6 Financial Lessons COVID-19 Taught Us

1.Financial Literacy

It is one the most important subject to be learnt as soon as we get a basic understanding of money.Financial Literacy is important to be able to make budget,manage debts,track your expenses.Financial illeteracy can put you in inescapable visious cycle of debt.

2.Budgeting

Budgeting is one of the healthiest financial practices that can help control your spending, identify between good and bad spending, increase your savings, plan for your debt payments, and bring about good money habits. Budgeting also adds as an additional benefit to help you sail through the rough seas of uncertainty.

3.Do not over-borrow

Never ever borrow too much either from your friend and from any banks, see sometime borrowing does help but most of the times you will get trapped into it's deadly cycle, if you don't have a proper repayment plan.

Avoid using credit card very often since interest rates and penalty are very high, use it only when it is needed and before spending have a properly calculated repayment plan.

4. Health is Wealth

This COVID-19 peroid has taught us really well the importance of health and having a health insurance with the advancement of medical treatments, the cost is quite expensive, and covering up the medical bills is often tough and can lead to a huge hole in our pockets. Health insurance helps cover up the expenses for your family and yourself without hurting your savings, emergency funds and protects from inflation rates. It is also better to have your own health insurance even if your employer provides one, as it will be of no use incase you are a job loss.

5. Emergency Fund

Always keep atleast 3 months of your monthly expenses in your savings acccount.You never know what situation may come inront of you anytime so to be prepared to face the uncertainities, you should keep atleast 3 month of expenses. If your monthly expense is Rs 10000 you should have Rs 30000 in your savings account but you should be diciplined with spending your money, it should not happen like you went for shopping and spent the Rs 30000 that was allocated for emergency fund for you monthly expenses. 

6. Diversify your Investments

Diversify your investment portfolio across different asset classes to mitigate the risk of losing capital.We all have seen big crash and high volatility in the stock market due to COVID-19 whereas at the same time investment in gold is fetching good returns.Thus, it is always said to have a diversified portfolio instead of a very concentrated sector portfolio unless you are pretty sure about that sector. If you want to know more about portfolio diversification you can check out this link here.

With this I have come to an end of the blog, hope you have enjoyed it till then keep investing and I will come with a new blog soon.