Ever since Covid-19 hit, it changed our lifestyles, our thought process, our outlook, approach and indeed the whole scenario drastically across the globe. None of us had ever imagined the times that we are living in. The unprecedented Covid-19 crisis forced business persons and employers to temporarily close businesses, furlough workforces while being faced with escalating expenditures. This left them feeling dispirited and they questioned if they could continue their operations. Also, the employees had to bear the brunt of it by losing their jobs and subsequently a stable source of income.

Today, we are in a state of flux in every sense of the word. As a result, it has never been more important to actively seek out for alternate solutions for a secure future. Here are some mantras to overcome the financial crisis that we all are facing at an individual level.

Stop worrying, start thinking

When a financial crisis hits us, our minds get blocked and we start worrying instead of thinking about what we need to do to handle the crisis. We start panicking and getting anxious, “Oh, I lost my job, what will happen now? How will I pay the EMIs, what about my expenses, etc. etc.?” We need to stop thinking in a negative direction instead we should think about how we can overcome this crisis. Can we look at another source of income or any alternate ways and means to sustain ourselves? Panicking will only make matters worse whereas a thoughtful approach can lead to opening new avenues for us.

Financial calculations are a must

It is extremely important to start doing our calculations, with a calm and relaxed mind. Get your family members also involved in this process so that they can also come up with ideas and solutions. Also, figure out the savings which you are left with and how long you can sustain without any income. Having a monthly budget is essential to keep a check on unnecessary expenses. See if you can cut down on unnecessary expenses and reduce your financial burden to some extent. Think if you can do any extra activities to earn more income. If possible, instead of relying on one source, look for diversified income from multiple sources, if you have the ability and time. This will help you feel relaxed and under control.

Develop the habit of keeping reserve corpus

Instead of being attracted towards a lavish lifestyle, we should go back to the traditional approach of “Simple living, high thinking” and maintain a comfortable and dignified lifestyle without being extravagant. Also, “Idle hands make one poor, but diligent hands bring riches”. Consequently, we must make it a habit to save aside a portion of our monthly income as a reserve. After disbursing all the expenses and liabilities, we must use the remaining funds sagaciously during the entire month. It is imperative to save as much as you can during challenging times.

Opt for flourishing stocks and smart, beneficial financial investments

We have got multiple learnings from the financial crisis that has taken place post the pandemic. So, now is the ideal time to learn from our mistakes and invest in equities that have gained and thrived since the virus outbreak. The companies involved in manufacturing vaccines or medication for Covid-19 can be the best option, especially health and pharma sectors. Due to increased demand, the stock of firms producing medical accessories including PPE kits, masks, disinfectants and other personal safety and hygiene items has increased. Stocks of travel and tourism firms, hospitality and aviation sector, on the other hand, have crashed and people have suffered huge losses. So, make a prudent decision and invest in a stock that is more likely to give you better returns and financial growth during the pandemic. Also, investing in mutual funds, fixed deposits and other investment schemes will prepare you for all financial exigencies and risks in the future, so better to be safe than sorry.

Look back, learn & look forward

No one is your better mentor than you yourself and we can learn from our own mistakes. We must have faced roadblock and done blunders and are now aware of the things we would have done differently in retrospect, but the important thing is to keep the momentum going. Lamenting on the past will do no good, so learn from your past, think wisely and be prepared for the future. The key to success is not letting things happen the way they are happening, rather align all the positive forces together to make them happen the way you want them to happen.

The author is Associate Professor, Sushant University, Gurugram, Haryana

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.