Financial Crisis : 7 Tips to Make Money & protect yourself

Protect yourself during the Financial Crisis

Within a very few weeks, the market has become very tense and the financial crisis is looming. Several factors, like the sudden spreading of disease all over the globe or the unknown disruption in the banking sector, has caused Global downtrend.

Recently, operations in a well known bank have been suspended by the Central Bank of India. This action has left all the investors puzzled, and it is for the second time in last six months that the banking sector has again come under public attention. Due to this, many investors have witnessed a hit and don’t want to take the risk anymore. Any person who is going through the same situation must keep certain things in their mind.

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How to prepare for Financial Crisis?

1. Depend on News taken from a Sound Source

The information which is received doesn’t always have to be relevant. Before relying on any information, the person must patiently conduct thorough research.

Sometimes, upon on seeing a piece of news flashing over all the news channel or hitting a newspaper headline, we panic. As a result, we begin commenting our perception over social media platform. Due to this information anxiety is created and a gap between what we think and what we understand goes on increasing. So, it is imperative to go through the news before concluding the updates.

2. Keep a check on Withdrawal of Money

In case your bank goes out of money, then the Government regulates the situation and try to maintain the interest of the depositor. You should keep a check on your withdrawal and structure it correctly. There are many limitations to the departures of money from any bank. In case there is a medical emergency, the concerned person can withdraw more money from the bank in comparison to the limit set by the banking regulator.

Further, in case of higher education, the person can withdraw more than the limit set by the banks. Also, the limit is not applied if necessary expenses are to be paid like those of the marriages or any unavoidable emergency.

3. Shape your loans, Insurance Payments and SIPs

In case you have taken a housing loan or a car loan from the bank which has bust then you should stay in touch with the lender. You must try to find a way so that your EMIs are not hampered in any situation. If any such unavoidable circumstances arise, one should inform the manager about it. Debt can then be rescheduled, restructured till you once again arrive to a point where loan can be repaid easily.

If you have a SIP investment or insurance premium, then you can talk to the insurance company about it and give them details of another bank. Updating them with the bank details of another bank will keep the investments safe and structured, and you will also not have to worry about other pending liabilities.

4. Don’t Panic

Don’t worry if your bank is suspended as it creates a situation of panic and leads to the volatility of the market. Also worrying won’t help us or solve our problem. Although there is a limit to the withdrawal of money by Central Bank of India, still your money is safe and won’t go anywhere. The person needs to stay calm and think of further things considering this money to be parked somewhere for a while.

You need to have stability in thinking and be prepared for such unseen circumstances as they can occur at any point in time. There is no reason or point of panic and always remember to diversify your portfolio.

How do you Survive an Economic Collapse/Financial Crisis?

With the occurrence of COVID-19, the market has experienced a sudden downfall. People have loosed their money into equities with the end of the fiscal year it is time to safeguard your money.

5. Allocation of assets

For short-term

We never thought or expected that a situation would come due to which the market will fall to such an extend. If you are scared due to short term volatility of the market, then you can invest in the bond which can help in achieving the financial goals and objectives. Also, for the next 12- 16 months, you should invest more in debts rather than equity. So you must consult your financial advisors to make a proper allocation of assets

For long-term

If you have already invested in the stock market, then don’t react to the volatility of the market. The market grows with economic development, but currently, there is an ultimate downfall. So we have no choice except staying without reacting.

6. Reduce the Luxuries

The money that was supposed to be used for vacation or any other event can be used more productively. Without wasting the money on unnecessary comforts, keeping in readily available shall suffice for a lot of needs arising for self and family.

7. Visit your Health Insurance 

You must make sure that your health insurance must cover pandemic disease, and by revisiting our health insurance, we can have a better understanding of the insurance policy.  

Cautions, remedies can go on and on, when it comes to personal finance. In this article, we have attempted to cover the primary concerns regarding livelihood, protection and luxuries. So you must keep these things in mind while safeguarding your money or protecting yourself from the financial crisis.

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