, enjoy more, and yield more starting in 2021.

Buy term insurance plan:The top financial resolution for 2021 should be to buy a sound term insurance plan. This is especially important for all those who have not purchased any life insurance plans to date. In these uncertain times, when so many people are losing their lives to the ongoing pandemic, it is important to invest in a term insurance policy for your loved ones. A term insurance plan will help you to protect the financial needs of your family when you are not with them.

HDFC Life Click to Protect Life is a great term plan that provides benefits in accordance with the changes in your lifestyle and life stages so that you and your loved ones have comprehensive financial protection at all times. You have the option to choose a cover which fits your needs from three plan options. Unlike regular plans, the Click to Protect Life gives you the benefit of auto balancing death and critical illness with age and you can also opt various add-on benefits like return of premium option, accidental death benefit option and many more.

Revise your budget for travel and leisure: People should be mindful of their budget when planning a travel or any form of leisure shopping in the wake of a coronavirus outbreak. Cutting down your budget on travel and long holidays enables you to save more money, especially at a time when things have become unpredictable and the job market is not great. You can instead plan a short trip or a weekend getaway to get over stress. Similarly, you can wait a bit before you splurge on the next gadget or a designer dress. 

Create an emergency fund:Investing a portion of your salary in an emergency fund (contingency fund) regularly helps you to fill the gap that arises during financial emergencies. People can invest in many schemes, for example, HDFC Life Sanchay Plus – which not only has flexibility like providing a lump sum or a regular income, but also offers lifelong income option till the age of 99 years. This is a non-participating, non-linked, savings insurance plan that offers guaranteed returns whilst safeguarding your family’s future against the unforeseen events. This makes it a perfect choice for planning your contingency funds. 

Flawless financial planning helps you balance the equilibrium of your life when unexpected liabilities, life-stage expenses and unforeseen happenings may occur. 

Pay off your debt: One of the most important financial resolutions for any individual should be to be free from any debt. Owing to the ongoing recession, many individuals have faced job losses and salary cuts. This has made it extremely difficult to repay debts in due time. It is important to ensure that you calculate all expenses and pay off debts that could include credit card payment, bank overdraft and any other form of a loan.

Buy relevant insurance policies: In 2021, investors should try to look for attractive policies that guarantee them good returns in the long run. Besides medical policies, it is advisable to invest in savings insurance plans like the HDFC Life Sanchay Plus. This plan offers guaranteed returns and safeguards your family’s future from untoward incidents.  Rest assured of regular income and systematic savings that will help you in fulfilling dreams of all your loved ones!

Rebalance portfolio: Investors should aim to put money in the right investment schemes that can provide them monetary cushion during financial hardships. This is the best way to rebalance and diversify your portfolio, especially if any of your saving instruments are not giving expected returns.

Start a side hustle: Boosting your income not only grows your savings but also enables you to make a robust investment plan for your future. The best way to do this is to start a side hustle in your free time that can offer you extra income and become your cushion during difficult times. The money you earn from the side hustle can become a part of your savings and you can end up earning high interest rates on this amount.