When the Indian government announced a strict lockdown in March in a bid to curb the spread of the coronavirus, majority of the population had little idea of the myriad ways in which their lives would be impacted in the coming months. Those who were blessed to be on higher pedestals of privilege found the lack of social interaction, recreation opportunities, the increased burden of household chores and a never-before experienced queasiness brought out by the overbearing climate of uncertainty to be the biggest challenges.

Circumstances were murkier for those whose income streams evaporated overnight by the lockdown. The economic impact was colossal and while the lockdown life has ended and manufacturing activities and businesses have restarted, a large chunk of the population is still dealing with the aftershocks. Irrespective of what one’s economic standing is, the crisis redefined the rules of money management for all and sundry. Given that a full economic recovery may take a while, here are a few ways in which you can keep your money safe while the clouds of recession fade away completely.

Trimming unnecessary expenses

Many of us could save a lot of money what with vacations, eating out, shopping and such activities becoming impossible last year due to the pandemic. But now what with normalcy albeit a new one, having resumed, it isn’t a great idea to loosen the strings of your purse, especially if your income was affected. Sonali Chatterjee (name changed) narrates how her experiences in the last couple of months have led her to embrace a more mindful attitude towards money. “I quit my job just before the pandemic had hit because I was so frustrated with it and I thought I would take a break for a few months and look for a job simultaneously. What ensued was an absolute nightmare – I could not be employed till almost the end of the year because of the economic downturn. Although I had a modest financial buffer, the uncertainty as to when I would have an income again made me very conscious of the way I spent money. It inculcated a renewed sense of discipline which I intend to not let go of even though I have a very well-paying job now.”

Tapping into the power of budgeting

One of the most important aspects of securing your wealth during an economic slump is to track the whereabouts of your money. Many of us become complacent with our budgets thinking we have a fair idea of how much goes out of our pocket in a given month but tough times call for tough measures. Those extra takeaway orders because you had a discount coupon or that snazzy pair of sneakers that you ordered during sale bonanza on your favorite shopping website can drain your coffers significantly without you realizing it. Payal Modi (name changed), an entrepreneur based in Ranchi reminisces how the thought of not being able to pay her employees drove her to maintain an extremely stringent. “I run a clothing label and obviously my business was dealt a severe blow because of the lockdown. After all, buying clothes isn’t a priority when financial constraints become severe. While the situation has improved, it is definitely not what it used to be pre-COVID. Knowing that I have people depending on me for their livelihoods has made me extremely cautious with my personal as well as my firm’s budget.”

Distancing with debt

There cannot be a more anxiety-inducing nightmare than being stripped of income with a mountain of debts to pay. The previous year did make that nightmare come alive for many people. Arjun Chhabra, a practicing chartered accountant based in Ranchi opines that many people only come to realise that debt can be two-edged sword during tribulations. “It has become extremely easy to avail debt these days and people these days tend to get sucked into the delusion that you can always service your debts tomorrow but it is important to keep in mind that when the tide turns a high level of debt can make it more tricky to tackle the situation. It has a trickle-down effect on all aspect of your finances – it is very common for defaulters to have to empty their savings and investments to clear debts and when the economic scenario isn’t promising, debt can become a quicksand. Any loan or any form of debt should be availed only if it is absolutely necessary and after a careful analysis until the economic situation improves and people’s incomes start going up.”

Savings and investments

The economic downslide triggered by the pandemic obviously sent the markets into a tailspin drastically affecting saving investment patterns. Investment decisions for many are now tinged with a darker shade of cautiousness and people are also waking up to the importance of having a solid body of savings and liquid funds. Modi says, “Yes, the proverbial silver lining has arrived in the form of a vaccine but I am going to continue exercising wariness when it comes to money management at least for the next couple of months. I am avoiding very high risk investments, amping up insurance and also striving to strengthen my contingency fund because my income isn’t going to balloon anytime soon.”

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