What Does It Mean To Be Financially Smart In A Post-Covid World? Here Are Your Top 7 Hacks
The pandemic pushed the world into a severe recession, and the global economy was down to its knees. It is due to the worldwide impact of the virus that humans understood how fragile their economy is. Its severe impact could be felt across all industries that exist.
There was a huge loss in income, unprecedented damage to the economy, fall in the import/export, disruption in the manufacturing units, colossal plunge in the global stock markets in every country, etc.
So, how are you going to be financially more stable and secure yourself in this post-COVID world? To help you out, given below are the top seven hacks that you can follow.
Hacks That Will Make You Financially Smart
A lot of people will ask, what does it mean to be financially smart? Being financially smart means you are allocating your assets and cash in such places that will secure your future. You don’t have to worry about money even if there is a recession or a big economic crisis.
Maintain an Emergency Fund
One of the traits that differentiate a financially smart person from an ordinary person is their ability to think long-term. Every month, take a small amount of your income and save it for an emergency fund.
Fixed or Recurring Deposits are the best options for this fund. A risk-free investment that will help you to survive in times of economic crisis or whenever you need cash instantly.
It is ideal for putting 5% of your income into this emergency fund every month. You never know what kind of emergency you are going to be in. So, it is vital to maintain an emergency fund.
Invest in Mutual Funds
A great way to grow your money over time is by investing in mutual funds. For those not willing to take the risk to invest in stock markets directly, mutual funds seem to be the option. Mutual funds have been renowned for offering better average returns on the amount invested.
In the UK, people have received an average of 7.4% returns if they remained invested in the long term. You can invest in a range of mutual funds by applying for SIP or “Systematic Investment Plans”. Or you can opt for “One Time Investment” and wait for it to mature.
Revise Your Budget
The amount you are spending every month needs to be checked frequently. This will help you get a clear idea regarding the amount of money required to run your household. In the post-COVID world, we would suggest you revamp your budget and cut out all the unnecessary expenses from the list.
Instead, you can save that money and add it to the emergency fund or add it to the mutual fund investments. This will help you get a more precise and productive monthly budget always.
Avoid Taking Any Loans
Loans are one of the biggest reasons people fail to secure themselves financially. It is because the interest rates on loan can be very high, and you will spend a considerable part of your income on repaying that interest. That is why it is always recommended not to take any financial loans unless it is the last option.
If you decide to get a loan, make sure you have a good credit score. This helps you take out a loan at reduced interest rates and save a considerable amount of money over the next few years. You can reach out to trusted lenders like CreditSpring for better rates.
Stocks Can be an Option
One of the best ways to work for a passive income is by investing in the stock market. You might think that investing in the post-COVID world can be a tricky thing to do. But, you will never gain a big profit if you are not willing to take the risk.
There are so many kinds of stocks from where you can choose and build your portfolio. Do ample research, create a budget, and remain invested for the long term.
Always remember that the greater the fall is, the steeper the rise will be. So, don’t miss out on the chance to grow your wealth and financially secure your future.
Get Life Insurance
A lot of people are sceptical about life insurance policies these days. But there are still many life insurance schemes that can be beneficial for you and your family. The only trick here is that you have to find it carefully.
Find a good agency that has good management and a great track record of paying their clients. Invest your money in such agencies because they will surely give you very profitable schemes in the longer run.
Invest in Real Estate
Last but not least, you can invest in real estate to create another channel of passive income. Relying only on your salary is not going to help you in emergencies.
Physical assets like real estate can help your finances to grow over time. From a monthly rental, you have access to a steady income that will help you a lot.
When you have invested in a real estate asset, it will give you a sense of financial security because its value appreciates over time. It also helps to keep you away from the perils of inflation. Carry out extensive research and analysis before investing in any real estate.
Ensure that you are going to put your money in a place that will help your wealth grow and not bring it down. If you are going to take out a loan to purchase a real estate property, here is CreditSpring’s loan calculator that will help you to understand if you are eligible to take out a loan right now.
The Bottom Line
So, these are the top 7 hacks that will help you be financially smart in a post-COVID world. Make sure to follow them without fail and secure your future like never before.
Being financially smart and secure is always essential. Thus, these hacks will come to your aid not only after any pandemic but at any time.