For the past few months, ‘volatility’ has become synonymous with life. From the raging COVID-19 to the falling stock markets, everything has become uncertain, unspecific, and uncertain. Challenging times, like the present, can cause huge financial distress. It forces us to think about how to protect our investments from the ups and downs in the economy. Such anxiety over money could cause you to abandon or second-guess your financial strategy. The rising expenses can cause you to stop the regular contributions to your savings plan.

But it is at times like these you should work your acumen and make logical decisions, instead of getting swayed by dread. This is the right period to advance further towards your goals and keep at it. 

 

A friend I recently spoke to stressed how effective her savings plan was during the pandemic. Her husband, who was employed with a private company, lost his job in an aftermath of the COVID-19 pandemic. What rescued her and helped pay for household expenses, take care of her children’s education, and fulfill all medical needs were the benefits she received from her savings plan. 

Her disciplined savings habits helped her build such a strong savings plan. She never missed out on her contributions and payments, no matter how tempting the situations were. This brought in benefits when the times were adverse and motivated her to maintain her practice of saving.

When I asked her how she managed to save even during the pandemic, she offered me some sincere advice:

Understand the difference between your needs and desires

The first thing she did to prepare for critical times was to segregate the family’s needs from wants. This exercise helped her cut down on unnecessary expenses. She could then save money from her salary. She mentioned how this was not too difficult because you need necessities to survive; wants can wait for another time. 

Stick to a budget

She also mentioned the importance of maintaining a budget. Creating a budget gives you precise insights into your income and expenses. It helps you streamline your expenses, thus ensuring your spending is aligned to your financial situation and long-term goals. 

To prepare a budget, you need to take stock of all your income sources. Then you should list down fixed expenses like rent, mortgage, insurance premiums, as well as variables like groceries, utilities, entertainment, travel, etc. Your budget should suffice for your long-term and short-term goals both. You could use the 50-30-20 rule, allocating 50% on needs, 30% on wants, and 20% towards savings.

If you fear overspending, make your savings automatic

One thing my friend swears by is the automatic savings feature. She opted for the automatic transfer of her salary into her savings plan. Even during the uncertain times, she continued to deal out a part of her earnings towards a high-yield savings instrument. 

So, irrespective of how small the sum, make sure you chip inconsistently from each paycheque. Make savings a habit, and it will reap benefits during the toughest times.

Keep your insurance policy active

What my friend highly emphasized was the need for insurance in difficult times. She made sure to continue her premium contributions. It gave her the much-needed peace of mind about a fall-back in case of an unfortunate event.  

She recounted the story of one of her colleagues, who stuck to her savings insurance plan even after her husband passed away. With the maturity benefit, she paid her daughter’s college admission fees. Her little girl now has a successful career and their financial woes are at an end, all thanks to keeping up her savings life insurance plan when the times were tough.

Whether it is insurance or general investment, never back down before you reach your goal. Pulling out your money from the savings scheme will derail your carefully laid out financial plan.

Keep yourself motivated

My friend also assures that tough times pass and eventually, you get on the road to recovery. So, keep yourself motivated irrespective of how turbulent times get. 

Celebrate small victories

No matter how tough times get, a disciplined approach towards savings and wise investments that offer guaranteed returns can help you withstand even the most turbulent times. The Aviva New Wealth Builder Life Insurance plan offers an option to combat such unprecedented situations in life by offering a sum assured of 11 times the annualized premium/ 1.25 times the single premium and a guaranteed payout at maturity on survival, promised at policy inception so you don’t have to be lost even when you wander. All you have to do is keep paying the due premiums to enjoy the offered guaranteed benefits.

Be wise. 

Make the smart decision to invest in this savings plan, and meet your life goals regardless of economic slowdowns with assured returns while ensuring that your life is adequately secured.

 

AN Nov 49/20

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