Salt Away Shillings For Rainy Days

Outlook Money|May 2020

Salt Away Shillings For Rainy Days
Quick look at certain thumb rules to ensure financial readiness during emergency
Dipen Pradhan

Shradha Rastogi had been mulling to move to a new apartment at Lajpat Nagar in New Delhi when the government announced the lockdown 1.0. The 23-year-old professional was working from home as much of the country prioritizes social distancing amid the novel Coronavirus outbreak. But a week later the company sent an email asking her, along with 30 to 40 per cent of employees, to leave without pay for three months.

Shocked and panic-stricken, Rastogi is worried if she will get her job back as the company has not given any assurance till now. However, she had been saving close to 10 to 15 per cent of her salary – decent enough to sustain a living for a few months without a source of income.

Because the government announced the lockdown all of a sudden, like Rastogi many were unprepared. Millions of Indians are now facing financial strains, whether in the form of unexpected medical costs, losing a source of income, or seeing their savings plunge amid the outbreak.

Needless to say, the pandemic and its effects have started taking a toll on people’s mental wellbeing as well.

“When we look at it from a psychological point, I think the first response to the lockdown has certainly been of panic. While some are trying to figure out their personal finance, there is a longer-term which I am worried about are existential questions and concerns about the new normal that we will have to adjust to,” says Neha Kirpal, co-founder of a mental health platform, InnerHour.

“Especially for bread earners, an inability to provide for their family in a consistent way has created levels of psychological damage, and many have developed insomnia and eating disorders because of the anxiety,” she adds.

Maintaining personal finance in place will be an acid test as we face uncertainties induced by the Covid-19 pandemic. While the virus has had a profound impact on both investment and expenditure, it is the time to restructure the budgeting practice as we enter the new normal.

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May 2020