The coronavirus has taken its toll on society - both on the health of the common man and disruption of economic activity. And those working as consultants/in the gig economy along with small businesses/non-essential shops have been hit. In this rather difficult situation, a key question that pops up repeatedly - how does one plan finances during the crisis and the aftermath to meet both the short-term and long-term financial goals of a family?
The immediate requirement for middle class families in the short term is to draw up a budget - on one side, they need to take into account all their income streams - it could be salaries, gig income/consultancy income, rent from flat, government pension, interest from fixed deposits or government bonds, and dividends from companies etc. On the other side of the budget, they need to include their monthly expenses which typically includes groceries, school fees, rent or EMI for flat, mobile and electricity bills, costs related to running 2-and 4-wheelers, and medical expenses amongst others.
In the current scenario, most families across the country are grappling with a sudden loss of income which could be in the form of reduced/considerably curtailed salary/gig income/consultancy income. Also, for those families which rely on monthly rental income, they may experience hiccups, with tenants finding it difficult to pay rent during this pandemic.
As a result, an immediate financial planning requirement for most middle class families would be to review and curtail unnecessary/avoidable expenditure. For instance, in middle class families, one does find two or three cable TV connections in a home, and if practical, it could be reduced to just one. The above measure could result in savings of Rs 700 -1,000 per month. Source
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