In this article, we will discuss money management and 5 positive habits related to money which got developed among us due to Covid. So, let’s start!
5 Positive Money Habits:
i) Improvement in Financial Literacy:
- Individuals like students, or even job workers got a lot of time where they utilized the time to know more about investing, financial markets, etc. which led to increasing financial literacy.
ii) Importance of Emergency Fund:
- The Covid-19 pandemic taught the individuals the importance of the Emergency Fund, as there were several cases where people lost their jobs, or there were situations one could not afford the things due to increased price and no/low savings.
- An individual should have an emergency fund equivalent to 12 months of expenses including EMIs and Rents.
iii) Importance of Asset Allocation:
- The Covid-19 pandemic taught people the lesson that one should not have all the eggs in one basket.
- During the Covid-19 pandemic, the stock market was on lows, while Gold and other safe-haven securities were on an upward trend, hence teaching the lesson that one should not only be invested in only security but should have an allocation to all the asset classes, as per their risk profile.
iv) Understanding of Bare Minimum Monthly Expenses:
- Due to lockdowns, work from home culture, less or no traveling, etc. an individual comes to know about the need and wants, and hence was able to understand his/her bare minimum monthly expenses.
v) Importance of Insurance:
- Insurance is a tool that helps individuals to cover their health expenses and life covered. The Covid-19 pandemic taught the individuals the importance of having insurance, especially term insurance and health insurance.
What Should Investors Do?
All the 5 positive money habits which an individual has learned during the Covid-19 pandemic should not be forgotten and should be remembered as it is one of the ways through which he/she can manage their financial health easily and could achieve the goals of financial freedom, wealth creation, or any other financial goals.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.